Business

Does Dollar General Cause Food Deserts?

Dollar General has been accused of causing food deserts in low-income areas. While there is an abundance of anecdotal evidence on this, there has been little empirical evidence. By tracking Dollar General employees and comparing them to traditional grocery store employees, we are able to better understand the relationship between Dollar General and food deserts.

Revelio Labs

6/29/21

Dollar General has been accused of causing food deserts in low-income areas. While there is an abundance of anecdotal evidence on this, there has been little empirical evidence. By tracking Dollar General employees and comparing them to traditional grocery store employees, we are able to better understand the relationship between Dollar General and food deserts.

Although both Dollar General and traditional grocery stores have been growing steadily, in recent years, Dollar General has grown at a faster rate:

plot

Given the increasing market share of Dollar General, we measure the availability of grocery stores by looking at the ratio of grocery employees to non-grocery employees. If Dollar General is driving grocery stores out of business, we would see lower grocery store employee ratios in places with a higher percentage of Dollar General employees.

In the plot below we see a negative relationship between these two quantities, suggesting that Dollar General stores contribute to the decrease in groceries and the formation of food deserts.

plot

Further, the figure below is a list of MSAs that have the highest ratio of Dollar General employees to grocery store employees, representing the worst cases of food deserts that are being driven by Dollar General stores.

plot

Takeaways:

  • Growth of Dollar General stores have accelerated in the past few years relative to the growth of traditional grocery stores.
  • For MSAs with the highest Dollar General presence, the increasing growth of Dollar General coincides with a decreasing grocery store availability.
  • The MSAs with the highest Dollar General to traditional grocery workforce include: Pine Bluff, AR, Pascagoula, MS, and Dothan, AL.

If you have any ideas of other metrics to track or would like to hear more, please feel free to reach out.

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