- Rural towns and poor urban neighborhoods are being devoured by dollar stores: Walmart's jackals, picking over the remains.
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Rural towns and poor urban neighborhoods are being devoured by dollar stores (permalink)
Across America, rural communities and big cities alike are passing ordinances limiting the expansion of dollar stores, which use a mix of illegal predatory tactics, labor abuse, and monopoly consolidation to destroy the few community grocery stores that survived the Walmart plague and turn poor places into food deserts.
"The Dollar Store Invasion," is a new Institute For Local Self Reliance (ILSR) report by Stacy Mitchell, Kennedy Smith and Susan Holmberg. It paints a detailed, infuriating portrait of the dollar store playbook, and sets out a roadmap of tactics that work and have been proven in dozens of places, rural and urban:
The impact of dollar stores is plainly stated in the introduction: "dollar stores drive grocery stores and other retailers out of business, leave more people without access to fresh food, extract wealth from local economies, sow crime and violence, and further erode the prospects of the communities they target."
This new report builds on ILSR's longstanding and excellent case-studies, augmenting them with the work of academic geographers who are just starting to literally map out the dollar store playbook, identifying the way that a dollar stores will target, say, the last grocery store in a Black neighborhood and literally surround it, like hyenas cornering weakened prey. This tactic is repeated whenever a new grocer opens in the neighborhood: dollar stores "carpet bomb" the surrounding blocks, ensuring that the new store closes as quickly as it opens.
One important observation is the relationship between these precarious neighborhood grocers and Walmart and its other big-box competitors. Deregulation allowed Walmart to ring cities with giant stores that relied on "predatory buying" (wholesale terms that allowed Walmart to sell goods more cheaply than its competitors bought them, and also rendered its suppliers brittle and sickly, and forced down the wages of those suppliers' workers). This was the high cost of low prices: neighborhoods lost their local grocers, and community dollars ceased to circulate in the community, flowing to Walmart and its billionaire owners, who spent it on union busting and political campaigns for far-right causes, including the defunding of public schools.
This is the landscape where the dollar stores took root: a nation already sickened by an apex predator, which left a productive niche for jackals to pick off the weakened survivors. Wall Street loved the look of this: the Private equity giant KKR took over Dollar General in 2007 and went on an acquisition and expansion bonanza. Even after KKR formally divested itself of Dollar General, the company's hit-man Michael M Calbert stayed on the board, rising to chairman.
The dollar store market is a duopoly. Dollar General's rival is Dollar Tree, another gelatinous cube of a company that grew by absorbing many of its competitors, using Wall Street's money. These acquisitions are now notorious for the weaknesses they exposed in antitrust practice. For example, when Dollar Tree bought Family Dollar, growing to 14,000 stores, the FTC waved the merger through on condition that the new business sell off 330 of them. These ineffectual and pointless merger conditions are emblematic of the inadequacy of antitrust as it was practiced from the Reagan administration until the sea-change under Biden, and Dollar Tree/Family Dollar is the poster child for more muscular enforcement.
The duopoly has only grown since then. Today, Dollar General and Dollar Tree have more than 34,000 US outlets – more than Starbucks, #Walmart, McDonalds and Target – combined.
Destroying a community's grocery store rips out its heart. Neighborhoods without decent access to groceries impose a tax on their already-struggling residents, forcing them to spend hours traveling to more affluent places, or living off the highly processed, deceptively priced (more on this later) goods for sale on the dollar store shelves.
Take Cleveland, once served by a small family chain called Dave's Market that had served its communities since the 1920s. Dave's store in the Collinwood neighborhood was targeted by Family Dollar and Dollar General, which opened seven stores within two miles of the Dave's outlet. The dollar stores targeted the only profitable part of Dave's business – the packaged goods (fresh produce is a money-loser, subsidized by packaged goods).
The dollar stores used a mix of predatory buying and "cheater sizes" (packaged goods that are 10-20% smaller than those sold in regular outlets, which are not available to other retailers) to sell goods at prices that Dave's couldn't match, driving Dave's out of business.
Typical dollar stores stock no fresh produce or meat. If your only grocer is a dollar store, your only groceries are highly processed, packaged foods, often sold in deceptive single-serving sizes that actually cost more per ounce than the products that the defunct neighborhood grocer once sold.
Dollar stores don't just target existing food deserts – they create them. Dollar stores preferentially target Black and brown neighborhoods with just a single grocer and then they use predatory pricing (subsidizing the cost of goods and selling them at a loss) and predatory buying to force that grocery store under and tip the neighborhood into food desert status.
