When Dollar Stores Close, US Families on Food Benefits Face Challenges

By Jessica DiNapoli and Kaylee Kang

NASHVILLE – Almost every day, Latrina Begley, 37, and her six children relied on the Family Dollar store near their home in Nashville to purchase essentials like Hot Pockets, frozen pizza, and milk using federal food benefits. However, earlier this year, Family Dollar closed this location as part of a broader plan to shutter nearly 1,000 of its 8,200 stores, aimed at improving profitability. Sales at the retailer had already been negatively impacted by cuts to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, which were enacted after the conclusion of the COVID pandemic.

According to retail research firm HSA Consulting, purchases made with SNAP account for $11 of every $100 spent at Family Dollar. The store’s closure has left Begley with a limited selection of nearby convenience stores that offer higher-priced items she cannot afford. The U.S. Department of Agriculture (USDA) has classified her neighborhood, which is historically Black, as low-income with limited access to healthy and affordable food, a situation previously referred to as a food desert.

“It’s harder for us and me,” said Begley, who works at the city’s housing agency. “I have to stop after work, or else we don’t have anything for the night.”

Begley depends on her mother to assist with childcare and finances. If her mother were unavailable, she would have to turn to food pantries for support.

A Reuters analysis found that most of the Family Dollar closures are occurring in areas where they face competition from other budget retailers. Although Family Dollar’s parent company, Dollar Tree, has not disclosed the specific locations of the closed stores, a review identified 648 shuttered Family Dollar locations. Fifteen of these were situated in urban neighborhoods similar to Begley’s, characterized by high poverty rates and limited nearby shopping options.

The company’s executives acknowledged that sales declines were linked to reductions in food assistance benefits, with a noticeable correlation between decreased payments and monthly sales figures.

Experts warn that the store closures will exacerbate food access issues in impoverished communities that heavily depend on federal food assistance and low-cost retailers. Food prices at drug and convenience stores tend to be considerably higher than those at dollar stores, which typically offer a greater variety of affordable, private-label products.

Family Dollar has marketed its stores as convenient places for low-income shoppers to make “fill-in” purchases between visits to larger supermarkets. Data shows that those using food benefits at dollar stores tend to rely on them for staple items far more than shoppers paying through other means.

In a recent statement, a Dollar Tree representative emphasized their commitment to seeking favorable opportunities for Family Dollar’s long-term success and ongoing investments in both new and existing locations.

Despite reporting a gross profit of $4.6 billion for the first half of this year, the company is considering selling or spinning off Family Dollar.

The spokesperson also mentioned that food benefits could be used for orders placed through a grocery delivery app, though prices may be higher than in-store, and food assistance cannot be applied to delivery and service fees.

“These closures remove a shopping option for those who have relied on it to provide more food than ever before,” said Sean Cash, an economist at Tufts University. “This will increase challenges around food access.”

The USDA defines low-income neighborhoods as those where more than 20% of residents earn below the poverty line, which is roughly $30,000 for a family of four.

As Family Dollar stores close, buying power decreases at remaining options like drugstores and convenience stores. For instance, a pack of eight hot dogs costs $4.95 at Family Dollar compared to $5.99 at a nearby drug store.

While most Family Dollar locations do not stock fresh produce, they fill a crucial gap for communities lacking other grocery options. They also provide affordable household necessities such as laundry detergent and toiletries.

C.J. Sentell, CEO of the Nashville Food Project, stated that the closures worsen an ongoing issue, noting that areas like North Nashville have few grocery stores, with many local shops having limited offerings. He added, “While the food may not be perfect, we can’t let the perfect be the enemy of the good.”

Since 2019, numerous municipalities have taken steps to limit the expansion of dollar stores, arguing they threaten local grocers. Family Dollar did not comment on these concerns.

Despite operating under different pricing structures, dollar stores have become among the fastest-growing retail segments in the U.S., with nearly 37,000 locations accounted for by major players Dollar Tree and Dollar General.

Company executives noted that many of the stores they are closing had been under-invested over the years, making repairs impractical. However, the retailer is also planning to open new locations—69 shops and 19 relocations in the last six months.

Recent data revealed that the only new store opened in a high-poverty area was a previously closed location in Norfolk, Virginia.

Tonya Young, who frequently shops at Family Dollar for affordable snacks for her grandchildren, lamented the closures, which have forced her to rely more on local resource centers for support.

Without reliable access to affordable groceries, local residents like Stanley Chase are struggling. A former customer of the now-closed Family Dollar, Chase faces long commutes to grocery stores, resulting in higher costs for food and relying on the generosity of others to meet his nutritional needs.

Family Dollar had initially embraced food benefits as a means to increase sales, investing in coolers and expanding food selection to participate in the program. This strategy proved successful, particularly during the pandemic when families flocked to the stores to stock up.

Now, as they proceed with planned store closures, the community continues to wrestle with the damage done to their access to affordable food.