Dollar Stores Feed More Americans Than Whole Foods (#GotBitcoin)
The Presence Of Dollar Stores Appears To Correlate Much More Strongly With Race (Blacks And Hispanics) Than With Income. Dollar Stores Feed More Americans Than Whole Foods (#GotBitcoin)
- Dollar stores such as Dollar General and Dollar Tree (which also owns Family Dollar) feed more Americans than Whole Foods. Dollar Stores Feed More Americans Than Whole Foods
- Across the U.S., there are now 30,000 Dollar General and Dollar Tree stores — outnumbering Walmart’s and McDonald’s’ combined — and the chains claim to have their sights on another 20,000 locations
- Dollar stores target urban neighborhoods and small towns where economic struggles are commonplace, turning these areas into food deserts as they push out smaller, already struggling grocers
- Driving this trend is the U.S. government’s subsidy of processed food, both through the Farm Bill and through the Supplemental Nutrition Assistance Program (SNAP)
- Research shows people who consume the most subsidized foods have a 37 percent greater risk of obesity than those who consume the least
Dollar stores such as Dollar General and Dollar Tree (which also owns Family Dollar) are becoming a primary source of food for many families.
The chains feed more Americans than Whole Foods, which isn’t surprising when you consider there are 30,000 Dollar General and Dollar Tree stores across the U.S. — outnumbering Walmart’s and McDonald’s’ combined — compared to 446 Whole Foods locations.
The dollar store chains also claim to have their sights on yet another 20,000 locations. The problem with this trend is that dollar stores typically do not carry fresh food; it’s primarily ultra-processed packaged foods and canned foods, which we know is a recipe for ill health in the long term.
Sadly, dollar stores specifically target urban neighborhoods and small towns where economic struggles are commonplace, turning these areas into food deserts as they push out smaller, already struggling grocers. As reported by Institute for Local Self-Reliance (ILSR):
“Although dollar stores sometimes fill a need in places that lack basic retail services, there’s growing evidence that these stores are not merely a byproduct of economic distress. They’re a cause of it.
In small towns and urban neighborhoods alike, dollar stores are leading full-service grocery stores to close. And their strategy of saturating communities with multiple outlets is making it impossible for new grocers and other local businesses to take root and grow.”
Driving this trend is the U.S. government’s subsidy of processed food, both through the Farm Bill and through the Supplemental Nutrition Assistance Program (SNAP). This sets the stage for discount stores to monopolize the food market, which subsequently leads to poorer diets, higher disease rates and associated health care costs.
In truth, food subsidies and health care really cannot be separated, as the nation’s diet is a primary contributor to chronic disease and therefore drives our health care expenditures.
The idea that big box stores and dollar stores are doing Americans a favor by making inexpensive food more available is a twisted one, as it’s really just making people sicker.
ILSR also notes that dollar stores tend to target areas based on race rather than income. Using Tulsa, Oklahoma, as an example, ILSR shows how these stores are congregated in census tracts with more African-American residents, even though there are low-income Caucasian areas as well.
“One reason for this link might be that dollar stores see an easier revenue stream in places that lack competing grocery stores,” ILSR writes. “In the case of Family Dollar, for example, ‘Food deserts’ are its sweet spot,” notes Ann Natunewicz, an analyst at Colliers International.
The absence of grocery stores is, in turn, a direct result of a history of racial discrimination by banks that have been less likely to lend to African American entrepreneurs and by supermarket chains that have tended to bypass black neighborhoods.”
How a near-total diet of ultra-processed food affects health and longevity can be seen in the city’s mortality statistics. Life expectancy in north Tulsa, which is predominantly black, is a staggering 14 years lower than that of the south.
In an effort to address this disparity, Tulsa’s city council has enacted a dollar store ordinance that limits dollar stores in the northern part of Tulsa and provides incentives for full-service grocers instead. As reported by ILSR:
“This is the first ordinance in the country to specifically target dollar stores, and its passage is being felt both locally and nationally. It’s marked a new era of political inclusion and grassroots power for the city’s African American residents. It’s also focused national attention on the growth of dollar stores and inspired other cities and towns to take steps to check their spread.
