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Dollar General: Blessing or Curse?

Photo by Nat Frothingham
Photo by Nat Frothingham

 by Ed Sutherland

Dollar General. The discounter’s name elicits either excitement or terror, depending on your point of view.

The company has called Vermont an ideal market: rural, many small towns with low-income residents.  In 2007, there were just seven Dollar General locations in the state. Today, the chain has 23 stores here, with five more planned for opening by year’s end, according to the Tennessee-based firm.

Earlier this year, a Dollar General spokesperson told Vermont Public Radio, “We’ve been very well received in the markets that we’re operating in Vermont.  Our stores do quite well.” Indeed, Vermont has the largest number of Dollar General outlets in any New England state.

A quarter of the Vermont stores have made Washington County home. Three of those are in Barre and Berlin. What has been the impact of Dollar General on area businesses, particularly grocers?  When the firm released its latest financial figures, it announced that perishables—which, in its parlance, means groceries from paper towels to peanuts—made up the majority of its sales.

“It’s hard to know the impact of Dollar General,” Jim Harrison of the Vermont Retail & Grocers Association told The Bridge. “The total grocery pie is just so big. Every store that sells groceries divides up that pie to some extent. … So the stores definitely have an impact as they take purchases out of the market that would otherwise go to a grocery store. Some retailers may benefit from increased traffic a Dollar General may bring to an area if located nearby, but [that’s] not always the case.”

In an email interview, Chris Violette, zoning and planning director in Barre Town, where the chain maintains one outlet, wrote, “My experience with Dollar General was positive. They were very engaged during the permit process and we didn’t really have any issues with them.”

He said some misconceptions exist about the retailer..

“My experience is that they are a business that employs people, provides a tax benefit to the town, and provides products at a price people seem to be able to afford.” As head of planning, he believes Dollar General benefits Washington County.

“Dollar General views themselves as a neighborhood store offering just about anything except gas. We were told at the time they were building here that they are the fastest growing retailer in the country. Based on my travels I believe it. Overall I don’t think it is a negative.”

Dollar General has made inroads into Vermont where a hulking Walmart hasn’t. In fact, the discounter has overtaken the Arkansas-based retailer—the world’s largest—in terms of number of U.S. locations. The smaller store size, many believe, is key. A 7,000-square-foot outlet is more amenable to local zoning that a 70,000-square-foot Walmart. In fact, Walmart has recently opened smaller food stores in hopes of regaining its lead.

But Dollar General has encountered vocal opposition, too, in some prospective locations around the Green Mountain State. Residents of Chester, a community of some 3,000 heavily dependent on its historic charm, have kept a 2012 town decision to allow the chain in tied up in court.  South Hero residents are doing the same. Alburgh, where yet another Dollar General is planned, is known for its lack of chain stores.

The Preservation Trust of Vermont is helping fund the opposition in Chester. Paul Bruhn, the Burlington-based organization’s executive director, explained the group’s problems with Dollar General. Topping the list: sprawl.

“Dollar General usually picks locations that are out of town,” Bruhn said. He would prefer to see the stores concentrated in a downtown area. There are also design problems with the stores themselves. The designs “tend to be overstated,” he said.

Bruhn believes planners should respect communities that have strong identities. “We absolutely respect their desire” to retain that image, he said.

What could be the impact of Dollar General in Washington County and elsewhere in Vermont? “These are all very new,” Bruhn said, meaning the discounter’s locations throughout the state. He suggested it may be years before the real result of Dollar General’s entrance into Vermont is known.

Right now, however, Washington County is dealing with persistent unemployment, making it the perfect location for dollar stores.

“What we are experiencing with the rise of the dollar store economy is the reality that the spending ability of the middle class has shrunk,” Washington County’s sen. Anthony Pollina told The Bridge. “At a time when income and wages are lower than they were 10 years ago, these stores have been thriving because they are designed to appeal to people with shrinking rather than growing resources.”

As for any compromise, Bruhn said he has met with a Dollar Store representative to suggest that the firm locate future sites in downtowns, and to raise redesign issues. So far he has not received a response. There’s more to the Dollar General question than one meeting is going to resolve. Indeed, it appears that the debate over inexpensive merchandise, large national outlets, and their interface with Vermont’s legendary small-town charm will extend well into the future.