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As more dollar stores open, advocates warn of the harm they can do to communities

SACHA PFEIFFER, HOST:

If you're in the United States, there's a good chance you're no more than a few miles away from a dollar store. The three major dollar brands have more U.S. stores than Starbucks, Walmart and McDonald's combined. Stephan Bisaha of the Gulf States Newsroom explains the takeover by dollar chains and their future ambitions.

STEPHAN BISAHA, BYLINE: If you had a dollar for every time a Dollar General opened up, you'd get three bucks every day - impressive, especially considering other big retailers are closing stores. But just as impressive is where they open - not just big cities, but rural areas where those other retailers don't go - places like April Russell's hometown of York, Ala.

APRIL RUSSELL: Well, to me, dollar stores are the bread-and-butter of small towns because we don't have Walmart here. So everything you need is at the dollar stores here. So - which, actually, I'm going to one in a minute, so...

BISAHA: York's in Alabama's Black Belt, an area known for rich soil and high poverty. And like a lot of small rural towns, York doesn't have a grocery store. It's just hard to make a buck in a place where there are so few customers.

RUSSELL: The grocery store lasted maybe four months and - but we still had the dollar stores here.

BISAHA: Notice she said dollar stores. York's a town of 2,400 people, with no grocer, but two different dollar stores - Dollar General and Family Dollar. And that's possible because of the core idea that makes a dollar store a dollar store - cheap, even if prices aren't exactly a dollar.

RUSSELL: Sometimes the grocery stores are too expensive. Dollar store - you can find the same items, but it's cheaper.

BISAHA: Of course, a big factor in the dollar stores spreading like kudzu is not just cheap prices, but cheap everything - like low-cost buildings, hiring few workers and selling little to no fresh produce. But that doesn't fully explain why you often see dollar stores across the street from each other. Well, part of that comes down to Dollar General being the invading force in a dollar store war.

KAREN SHORT: Absolutely, Dollar General is going for the attack on Family Dollar.

BISAHA: Karen Short tracks dollar stores for Credit Suisse. Analysts say Dollar General has a strategy and the cash to aggressively push in on Family Dollar's turf.

SHORT: They don't have a problem opening up a better, newer store.

BISAHA: And we're nowhere near peak dollar stores, at least if you believe Dollar General CEO, Jeff Owen, during their December earnings call.

(SOUNDBITE OF ARCHIVED RECORDING)

JEFF OWEN: You know, in the U.S. alone, we have 16,000 additional opportunities, and we feel great about our ability to capture those.

BISAHA: That's 16,000 more stores. Add that to expansion plans from Dollar Tree, and we're talking about possibly doubling the number of dollar stores in the U.S. - enough to make a CEO giddy.

(SOUNDBITE OF ARCHIVED RECORDING)

OWEN: Stepping back, you can probably hear in my excitement about the real estate and our ability to continue to grow here.

BISAHA: But the dollar store enthusiasm has been running into a growing dollar store backlash.

LIZ REEVES: Why do we need another one when we're already surrounded?

BISAHA: Liz Reeves lives in Culleoka, Tenn. It's a small town about an hour south of Nashville, surrounded by dollar stores, including one just four miles from Reeves' house.

REEVES: We were ecstatic when it was there - weren't happy that it ran the little store down there out of business.

BISAHA: And that's the source behind a lot of the dollar store opposition - fears their low-cost model makes it harder for local retailers to compete. In 2021, Reeves worried plans to open a Dollar General in Culleoka would eventually shut down the town's one small market.

REEVES: I'm mad at them. I really am. You don't come in and try to overtake where somebody lives because you want to make a dollar.

BISAHA: Reeves and her neighbors convinced the county to vote against allowing the Dollar General to open. Other communities have gone even further, with about 50 across the country putting limits on new dollar stores, saying they already have too many. For NPR News, I'm Stephan Bisaha in Birmingham.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.