Who Benefits From Government Food Subsidizes?
In the U.S., 12.4 percent of the population, some 40 million in all as of 2017, live at or below the poverty line and rely on a monthly allotment of food stamps through SNAP to cover their food bill. Today, these monies are doled out once a month via electronic benefit transfer (EBT) cards.
Disturbingly, the fastest-growing group of people on food stamps are people who have jobs and work year-round. Ironically, many of them work in the very same big box stores and discount outlets that profit from the SNAP benefits their employees are forced to use due to low wages.
In 2017, the program distributed $76 billion worth of EBT transfers, and across the country there are about 240,000 retailers approved by the federal government to accept EBT cards (i.e., food stamps).
A 2014 article in Slate Magazine addressed a little-discussed facet of the food stamp subsidy — which stores actually profit from this program, funded by tax dollars, and how much. As it turns out, this data is actually kept confidential.
“Even basic facts such as how many food stamp dollars go to a particular store in a particular location are not publicly available,” Slate notes. “In what stores and neighborhoods are the most food stamp dollars spent? What kinds of foods do those stores promote and sell? What are the store’s business and labor practices?
The answers to those questions might help you see how food stamp subsidies are serving a community — if they’re doing what they were meant to do.”
Discount Stores Likely Gain the Most From SNAP
The confidentiality of SNAP sales information is in sharp contrast to other government programs, where you can find out how much a participating business is getting paid.
What is known, however, is that sales of staple items typically spike on days when SNAP benefits are distributed, both at grocers and discount stores.
Walmart’s annual report for 2014 listed cuts in SNAP payments as a potential risk factor for declining sales, as that same year the U.S. government cut SNAP by $8 billion over the next decade.
And, according to Slate, Walmart likely receives about 18 percent of all food stamp spending in the U.S., based on the company’s own estimates, making it “the biggest single corporate beneficiary of SNAP.” Other players include Target, Costco, 7-Eleven and, of course, dollar stores. Slate notes:
“It’s a paradox that the more people are struggling to get by, the more valuable food stamps become for business. In 2009, the CEO of Family Dollar told shareholders that expanding in to the multibillion-dollar food stamp market represented a ‘significant opportunity’ that would help the company weather the bad economy.”
By Encouraging Junk Food, Government Subsidies Drive Rising Health Care Costs
As mentioned at the beginning, by encouraging dollar stores and other discount stores to accept EBT, the food stamp program has become a driving force of ill health.
Poor people receive money to buy food, but if all that’s available in their neighborhood is dollar stores, the food they buy will be limited to ultra-processed foods that cannot support optimal health.
As a result, they get sick, and must rely on more government aid to receive health care, which then drives up those costs.
The U.S. government also subsidizes junk food ingredients — commodity crops such as corn, soy and wheat — over healthy foods via the Farm Bill, despite dietary guidelines calling for healthy portions of fresh fruits and vegetables on a daily basis.
Considering this is what farmers get paid to grow, it’s no wonder that processed corn, soy and wheat products such as bread, soda, pizza, pasta, cookies and doughnuts account for a majority of calories in the U.S. diet.
Considering these foods are a primary driver of weight gain, it’s also not surprising that people who consume the most subsidized foods have a far greater risk of obesity — 37 percent greater, according to research published in 2016.
As noted by Integrative Nutrition, “While the subsidies were initially implemented to support struggling farmers and to secure America’s food supply, the subsidies program has unintentionally supported the creation of a health epidemic.”
Food Subsidies Cannot Be Separated From Health Care
A September 2017 article1 in The Conversation by Dariush Mozaffarian, professor of nutrition at Tufts University, hit the nail on the head, pointing out that in order to fix America’s health care, we must make food a priority.
Cost is one of the primary challenges of most health care related issues, be it access or the expansion of Medicaid. But changing how care is delivered is never going to solve the problem of how we’re going to afford to care for everyone.
We really have to shift our focus to food, as poor diet is the primary driver of chronic ill health, both in children and adults.
