Rapidly expanding Dollar General empire has a complicated impact on rural America - Entrepreneur Generations

Chet Davis in the produce section of Chet's Foods
(NPR photo by Frank Morris)

Discount chain Dollar General is expanding in rural areas all over the country, but rural residents have complicated feelings about its impact. Dollar General started out in rural Kentucky, and now has more than 14,000 locations in the U.S (about as many as McDonald's) and it's opening about 1,285 more stores every year. There are Dollar Generals in urban and suburban areas, but its expansion strategy is to put stores in rural areas that can't support a big box store and offer reasonably-priced items rural residents might not otherwise have quick access to, Frank Morris reports for NPR. 

"They serve a part of the country that Walmart doesn't serve directly," Institute for Rural Journalism and Community Issues Director Al Cross told Morris. "You have to maybe drive 20 miles to get to a Walmart. You might only have to drive 5 miles to get to a Dollar General."

But Dollar General, along with its competitors Dollar Tree and Family Dollar are putting the squeeze on rural mom and pop grocery stores. That's true even in Moville, Iowa, a town of 1,600 where the residents fought hard to keep a local grocery. After the town's last grocery burned down in 2008, residents pooled their money to rebuild and asked local grocery chain owner Chet Davis to step in and operate the new store. But Davis says Chet's Foods lost a third of his sales after Dollar General came to town, and he might not be able to stay open.

Davis is trying hard to keep the store afloat. He "negotiated a rent reduction earlier this year with the community development group that townspeople funded to reopen a store. The group leases the space to him," Barbara Soderlin reports for the Omaha World-Herald. And Davis opened a dollar section at his store and cut employee hours, but now he says he's asking for a second rent reduction and says he'll have to make a decision about closing in early 2018.

Though the Moville Dollar General might sink Chet's Foods because of convenience items, Chet's offers things Dollar General doesn't have, such as fresh meat, dairy and produce. If Chet's closes, the closest grocery store is 20 miles west in Sioux City.

Small town leaders have mixed feelings about Dollar General; some worry that it could hurt local business, but are also tempted by the increased sales tax revenue. The typical Dollar General store generates about $1.6 million in sales a year, Soderlin reports, but the biggest part of its sales comes from food, which is tax-exempt in most states. And locally owned grocery stores circulate more revenue back into the community than a dollar store, as well as bumping up local home values.

from The Rural Blog http://ift.tt/2ChMpfQ Rapidly expanding Dollar General empire has a complicated impact on rural America - Entrepreneur Generations

Posted by Entrepreneur Generations

Tweet