Dollar Stores Can Worsen Food Deserts in Some U.S. Cities, New Research Finds
A new academic study is raising fresh questions about the rapid spread of dollar stores across the United States and how they affect access to healthy food in certain communities. Researchers from the University of Florida have found that while dollar stores do not always reduce grocery access, they can make food access significantly worse in specific urban neighborhoods, particularly those that are already under-resourced.
The study focuses on a long-standing debate among policymakers, economists, and community advocates: when a dollar store opens in a neighborhood, does it help residents by offering low-cost goods, or does it quietly undermine local grocery stores and make it harder to buy fresh food? According to this research, the answer depends heavily on where the dollar store opens and what already exists in that neighborhood.
What the Study Examined
The research was conducted by economists from the UF Institute of Food and Agricultural Sciences (UF/IFAS) and published in the American Journal of Agricultural Economics. The team analyzed neighborhood-level data spanning 2006 to 2020, a period when dollar stores expanded rapidly across both urban and rural America.
Instead of relying on simple comparisons, the researchers used machine learning techniques to analyze a large dataset that included:
- Neighborhood demographics
- Retail locations
- Transportation access
- Income and poverty levels
- Reliance on public assistance
- Vehicle ownership and public transit use
The central question was straightforward: when a dollar store opens in a neighborhood, does overall access to grocery stores decline?
The Core Finding: Impacts Are Real, but Not Everywhere
The study found that in most neighborhoods, the opening of a dollar store had little to no measurable impact on food access. However, in a specific subset of urban neighborhoods, the effects were clear and concerning.
In about 14% of urban census block groups, areas that already had only one grocery store, the arrival of a dollar store led to a significant decline in food access. In these neighborhoods, the grocery store was more likely to close or become less viable after the dollar store entered the market.
Importantly, the researchers found that the negative impact was not a one-time effect. Each additional dollar store opening made the problem worse, compounding the reduction in grocery access over time.
Which Neighborhoods Are Most Affected?
The study identified several neighborhood characteristics that made communities more vulnerable to these negative effects. Urban areas were more likely to experience reduced food access after a dollar store opened if they had:
- Larger Black populations
- High poverty rates
- Heavy reliance on public assistance programs
- Limited access to personal vehicles
- Greater dependence on public transportation
These factors matter because residents in these neighborhoods already face barriers to traveling long distances for groceries. When a nearby grocery store closes or scales back, residents may have few realistic alternatives for purchasing fresh and nutritious food.
Urban vs. Rural Differences
While dollar stores also open frequently in rural areas, the study found that the pattern there is different. Rural communities did experience some effects, but far fewer than urban areas, and the impacts did not consistently follow demographic patterns.
In other words, while dollar store expansion can influence rural food access, the effects are less predictable and generally less severe than in vulnerable urban neighborhoods.
Why Dollar Stores Might Replace Grocery Stores
Dollar stores typically offer:
- Shelf-stable packaged foods
- Snacks and sugary beverages
- Limited refrigerated or fresh items
Because they operate with lower overhead costs and smaller store formats, they can undercut traditional grocery stores on price for certain items. In neighborhoods with thin profit margins, even small shifts in consumer spending can make it difficult for a full-service grocery store to survive.
Over time, residents may rely more on dollar stores for convenience and affordability, even though these stores do not offer the same range of fresh foods, contributing to the development or worsening of food deserts.
Understanding Food Deserts and Why They Matter
A food desert is generally defined as a low-income area where residents have limited access to affordable and nutritious food, especially fresh fruits, vegetables, and meats. These areas are linked to higher rates of:
- Diet-related diseases
- Obesity
- Diabetes
- Heart disease
Access to healthy food is now widely recognized as a public health issue, not just an economic one. That is why the growth of dollar stores has attracted attention from city governments and federal agencies alike.
Policy Responses and Why This Research Matters
Over the past two decades, many cities have introduced zoning restrictions or temporary bans on new dollar store locations. These policies were often driven by concerns that dollar stores might crowd out grocery stores and worsen food access.
Until now, economists were unsure whether these concerns were fully supported by data. This study helps clarify that the concerns are valid in certain situations, though not universally.
The researchers emphasize that one-size-fits-all policies may not work. Because the effects vary so much from neighborhood to neighborhood, any policy response should be carefully targeted rather than broadly applied.
Are Dollar Stores Always a Problem?
The study does not argue that dollar stores are inherently harmful. In many communities, especially those with multiple grocery options, dollar stores may have no meaningful effect on food access at all. In some cases, they may even provide short-term convenience for households with limited budgets.
The researchers also note that more work is needed to understand:
- Whether dollar stores can improve food access in certain contexts
- Whether they improve overall consumer well-being despite harming grocery stores
- How different product offerings influence long-term outcomes
These unanswered questions suggest that the role of dollar stores in local food systems is complex, not purely negative or positive.
Why This Research Is Important Right Now
Dollar stores continue to expand rapidly across the U.S., often targeting neighborhoods that lack other retail investment. At the same time, food insecurity remains a major challenge for millions of Americans.
This study provides policymakers with evidence-based insights that can help guide smarter decisions about zoning, economic development, and food access initiatives. Rather than relying on assumptions, cities can use this research to identify where intervention is most needed.
Research Reference
The varying effects of dollar stores on food access: A machine learning analysis
American Journal of Agricultural Economics (2025)
https://doi.org/10.1111/ajae.70025