Research has shown as much as 40 percent of American health care expenditures are for diseases directly related to the overconsumption of sugar (a key staple in processed and ultra-processed food).
Time magazine cites data1 showing food insecurity incurs $77.5 billion in added health care expenditures.
Children in food-insecure homes are also less likely to perform well academically, thereby perpetuating the cycle of poverty. Adding insult to injury, once you have a chronic disease such as diabetes, you’re less likely to be able to manage your condition well if you cannot afford real food.
According to Mozaffarian, his research suggests poor diet is the cause of nearly half of all deaths from heart disease, stroke and diabetes in the U.S. “To put this in perspective, about twice as many Americans are estimated to die each year from eating hot dogs and other processed meats (~58,000 deaths/year) than from car accidents (~35,000 deaths/year),” Mozaffarian writes, adding:
“It’s hard to fathom how much our country actually spends on health care: currently $3.2 trillion per year, or nearly 1 in 5 dollars in the entire U.S. economy. That’s almost $1,000 each month for every man, woman and child in the country, exceeding most people’s budgets for food, gas, housing or other common necessities …
Yet, remarkably, nutrition is virtually ignored by our health care system and in the health care debates … Traveling around the country, I find that dietary habits are not included in the electronic medical record, and doctors receive scant training on healthy eating and other lifestyle priorities.
Reimbursement standards and quality metrics rarely cover nutrition. Meanwhile, total federal spending for nutrition research across all agencies is only about $1.5 billion per year. Compare that with more than $60 billion spent per year for industry research on drugs, biotechnology and medical devices.”
Ultra-Processed Junk Food — A Sick Idea That’s Making People Ill
About 90 percent of the money Americans spend on food goes to buy processed food, which matches up nicely with data from the U.S. Centers for Disease Control and Prevention, which suggests 90 percent of Americans don’t eat enough fresh fruits and vegetables to maintain good health.
While that’s bad enough, research reveals nearly 60 percent of the food Americans eat is not just processed but ultra-processed, defined as:
- Food products containing several ingredients that are not traditionally used in cooking
- Besides salt, sugar, oils and fats, they can include artificial flavors, colors, sweeteners and other additives “used to imitate sensorial qualities of unprocessed or minimally processed foods”
- These ingredients may also be added “to disguise undesirable qualities of the final product”
- Products containing preservatives and chemicals that give them an unnaturally long shelf-life
Less than 1 percent of daily calories comes from vegetables. Those ultra-processed foods account for 90 percent of the added sugar consumption in the U.S., and the dangers of eating too much added sugar have been well-established.
Research has even suggested refined non-vegetable fiber carbs such as potatoes, bagels and breakfast cereal are as risky as smoking, increasing your risk for lung cancer by as much as 49 percent.1
The 2015-2020 U.S. dietary guidelines even recommend limiting your sugar intake to a maximum of 10 percent of your daily calories.2 (No sugar limit was ever included in earlier guidelines.)
The difference between processed foods and ultra-processed foods in terms of sugar content is quite dramatic. The researchers found that about 2 percent of the calories in processed foods came from added sugars. By definition, unprocessed or minimally processed contained none. Ultra-processed foods, meanwhile, got 21 percent of their calories from added sugars!
Protect Your Health by Eating Real Food
There’s no doubt we have serious health epidemics on our hands — and that a majority, if not all of them, are linked to our government’s subsidy of junk food over real food, and a system that encourages the use of SNAP benefits in discount stores selling nothing but ultra-processed food.
There are no quick and easy answers here. All you can do is remember that your diet really is the foundation upon which your health is built, and that eating a processed food diet is a recipe for long-term disaster.
Studies have repeatedly shown that real food is more expensive than processed fare, and there’s no denying the fact that there are areas where the only food retailers available are dollar stores and gas stations.
Still, if you have access to real food, I encourage you to take the time to learn how to cook from scratch and make the most of any leftovers. Also consider growing some of your own.
