Ban the dollar store? Local communities halt new discount shops

Recently, Stonecrest passed a ban on future “small box discount stores,” outlawing businesses less than 12,000 square feet that sell most of their goods for $5 or less. Experts and leaders said this is believed to be the first time a metro Atlanta government has taken this step against dollar stores.

At one intersection in suburban DeKalb County, it takes less than five minutes to walk from the Dollar General to a Family Dollar. Walk another few minutes across Covington Highway, and you’ll hit a Dollar Tree.

That intersection in the Stonecrest area, where three dollar stores exist in a half-mile radius, is a symbol for what some local officials view as a growing problem with the discount stores.

“You can stand in Family Dollar and look across the street and see a dollar store,” said DeKalb Commissioner Lorraine Cochran-Johnson. “We don’t need them on every corner.”

Local governments are beginning to take action. Late last month, the city of Stonecrest passed a total ban on future “small box discount stores,” outlawing businesses less than 12,000 square feet that sell most of their goods for $5 or less. Experts and leaders said this is believed to be the first time a metro Atlanta government has taken this step against dollar stores.

Tuesday, DeKalb County passed a 45-day moratorium on new dollar stores in the unincorporated parts of the county. Commissioners want to study the issue before possibly passing long-term regulations next year.

A customer leaves the Family Dollar at the intersection of Covington Highway and DeKalb Medical Parkway. Curtis Compton/ccompton@ajc.com

The restrictions in metro Atlanta accompany new laws in several cities around the U.S., where leaders are also grappling with the spread of the discount stores, which has accelerated over the last decade.

“You’ve seen your last dollar store in Stonecrest,” Mayor Jason Lary said. The proposal to ban the stores sprouted from concerns from residents that the businesses do not provide enough fresh food options and give off a bad image, he said. Dollar stores sell discount goods, packaged foods and limited cold or frozen groceries.

Critics like Cochran-Johnson said the stores contribute to food insecurity in “food deserts” where residents have limited access to grocery stores that sell fresh food. Some officials and residents worry dollar stores could discourage larger grocery stores from opening nearby. But it remains to be seen whether halting the growth of dollar stores is the right solution to attract supermarkets to neighborhoods and invigorate local economies.

Stonecrest, DeKalb County’s largest city, has about 54,000 residents served by nearly a dozen dollar stores. As for grocery stores, the city has a Publix, Food Depot and two Walmarts, which sell groceries.

Across the entire county, there are 70 dollar stores, according to Cochran-Johnson’s office.

Dollar General said it creates new jobs and helps the local economy. Curtis Compton/ccompton@ajc.com

Credit: Curtis Compton

Credit: Curtis Compton

A report from the county's planning department earlier this year, obtained by The Atlanta Journal-Constitution, found that dollar stores "have a disproportionate impact" on African-American communities. Research from the Institute for Local Self-Reliance identified a nationwide trend of dollar stores concentrating in lower-income, predominantly black communities. Stonecrest is more than 90% black and is largely middle class, with a median household income of $46,000.

“It’s the image that it portrays for a place. … We’re trying to send a signal that we’re a quality town,” said Lary, who has pushed for an upscale grocery store like Whole Foods or Sprouts to open in Stonecrest, which became a city in 2017.

The issue is quickly becoming a national one. Cities across the country — including Birmingham, Alabama, Fort Worth, Texas and Oklahoma City — have passed legislation this year that regulates the industry, prohibiting the opening of a new dollar store within a certain distance of an existing one. None of the regulations has been challenged in court.

A spokeswoman for Dollar General called the ordinances in Stonecrest and other cities “restrictive” and disappointing.

“I think our customers who may be forced to travel further or spend more money on everyday needs are the ones that are more (directly) affected by this,” the spokeswoman, Crystal Ghassemi, said, adding that the company creates jobs and is adding some fresh produce into more of its stores.

Dollar Tree, which acquired Family Dollar in 2015, said in a statement to the AJC that it “understand(s) deeply the concerns of many local officials regarding the changing nature of our shared communities,” and said the stores help local economies.

A customer leaves the Family Dollar at the intersection of Covington Highway and Dekalb Medical Parkway. Curtis Compton/ccompton@ajc.com

Officials with Dollar Tree and Family Dollar did not specifically respond to inquiries from the AJC about the concerns local officials have about proliferation and food security.

Dollar stores have boomed in American communities over the last decade, according to Jerry Shannon, a University of Georgia professor who has researched food deserts and the spread of dollar stores. Since 2011, Dollar General, Dollar Tree and Family Dollar have grown from 20,000 stores to nearly 30,000 in 2018, with thousands of future store openings planned, according to the Institute for Local Self-Reliance.

“They’re seen as being really detrimental both in terms of economic development, and the types of goods they can offer the community,” Shannon said, adding that a negative stigma often accompanies them.

But researchers still don’t have all the answers for how, or whether, to combat dollar stores.

“This growth has been so recent,” Shannon said, that experts are “still feeling our way through the dark.”

The 45-day moratorium in DeKalb will give leaders time to research and draft regulations for dollar stores, Cochran-Johnson said. The commissioner clarified she is not opposed to dollar stores, and often shops at them.

“I am against the proliferation of dollar stores in communities and particularly under-served communities,” she said. “In south and unincorporated DeKalb, it’s like, one day it’s a vacant lot, the next day it’s a dollar store.”

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