Earlier this week, we saw how Fred's ($FRED) was having its Southern barbeque lunch by the dollar store industry, namely Dollar General ($DG) and Dollar Tree ($DLTR), both of which rapidly expanded their respective retail portfolios in the 21st century.
City councils are concerned, and they've have passed legislation — or plan to pass legislation — that would theoretically stifle the rapid expansion of dollar stores in the hopes of protecting local businesses.
One of the major city's mentioned in a CNN feature on the rise of dollar stores is Birmingham, Alabama, which passsed an amendment to "reduce the number of dollar stores opening in food deserts" in the area. Below is what the Dollar Tree and Dollar General footprint looks today, as well as over time through the Timeline tool.
According to the city's press release, Alabama has the fifth-highest concentration of dollar stores per capita, and the city believes that this amount of saturation by these businesses is driving away grocers.
In our database, there are 44 combined retail locations between Dollar General, Dollar Tree, and its subsidiary Family Dollar. These stores are all concentrated in a way that there is not a single store that's more than five miles away from a competing or sister store. In fact, the majority of them —27 out of 44 — would technically violate the city's one mile distance minimum amendment if they were a new store today, as there is another dollar store within a mile from these locations.
Two other cities — Cleveland, Ohio and Fort Worth, Texas — are considering similar proposals that would limit future dollar store openings. Both cities have a similar profile to Birmingham when it comes to their dollar store frequency, in that they both have a ton of them within city limits.
Not only that, these dollar stores spill outside of what the companies themselves consider Cleveland and Fort Worth.
Could political action stop the expansion of these dollar stores? Perhaps, although that could have an impact on these two company's clientele: low and middle income Americans who are just trying to save some money on groceries, household items, or tchotchkes.