To learn more, see my previous article on creating edible gardens in small spaces. I’ve also written about how you can garden during the winter. This clearly requires a bit more dedication and planning, but it can be done if you have the will.
One of the easiest foods to grow at home, even if you’re new to gardening and have limited space, is sprouts. A highly-concentrated source of enzymes, vitamins, minerals and other phytochemicals, sprouted seeds are a true superfood that many overlook. In fact, the protein, vitamin and mineral content of many sprouted seeds far surpass that of organic homegrown vegetables.
Also emphasize foods high in healthy fats, such as avocados, coconut oil, butter and nuts. The high fat content will provide you the calories you need despite smaller portions and keep you satiated longer (opposed to high-sugar, low-fat meals which will have you craving more food in a matter of hours).
Healthy fats will also promote efficient fat burning and support mitochondrial health, which is essential for cellular functioning.
Dollar-Store Dinners And Vats Of Shampoo Help Families Cope With Inflation
With energy and grocery prices rising, many are cutting their spending on essentials.
More Americans are embracing frugality as they face rising prices at every turn.
With energy costs up 41.6% and groceries 12.2% more expensive than they were last year, according to June’s Consumer Price Index, many families say that skipping vacations and restaurant meals is no longer enough.
They are now finding ways to cut costs on essentials as inflation remains high.
One way they are doing so is by relying more on dollar and discount stores for groceries. Average spending on grocery products at discount chains increased 71% from October 2021 to June 2022, according to analytics firm InMarket.
Over that time period, spending on the same items in grocery stores decreased by 5%. Many large consumer brands—including Walmart and Unilever—attest that their prices aren’t going down anytime soon.
In San Antonio, Lily Penelope is eating mostly canned chicken, vegetables and peanut butter from the Dollar General down the street.
Mx. Penelope, who uses gender neutral pronouns and has a disability that makes them unable to drive, says they can no longer afford the cost of groceries plus an Uber to and from the HEB grocery store 3 miles away.
Before January, $120 covered a round-trip Uber plus two weeks of fresh ingredients for meals for them and their wife, they say. Now, the same trip costs nearly twice as much.
Since Mx. Penelope’s dollar store doesn’t sell fresh produce, they add spices and salt to camouflage canned ingredients. “My health and the quality of my life has gone down,” says Mx. Penelope, 26, who relies on their wife’s call-center income.
“I’m in a position where I’m having to choose between making meals I can afford and putting my health on the line.”
Roughly 2,300 Dollar Generals across the country currently stock fresh produce, out of more than 18,000 total locations, according to a Dollar General spokeswoman.
“While Dollar General isn’t a full-service grocer, we consider ourselves today’s general store by providing nearby and affordable access to daily household essentials, including the components of a nutritious meal,” she says.
The company plans to expand fresh produce to a total of more than 10,000 stores in the next several years.
Phoenix Kamlo, 41, has been relying on the Family Dollar for an increasingly large share of groceries for his family of five.
“Everything in there is super-duper sweet,” he says, citing the high sugar content of goods from tea to canned fruit. “But it’s nearby, and it’s cheap.”
Income from his Wichita, Kan., tailoring and alterations business has gone down in recent months, he says. He suspects his longtime customers are more focused, like he is, on affording enough to eat.
A spokeswoman for Dollar Tree, which owns Family Dollar, says the chain aims to complement, not replace, grocery stores.
She adds that most of the 16,162 stores offer frozen fruits and vegetables, along with sugar-free options, fruit juices, nuts, beans, whole wheat products, eggs and milk.
Other households are buying in bulk or making do without items they never used to think twice about spending money on. Sam’s Club membership income was up 10.5% year-over-year, according to parent company Walmart’s May earnings call.
Consumer-products giant Procter & Gamble Co. just posted its largest sales gain in 16 years. Still, the company is predicting its slowest sales growth in years as consumers cut back on household staples like the company’s Tide detergent and Pampers diapers.
Elayna Fernandez, a 45-year-old single mom of four, has taken on the role of shampoo-and-conditioner police, making sure her longhair daughters don’t use more than they need.