Dollar stores don't just target Black and brown urban centers; they also go after rural communities. The commonality here is that both places are likely to be served by independent grocers, not chains, and these indies can't afford a pricing war with the Wall Street-backed dollar store duopoly.
As mentioned, the "predatory buying" of dollar stores is illegal – it was outlawed in 1936 under the Robinson-Patman Act, which required wholesalers to offer goods to all merchants on the same terms. 40 years ago, we stopped enforcing those laws, leading the rise and rise of big box stores and the destruction of the American Main Street.
The lawmakers who passed Robinson-Patman knew what they were doing. They were aware of what contemporary economists call "the waterbed effect," where wholesalers cover the losses from their massive discounts to major retailers by hiking prices on smaller stores, making them even less competitive and driving more market consolidation.
When dollar stores invade your town or neighborhood, they don't just destroy the food choices, they also come for neighborhood jobs. Where a community grocer typically employs 12 or more people, Dollar General employs about 8 per store. Those workers are paid less, too: 92% of Dollar General's workers earn less than $15/h, making Dollar General the worst employer of the 66 large service-sector firms.
Dollar stores also lean heavily into the tactic of turning nearly every role at its store into a "management" job, because managers aren't entitled to overtime pay. That's how you can be the "manager" of a dollar store and take home $40,000 a year while working more than 40 hours every single week.
Understaffing stores turns them into crime magnets. Shootings at dollar stores are routine. Between 2014-21, 485 people were shot at dollar stores – 156 of them died. Understaffed warehouses are vermin magnets. In the Eastern District of Arkansas, Family Dollar was subpoenaed after a rat infestation at its distribution centers that contaminated the food, medicines and cosmetics at 400 stores.
The ILSR doesn't just document the collapse of American communities – it fights back, so this report ends with a lengthy section on proven tactics and future directions for repelling the dollar store invasion. Since 2019, 75 communities have blocked proposals for new dollar stores – more than 50 of those cases happened in 2021/22.
54 towns, from Birmingham, AB to Fort Worth, TX to Kansas City, KS, have passed laws to "sharply restrict new dollar stores, typically by barring them from opening within one to two miles of an existing dollar store."
To build on this momentum, the authors call for a "reinvigoration of antitrust laws," especially the Robinson-Patman Act. Banning predatory buying would go far to creating a level playing field for independent grocers hoping to fight off a dollar store infestation.
Further, we need the FTC and Department of Justice Antitrust Divition to block mergers between dollar-store chains and unwind the anticompetitve mergers that were negligently waved through under previous administrations (thankfully, top enforcers like Jonathan Kantor and Lina Khan are on top of this!).
We need to free up capital for community banks that will back community grocers. That means rolling back the bank deregulation of the 1980s/90s that allowed for bank consolidation and preferential treatment for large corporations, while reducing lending to small businesses and destroying regional banks. Congress should cap the market share any bank can hold, break up the biggest banks, and require banks to preference loans for community businesses. We also need to end private equity and Wall Street's rollup bonanza.
All of that sounds like a tall order – and it is! But the good news is that it's not just groceries at stake here. Every kind of community business, from pet groomers to hairdressers to funeral homes, falls into the antitrust "Twilight Zone," of acquisitions under $101m. With 60% of Boomer-owned businesses expected to sell in the coming decade, 2.9m businesses employing 32m American workers are slated to be gobbled up by private equity:
Whether you're burying a loved one, getting dialysis, getting your cat fixed or having your dog's nails trimmed, you are already likely to be patronizing a business that has been captured by private equity, where the service is worse, the prices are higher and the workers earn less for harder jobs. Everyone has a stake in financial regulation. We are all in this fight, except for the eminently guillotineable PE barons, and you know, fuck those guys.
At the state level, the authors propose new muscular enforcement regimes and new laws to protect small businesses from unfair competition. They also call on states to increase the power of local governments to reject new dollar store applications, amending land use guidelines to require "cultivating net economic growth, ensuring that everyone has access to healthy food, and protecting environmental resources.
