2019-07-19cnn.com

As dollar stores sweep across America, they are facing growing scrutiny from opponents who argue that discount chains stifle local competition and limit poor communities' access to healthy food.

Dollar stores have never been more popular. Yet a wave of cities and towns have passed laws curbing the expansion of Dollar General (DG) and Dollar Tree (DLTR), which bought Family Dollar in 2015. The companies are the two largest dollar store operators in the country, combining for more than 30,000 stores throughout the United States, up from under 20,000 a decade ago. By comparison, Walmart (WMT), America's largest retailer, has 4,700 US stores.

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"The business model for these stores is built on saturation," said Julia McCarthy, senior policy associate at the nonprofit Center for Science in the Public Interest and a critic of dollar stores. "When you have so many dollar stores in one neighborhood, there's no incentive for a full-service grocery store to come in."

Opponents also express concerns that dollar stores don't offer fresh produce. Dollar General and its dollar store rivals mostly sell snacks, drinks, canned foods and vegetables, household supplies and personal care products at rock-bottom prices.

However, Dollar General and Dollar Tree argue that they benefit communities by offering shoppers convenient places to grab food and essentials at low prices.

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Last week, the city council in Birmingham, Alabama, unanimously approved legislation that would prohibit new dollar stores from opening within a mile of their existing locations. "While dollar stores proliferated across our community, healthy food options dried up," Birmingham Mayor Randall Woodfin told CNN Business. The new measure will help Birmingham attract and retain grocers in the city's food deserts, he said.

Oklahoma City, Tulsa, Oklahoma, and Mesquite, Texas, have also passed legislation limiting new dollar store openings. And officials in New Orleans, Cleveland and Fort Worth, Texas, are exploring plans to restrict dollar stores in their cities.



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