“I am very conscious about not using a lot of those products,” says Ms. Fernandez, who runs a digital-marketing company and parenting blog.
She recently purchased a Sam’s Club membership to buy more in bulk, and switched to store-brand versions of almond milk and granola bars.
After receiving a $300 June electric bill, Ms. Fernandez swapped her 1-year-old daughter’s plug-in night light for glow-in-the-dark stick-on ceiling stars. Ordinarily, electricity for her Fort Worth, Texas, home is under $100 a month.
The Department of Commerce said Friday that consumer spending rose 1.1% in June, up from 0.3% in May. Lower-income families are switching brands, saving less and cutting what they can, according to economists.
Colleen Carswell, who has four children under age 8, has been cooking more vegetarian meals for her family to save money. Meats, poultry, fish and eggs are up 11.7% year-over-year in price, according to the CPI, while fruits and vegetables are up 8.1%.
Ms. Carswell and her husband, Charlie Carswell, small-business owners in Waynesville, N.C., have cut out organics but still buy fresh fruit, though it is hard keeping up with the eating habits of young children.
“They love to take a bite and then they’re done. We have wounded apples all over the house,” says Ms. Carswell, 36.
The family shares what Ms. Carswell calls a “vat” of shampoo and conditioner, and she has been wearing less makeup. She says she has been using some products past their expiration dates.
They have also stopped buying paper towels. “People come over to the house and are like, ‘Where are your paper towels?’ and we’re like, ‘Here’s a rag,’” she says. And they purchased a bidet to try to save on toilet paper.
“I’m going to be honest…that thing hasn’t gone in yet,” she joked. “My husband and I both keep putting off the install hoping the other one will do it.”
Dollar General: No Longer Downturn-Proof
Pinched lower-income consumers are cutting back, and middle-class ones aren’t trading down enough.
Dollar General thrived in the last economic downturn. This time seems different.
The retailer said on Thursday that comparable-store sales rose 1.6% in its quarter ended May 5 compared with a year earlier—markedly worse than the 3.8% Wall Street analysts expected.
Net income declined 6.9%. Sales trends were weak enough that the retailer lowered its guidance for the year: It now expects same-store sales growth of 1% to 2%, down from its prior expectation of 3% to 3.5% growth.
Dollar General’s shares plummeted nearly 20%, the worst daily drop in its history. Its shares now trade at 0.87 times expected revenue, lower than peer Dollar Tree, which is undergoing a turnaround with former Dollar General boss Rick Dreiling at its helm.
The company blamed worse-than-expected macroeconomic forces, noting that its typically lower-income customers were caught off-guard by lower tax refunds and a reduction in food-stamp benefits. Chief Executive Officer Jeff Owen said they are relying more on items priced at $1 or below.
Similar to those of other retailers, many of Dollar General’s customers shifted spending to lower-margin consumable categories. While consumable category sales rose 8.9%, apparel sales fell 8.1%. Meanwhile “shrink,” or theft, pressured its margins, though that was mostly offset by other factors, including a decline in transportation costs.
It wasn’t supposed to be this way: The dollar-store chain dominated during the last economic downturn, outpacing Walmart’s domestic same-store sales growth in every quarter starting in 2008 until the first fiscal quarter of 2010.
There are three reasons why history might not repeat: One is that the economic pinch is different now with inflation stubbornly high and unemployment at a multidecade low. Even with jobs, lower-income households with little or no financial cushion may find themselves trimming on necessities.
Dollar General said during the earnings call that some customers are relying more on food banks and that more are shopping soon after their payday.
Meanwhile, employed higher-income consumers are feeling squeezed too, but perhaps not enough to trade down to dollar stores. The likes of Walmart are seeing the benefit, not Dollar General. Dollar General Chief Financial Officer Kelly Dilts said the company assumes no significant trade-down benefits from higher-income customers in this fiscal year’s guidance.
Finally, Dollar General is dealing with much stronger competition this time around. With Dreiling at its helm, Dollar Tree has been turning its historically lagging store traffic and sales around—both at its namesake stores and Family Dollar. Notably, Family Dollar has been lowering its prices to close its gap with competitors.
