The rise of dollar stores and the questions that should follow

In recent years dollar stores have had a lot of growth:

Surveys have shown that today’s shoppers are more likely to make purchases in dollar stores lately, and chains such as Dollar Tree, Dollar General, and Family Dollar have experienced outstanding sales growth as a result…

Now, according to a study by retail research firm Colliers International, dollar store locations outnumber drugstore locations in the U.S. Specifically, Colliers added up the number of locations for four national dollar store chains (Dollar General, Dollar Tree, Family Dollar, 99 Cents Only), and compared that figure to the total number of locations for the country’s three biggest drugstore chains (CVS, Rite Aid, Walgreens).

The tally, as of mid-2001, stood at 21,500 dollar stores vs. 19,700 drugstores…

Also, the dollar store chains have all experienced remarkably strong sales in recent years, and have been expanding like crazy as a result. Dollar General, for example, has nearly doubled its location total over the past decade, 5,000 to more than 9,500 stores today. And counting.

I’ve wondered recently why Walmart gets a lot of attention while drug stores, particularly Walgreens in this area, and dollar stores have been expanding. Whenever I walk into a Walgreens, I can’t help but think they are mini-Walmarts. Walgreens sells everything from prescriptions to ice cream to photos to cosmetics and so on. Dollar stores are similar but cheaper, selling everything from food to detergent to household supplies.

After noting the growth in dollar stores, we could ask some questions about the effects these stores have. Clearly, they offer cheap goods. But: Are dollar stores good for the local economy? Do they provide good jobs? Do they tend to be found in areas of sprawl or strip malls and are dependent on automobile traffic? Are the goods primarily made in the US or overseas? Is the food for sale healthy? Perhaps these questions aren’t asked since it is assume dollar stores will recede in popularity when the economy improves. But since this likely won’t be for a while, shouldn’t we think about what it means to have a lot of dollar stores?

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