by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
Communities like Oklahoma City, Tulsa, Fort Worth, Birmingham, and Georgia’s DeKalb County have passed restrictions on dollar stores, prompting numerous other communities to consider similar curbs. New laws and zoning regulations limit how many of these stores can open, and some require those already in place to sell fresh food. Behind the sudden disdain for these retailers—typically discount variety stores smaller than 10,000 square feet—are claims by advocacy groups that they saturate poor neighborhoods with cheap, over-processed food, undercutting other retailers and lowering the quality of offerings in poorer communities. An analyst for the Center for Science in the Public Interest, for instance, argues that, “When you have so many dollar stores in one neighborhood, there’s no incentive for a full-service grocery store to come in.” Other critics, like the Institute for Local Self-Reliance, go further, contending that dollar stores, led by the giant Dollar Tree and Dollar General chains, sustain poverty by making neighborhoods seem run-down. “It’s a recipe for locking in poverty rather than reducing it,” an institute representative told the Washington Post early this year.
Such claims are like salty potato chips for reporters starved for a good angle on how big businesses exploit the poor. A Washington Post headline described how these stores “storm” into cities. A banner in Fast Company declared, “Why dollar stores are bad business for the neighborhoods they open in.” AnAtlanta Journal-Constitution article on the stores highlighted a quote from a local official: “We don’t need them on every corner.” …
Recent research undermines the argument that a lack of fresh, healthy food is to blame for unhealthy diets. In a paper published in the Quarterly Journal of Economics, three economists chart grocery purchases in 10,000 households located in former food deserts, where new supermarkets have since opened. They found that people didn’t buy healthier food when they started shopping at a new local supermarket. “We can statistically conclude that the effect on healthy eating from opening new supermarkets was negligible at best,” they wrote. In other words, the food-desert narrative—which suggests that better food choices motivate people to eat better—is fundamentally incorrect. “In the modern economy, stores have become amazingly good at selling us exactly the kinds of things we want to buy,” the researchers write. In other words, “lower demand for healthy food is what causes the lack of supply.”