FARRELL — When Silas Lee realized — hours before his charitable organization’s event — that he needed several bags of ice, there was only one place to stop.
Dollar General.
“I usually get last-minute stuff,” said Lee, CEO of Chainbreaking Corp., a nonprofit devoted to youth development and outreach.
Lee said he needed the ice for an event his organization had planned at Frank Fay Terrace, a Mercer County Housing Authority facility.
But Lee said he is a regular Dollar General customer, with about one or two trips to the store every week. The attraction stems from the store’s business model — convenience store service with discount shop prices.
“A combination of low prices, and you don’t have to stop at a grocery store for just one or two items,” Lee said.
Dollar stores in general, and Dollar General in particular, seem to be appearing everywhere, and not just locally. Coresight Research, a firm that focuses on disruptions in the retail industry, reported in May that Dollar General corporate officials planned to open more than 1,000 new stores this year.
There was a proposed store coming to Butler Twp., but zoning officials denied a variance for that facility in June. It would have been three miles from another location open in the township. Another zoning denial came earlier this year in West Mahanoy Twp.
In all, though, there are 15 Dollar General stores in Greater Hazleton and the surrounding area — stretching from Mountain Top to Mahanoy City.
Dollar General and the nation’s other two large dollar store chains — Dollar Tree and Family Dollar — are aiming to open more than 1,600 new outlets this year, about 45% of the total retail store launches expected in 2021. By itself, Dollar General represents about 30% of those new openings.
This year’s Dollar General openings do not include a store planned for Hermitage, which would be the city’s fourth.
With planning commission approval, city commissioners are likely to grant final approval at their voting meeting Aug. 25. Commissioner Michael Muha announced on Facebook on July 27 that he planned to vote against the Dollar General proposal.
However, the city is legally bound to approve the Dollar General proposal because it meets the city’s major zoning requirements. Muha expressed reservation that Hermitage’s third Dollar General could have an impact on locally owned shops, but said there was little city officials could do.
”Something voters have come to me over the past two and a half years about is ‘why don’t we have a Target?’ or ‘why do we need two Taco Bells?’ which I agree with, but we don’t have a say in that,” Muha said in January. “The market makes the determination, and the developers come to us with plans, and we approve those plans.”
The “five-and-dime”
Muha’s concern about Dollar General’s impact on local businesses is a valid one, said Dr. Sunita Mondal, an economics professor at Slippery Rock University.
As the nation’s fastest-growing retail chain, Dollar General can take advantage of economies of scale — even dictating that suppliers provide items specifically for the store — to maximize its profits and make it more difficult for smaller, locally based retail businesses with lower profit margins to survive.
“They find it really hard to compete,” Mondal said. “When they go out of business, that really has an impact on the local economy.”
While Dollar General could be the modern-day equivalent to the “five-and-dime” stores in decades past, Mondal said Dollar General differs in one key way. The old corner stores were usually locally owned, which meant their revenues stayed in town, spent at other local stores and donated to community organizations.
Dollar General is based in Goodlettsville, Tenn., which is the final destination for all profits from its local stores.
“The dollars don’t stay in the local economy,” she said.
Angela Petkovic, a spokeswoman for Dollar General, said in a statement that the company enriches the local community by employing residents and paying wage and benefit packages she called competitive. About 75% of the chain’s store managers are promoted from within
”We are proud to employ local residents and create opportunities for individuals to join Dollar General and grow their careers with us,” Petkovic said. “In fact, our employees have access to award-winning and world-class training and development opportunities, as well as a pathway to advance their career in our organization.”
If Dollar General opens the planned store, that would give the chain nine stores in a span of less than 30 square miles, with single stores in Sharon, Farrell, West Middlesex and two in Brookfield Township, Ohio, in addition to the four in Hermitage.
Petkovic said the company considers several factors — chiefly customer service — in the site selection process.
”Our customers are at the center of all that we do,” she said. “In selecting store sites, we take a number of factors into consideration, carefully evaluating each potential new store location to ensure we can continue to meet our customers’ price, value and selection needs.”
And customers appreciate that.
While the perception of Dollar General might be in its low cost, Odin Smith of Sharon likes the convenience. Smith, owner of the Emerald Tablet shop in Sharon, said he shops at Dollar General “sometimes” in minor emergencies.
In Smith’s estimation, price is a secondary consideration.
“That’s the place I stop when I need something real quick,” he said. “An extra 25 or 50 cents (somewhere else) doesn’t make a big difference.”
Race to the bottom
Smith acknowledged that Dollar General stores seem to be, “popping up everywhere.” For Shaun Matthews of Sharon, that’s part of the allure.
Matthews said he shops at Dollar General a couple of times a week, mostly for personal and hygiene items.
“Because it’s convenient,” he said when asked why he uses the store, but also cited the store’s low prices.
The growth of Dollar General and other dollar stores might make a statement about the nation’s economy. The Coresight Research report said the company’s popularity is a reflection of the hollowing of the American middle class.
Mondal sees it the same way. She said dollar stores might be targeting people who can no longer afford to shop at Walmart, especially with employment still rebounding from the COVID-19 pandemic.
“We know people are switching jobs, they’re between jobs,” she said. “When that happens, I think you’re becoming more thrifty.”
With Dollar General adding expanded selections in the frozen food departments of its stores, Mondal said people could do more of their grocery shopping behind its doors. But she said the store doesn’t offer fresh vegetables, which can contribute to unhealthier outcomes among its customers.
But Petkovic said the company’s growth is a case of a company filling an opening in the market, and predicted that the planned Hermitage store would be a boon for the community.
”We strive to be a positive business partner and good community neighbor, and we believe the addition of each new store would provide numerous economic benefits, among which include the creation of new jobs, generation of additional tax revenue for the city and the affordable accessibility to household essentials,” she said.
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