Local grocery stores and pharmacies struggle to compete with dollar stores but rural residents view the chain stores positively. (Ohio Capital Journal photo by Graham Stokes)
The influx of dollar stores into the rural landscape can have a devastating effect on grocery stores and other small businesses in rural areas, research has found.
When dollar stores move into a rural area, independent grocery stores are more likely to close, says a new study released by the U.S. Department of Agriculture (USDA). Employment and sales fall at grocery stores wherever a dollar store is located, the researchers found, but in rural areas the effects are more profound.
“They’re going after the low hanging fruit… when it comes to being able to capture consumer sales,” Kennedy Smith, senior researcher with the Institute for Local Self-Reliance (ILSR), said in an interview with The Daily Yonder. “These are the communities that tend to be too small for a Walmart to have been there, but small enough that if there was a major grocery store chain there at some point, it’s probably gone now. They see an opportunity.”