Surprising data on who's shopping at the discount chains.
"We are awakening to a dollar-store economy," proclaimed The New York Times Magazine this past summer.
Long popular among the poor, the Great Recession has been a boon to dollar stores, bringing in a whole new wave of customers. "Same-store sales, a key measure of a retailer’s health, spiked at the three large, publicly traded chains in this year’s first quarter - all were up by at least 5 percent," the Times article noted.
Dollar stores have been proliferating in cities in recent years. A couple of weeks ago, Dollar General announced plans to create 6,000 new jobs and build 625 new stores; Family Dollar will open 300 new branches.
It's not poverty that's driving the boom, but anxiety. Though 42 percent of the stores' customer base earns less than $30,000 per year, Dollar General notes that 22 percent earn $70,000 or more. Much has been written about how post-crash consumers are dialing back their spending, paying down their debts and increasing their savings - a "new normal" in which conspicuous frugality replaces conspicuous consumption.
But what of the geography of dollar stores: What does their location tell us about the evolving economic geography and the geographic disparities at work across America?
MPI alum and UCLA urban planning graduate student Patrick Adler has been assembling data on the geography of dollar-stores for some time, collecting and collating information on the number of chain dollar-stores across the continental United States and tracking their density on a per population basis. The data below comes originally from a Colliers report on the dollar-store economy.
The map above by MPI’s Zara Matheson shows the distribution of dollar stores per 10,000 people. West Virginia, Mississippi, Alabama and Louisiana have the largest concentrations of dollar stores.* Indeed, something like a "dollar store belt" can be discerned, stretching from Ohio and Indiana in the north, through Kentucky and Tennessee to the Gulf Coast.
What conditions do their locations reflect? To get a better sense of this, my colleague Charlotta Mellander ran correlations against a variety of economic and demographic factors. Correlation, of course, is not causation. Though the associations she found are highly suggestive, other factors we didn’t consider might be equally or more important. That said, the geography of the dollar store economy provides a powerful lens into the fault lines of income, class and race.
Let’s start with class. Dollar stores may be increasing their share of high-income customers, but they are overwhelmingly concentrated in low income states. The correlation between dollar stores and median income is significant and negative (-.57). The correlation between dollar stores and the poverty rate is .41. They are concentrated in blue-collar working class states (.68).
Dollar stores are concentrated in states with lower levels of education or human capital. The correlation is again significant and negative, even greater than for income (-.77).
The geography of dollar stores also tracks to the country's political divide. Dollar stores are positively correlated with the share of voters who backed McCain (.52) and negatively associated with Obama voters (-.47).
Obesity, smoking and crime also come into the picture. They are positively associated with the percentage of adults whose body mass index is greater than 30 (.72) and the percentage that smoke (.6). Dollar stores states are also positively associated with property crime (.34), especially burglary (.54), and violent crime (.3), especially murder and manslaughter (.49).
The geography of dollar stores also reflects overall living standards and levels of happiness or subjective well-being. Not surprisingly, states with more dollar-stores have lower levels of each (with a correlation of -.32 for living standards and -.56 to happiness).
Religion too plays a role. Dollar stores are positively and significantly associated with the percent of people who say religion plays an important role in their daily life (.71).
The geography of dollar stores follows the same cleavages of income, class and race that are increasingly dividing Americans. Though some affluent shoppers might enjoy searching for bargains in their cluttered aisles, dollar stores are overwhelmingly the retail choice of the economically left behind.
* An earlier version of this article listed Virginia, not West Virginia.