If all of this has you as fired up as it got me this morning, check out ILSR's "How to Stop Dollar Stores in Your Community" resources:
Hey look at this (permalink)
- Should browsers be "user agents"? https://github.com/w3ctag/privacy-principles/issues/241 (h/t Alexei Miagkov)
FTC Seeks Comment on Business Practices of Cloud Computing Providers that Could Impact Competition and Data Security https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-seeks-comment-business-practices-cloud-computing-providers-could-impact-competition-data (h/t Matt Stoller)
Domino's eight-year foray into Italy ends in liquidation https://www.detroitnews.com/story/business/2023/03/22/dominos-eight-year-foray-into-italy-ends-in-liquidation/70038053007/ (h/t Slashdot)
This day in history (permalink)
#20yrsago Ben and Mena: A blogging anthem https://web.archive.org/web/20030402125637/https://stevenf.com/mt/archives/000238.php
#20yrsago State-level DMCA would outlaw firewalls, secure mail https://web.archive.org/web/20030401182840/https://freedom-to-tinker.com/archives/000336.html
#20yrsago A Librarian slams the PATRIOT Act https://web.archive.org/web/20030411065208/http://slingshot.tao.ca/displaybi.php?0077010
#15yrsago Varley’s ROLLING THUNDER: third book in Thunder/Lightning Heinlein juvenile tributes, a smashing success https://memex.craphound.com/2008/03/27/varleys-rolling-thunder-third-book-in-thunder-lightning-heinlein-juvenile-tributes-a-smashing-success/
#10yrsago Beautiful photos of cellphone masts disguised as ugly trees https://www.wired.com/2013/03/dillon-marsh-invasive-species/
#10yrsago Frank Zappa reads the dirty bits of Naked Lunch https://www.openculture.com/2013/03/frank_zappa_reads_nsfw_passage_from_william_burroughs_inaked_lunchi_1978.html
#10yrsago Policy Laundering: how the US Trade Rep is trading away America’s right to unlock its devices https://www.eff.org/deeplinks/2013/03/ustr-secret-copyright-agreements-worldwide
#10yrsago English school (briefly) bans triangular desserts, citing food-fight shuriken risks https://www.loweringthebar.net/2013/03/triangular-treats-banned-due-to-risk-of-sharp-corners.html
#10yrsago Back issues of the NSA’s secret, in-house mag https://web.archive.org/web/20130319105833/https://www.nsa.gov/public_info/_files/cryptologs/cryptolog_01.pdf
#10yrsago DDoS storm breaks records at 300 Gbps https://www.nytimes.com/2013/03/27/technology/internet/online-dispute-becomes-internet-snarling-attack.html
#10yrsago Boxes sealed with ATHEIST tape lost by USPS 10X more often than controls https://atheist.shoes/pages/usps-study
#10yrsago Nuts-and-bolts look at password cracking https://arstechnica.com/information-technology/2013/03/how-i-became-a-password-cracker/
#10yrsago Municipal codes of DC, free for all — liberated without permission https://www.flickr.com/photos/publicresourceorg/sets/72157628540187245/with/8590025663/
#10yrsago Dinner in the Haunted Mansion https://www.disneyfoodblog.com/2013/03/26/dining-in-disneyland-marc-davis-centennial-dinner-inside-the-haunted-mansion/
#10yrsago What could a library do with a gigabit Internet connection? https://web.archive.org/web/20151009124701/https://www.ala.org/advocacy/pp
#5yrsago Law professors and computer scientists mull whether America’s overbroad “hacking” laws ban tricking robots https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3150530
#5yrsago Cops routinely unlock phones with corpses’ fingers https://www.forbes.com/sites/thomasbrewster/2018/03/22/yes-cops-are-now-opening-iphones-with-dead-peoples-fingerprints/
#5yrsago Attacks that unmask anonymous blockchain transactions can be used against everyone who ever relied on the defective technique https://arxiv.org/pdf/1704.04299/
#5yrsago Zuck to Parliament: Drop dead https://www.independent.co.uk/tech/facebook-mark-zuckerberg-uk-parliament-data-cambridge-analytica-dcms-damian-collins-a8275501.html
#1yrago Amazon's relentless personal data foot-dragging https://pluralistic.net/2022/03/27/beware-of-the-leopard/#relentless
Today's top sources: jim haigh (https://twitter.com/jmhaigh).
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The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW
Vigilant, Little Brother short story about remote invigilation. ON SUBMISSION
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. ON SUBMISSION
Latest podcast: Red Team Blues https://craphound.com/news/2023/03/26/red-team-blues/
- Antitrust and Competition Conference – Beyond the Consumer Welfare Standard (Chicago), Apr 20-21
Red Team Blues at Mysterious Galaxy (San Diego), Apr 25
Bay Area Bookfest (Berkeley), May 6/7
Wordfest (Calgary), May 11
Red Team Blues event with Tim Harford (Oxford), May 29
Red Team Blues event with Ian Forrester (Manchester), May 31
UCL Peter Kirstein Lecture, Jun 1 (London):
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Culture Journalist: What is chokepoint capitalism?
Techtonic with Mark Hurst | WFMU
- "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
- Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023
The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023
The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023
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