Some chain “dollar stores” in the United States are closing down due to certain restrictions on federal food subsidy policies hitting their sales figures. This has left many low-income families, who rely on food vouchers provided by the Department of Agriculture as a lifeline, struggling.
According to Reuters, the American grocery chain “Family Dollar” closed nearly 1,000 of its 8,200 stores earlier this year. This was because the US government cut back on its largest anti-hunger safety net, the Supplemental Nutrition Assistance Program (SNAP), after the end of the pandemic last year, impacting the sales of these discount retailers.
Data from the retail research company HSA Consulting shows that for every $100 spent at Family Dollar, $11 was completed using food stamps.
With these budget stores closing, the cost of living for some low-income families has increased. The food prices at other nearby convenience stores are higher, making it almost unaffordable for them.
At the end of last year, executives at Dollar Tree, the parent company of Family Dollar, linked the soft sales to the reduction in food subsidies. They noted that the sales at Family Dollar were “declining month by month,” corresponding to the gradual decrease in the proportion of customers using food stamps to make purchases.
Policy experts, professors, community leaders, and healthcare providers told Reuters that after experiencing persistent high inflation, closing down these cheap chain stores for poverty-stricken communities that rely on federal food welfare programs and dollar stores will make it harder for residents to buy groceries.
Low-income consumers emphasized that the grocery prices at dollar stores are much cheaper than those at large retailers like Kroger, Walmart, and Target.
The Institute for Local Self-Reliance, a nonprofit organization, stated that since 2019, 61 cities including Chicago and Tulsa, Oklahoma, have taken less positive actions against dollar stores, limiting the expansion of dollar stores through laws because they undermine the competitiveness of local grocery stores.
Dollar stores, although they now sell items priced over $1, are among the fastest-growing retailers in the US. The companies that own and operate Family Dollar, Dollar Tree, and its larger competitor Dollar General run nearly 37,000 dollar stores in the US.
However, executives at Dollar Tree stated in June that for many of the stores set to close, the company’s investment is inadequate as the costs of repairing these stores are too high.