Dollar General’s results already look a lot worse than both Walmart and Family Dollar: Its 1.6% same-store sales growth was far behind the 6.6% and 7.4% growth that Family Dollar and Walmart U.S. saw in their most recent quarters, respectively.
Ironically, it may take a much deeper economic downturn to turn things around at Dollar General.
Dollar Stores Flash Warning Signs On Consumer Spending
Dollar General, Dollar Tree say shoppers are shifting spending toward food, essentials.
Dollar General shares fell to their lowest levels in years after the discount retailer cut its outlook for the year amid signs that its customers are pulling back on purchases.
Dollar General reported slowing sales in the recently ended quarter and said its inventory of unsold goods is piling up. The Goodlettsville, Tenn., company said it plans to burn through profit in the second half of the year to reduce inventory and improve performance at its stores.
Like other retailers, Dollar General also said it expects store theft to keep rising.
“Our core customers continue to tell us they feel financially constrained,” Chief Executive Jeff Owen said. “Her savings are gone, and so certainly she is still living with the inflationary pressures.”
The chain has been trying to avoid passing along higher prices to its customers and has even reduced prices in some areas, Owen said.
Sales in May held strong, he said, before deteriorating through the summer as shoppers focused on necessities. Heading into the holiday season and the second half of the year, Owen said Dollar General plans to whittle down its inventory through markdowns. The company also plans to invest more in its workers.
The readout comes as government data indicate that household spending rose more than economists expected in July. Americans spent more on groceries, dining out, services such as housing and more as price pressures remained modest.
Other discount retailers have issued dour outlooks for the remainder of the year as higher prices and rising interest rates weigh on consumers’ appetite for discretionary spending.
Retailers, especially those that cater to middle- and lower-income customers, have also cited reductions in government food-assistance benefits and lower tax refunds as sources of pressure.
Both Dollar General and rival Dollar Tree have said their customers are pulling back on discretionary purchases while spending more on food and essentials, which are less profitable. The companies are also grappling with higher labor costs.
Five Below, a value retailer catering to teens and tweens, earlier this week also cut its full-year profit outlook, citing challenges with shrink, an industry term that refers to goods lost to damages and theft.
Executives, though, said demand is holding up as more shoppers hunt for deals.
“Value is really in vogue again,” Chief Executive Joel Anderson said.
Conn’s, which sells homegoods and offers its own financing, said banks are tightening their lending standards, which is pushing more subprime customers to borrow directly from the chain. Delinquencies have remained stable, Chief Financial Officer George Bchara said.
“The further you go down that credit spectrum, the more stress we see with that consumer,” CEO Norm Miller said.
There are some bright spots for other discount retailers. Off-price apparel retailer Ross Stores earlier this month issued an upbeat outlook for the rest of the year and said customers are still spending on clothes, but looking for value.
“The customer, with moderating inflation, is feeling a little bit more room to spend money,” Chief Executive Barbara Rentler said. “But again, our customer is moderate- to low-income customers, so she still faces inflation in front of her.”
Ollie’s Bargain Outlet, which offers steep discounts on products that it buys from overstocked stores or others that are going out of business, raised its full-year sales and profit outlook on Thursday.
The company is benefiting as other retailers look to reduce their inventories amid the pullback in spending.
Customers are also responding to deep discounts. “When we show our customers our great deals, it drives excitement traffic,” Chief Operating Officer Eric van der Valk said.
Big Lots, a discount purveyor of home goods, this week said it saw a pickup in demand for its low-price goods as more consumers adjusted their spending habits to financial stress.
Although the retailer expects its sales to improve sequentially throughout the year, Big Lots said inflation disproportionately affected its lower-income customers, who delayed or pulled back their spending on discretionary items, CEO Bruce Thorn said on a call with investors.
Consumers are largely making trade-offs as expenses mount.
“Our core, lower income customer remains under significant pressure and has limited capacity for higher-ticket discretionary purchases,” Thorn said.
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