Dollar stores target the permanent underclass

Stores like Dollar General, Dollar Tree, and Family Dollar are expanding rapidly because the permanent underclass is growing and few can escape it. That means they can’t trade-up to better stores and must do most their shopping at dollar stores.

This can be problematic because when dollar stores open a branch in a low income, usually rural area, they can put local grocery stores out of business. They generally have fewer employees than a local grocery. Selection is much less too. They usually don’t have meat or fresh fruit and vegetables, so people tend to stock up on grains, bread, snacks, which aren’t particularly healthy.

However, in stark capitalist terms, dollar stores fill a need. People wouldn’t shop at them if they weren’t broke. Prices are low, so they do save money. Macro economic forces that create the underclass are not the fault of dollar stores. They just exploit them, which is what capitalism is about.

Parowan UT is about 3,500 people. It has had a sole locally-owned grocery store for years. A Dollar General opened a couple of years ago. It is busy, and open later than the local store, plus it is open on Sundays. The nearest big stores are in Cedar City 18 miles away. 

Cedar City has a Walmart. Yes, I know many love to hate Walmart however, without it, shopping would be much harder in Cedar and in surrounding areas. People drive from miles away to shop there. It employs probably hundreds. Prices, of course, are low. Cedar also has two chain grocery stores which are thriving.

So, a Dollar General or Walmart can indeed be bad news for local businesses, but aren’t always. They do serve a need.

The real question to ask is, why is the permanent underclass growing and what can we do to help them?

“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America,” Garrick Brown, director for retail research at the commercial real estate company Cushman & Wakefield, told Bloomberg in 2017. Executives realize that their business depends on customers essentially falling short of the American middle class. “The economy is continuing to create more of our core customer,” Dollar General CEO Todd Vasos told The Wall Street Journal.