From UF/IFAS
In Summary:
A new study from UF/IFAS food economists reveals that dollar stores can reduce food access in a subset of urban neighborhoods, particularly those that begin with only one grocery store. Using machine learning and neighborhood-level data from 2006–2020, researchers found that 14% of these areas experienced measurable declines in food access after a dollar store opened, with impacts intensifying as more stores appear. The findings suggest that while effects are limited overall, policymakers should consider more nuanced approaches when evaluating or regulating dollar-store expansion.
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A new study from University of Florida food economists has found that building dollar stores may create food deserts in specific city environments, while having no impact on grocery access in other areas.
Related: Capitalism, dollar stores, and the role of the Apopka City Council.
The study, authored by UF Institute of Food and Agricultural Sciences (UF/IFAS) Food and Resource Economics Department experts and published in the American Journal of Agricultural Economics, focused on one central question: When a dollar store opens in an area, does it ultimately decrease food access?
Two customers buying produce in a grocery store. UF/IFAS Photo by Tyler Jones.
The answer is that in some, limited cases, it does.
The opening of a dollar store is more likely to reduce food access in urban neighborhoods that initially only have a single grocery store. Urban areas with larger Black populations, limited vehicle access, high reliance on public transportation, high dependence on public assistance, or high poverty rates are more likely to have less food access after a dollar store opens, said Conner Mullally, a study author and UF/IFAS associate professor in the food and resource economics department.
In 2021, the Apopka City Council passed a limited moratorium on future dollar stores.
Dollar stores grew in number throughout the 2000s, prompting numerous municipalities to restrict their growth through policies – many of which cited concerns for reduced food access as an impetus. Federal programs followed the USDA’s definition of a “food desert,” with economists left wondering whether policy concerns about dollar stores were grounded in science, prompting this study, Mullally said.
Using machine learning and neighborhood-level data from 2006 to 2020, the research team included data on variables such as demographics, location, and retail availability.
They found that in 14% of urban census block groups with only one grocery store already, opening a dollar store led to a measurable decline in food access, said Chuck Grigsby-Calage, a study author who was a Ph.D. student at UF while working on this research. He is now an assistant professor of agricultural economics at the University of Tennessee at Martin.
A depiction of the different packaging and processing of fresh fruit now available in US grocery stores. UF/IAFS photo: Thomas Wright
UF/IFAS Photographer
Rural areas also see impacts, Mullally said, but fewer than in urban areas. But unlike urban areas, there wasn’t a trend across demographics.
“On average, the effects are small overall in most urban and rural areas, but in urban communities with just one grocery store in the first year of our data set, the impacts are quite large,” he said. “In fact, the impact grows with every dollar store that opens in a given neighborhood.”
“The concerns motivating the limit of dollar stores are real in certain circumstances, but there is more work to be done to understand this effect, as well as other aspects of dollar stores, such as whether they can improve food access in certain circumstances, or whether they improve overall consumer well-being despite having some negative impacts on grocery stores,” he said.
He said the results are complex and vary by neighborhood, so any policy response would need to be similarly nuanced. The goal of this study is to provide policymakers with more comprehensive insights into the consequences of dollar-store expansion and the impact of restrictive policies.
Key Points:
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UF/IFAS economists examined whether opening dollar stores decreases local food access using 14 years of neighborhood data.
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In 14% of urban areas with just one existing grocery store, food access measurably declined after a dollar store opened.
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The negative effects were more common in neighborhoods with larger Black populations, higher poverty, greater public transit reliance, and limited vehicle access.
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Rural areas saw fewer impacts, and no clear demographic pattern emerged.
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Researchers conclude that policy responses should be targeted and nuanced, as dollar-store effects vary significantly by neighborhood.
ABOUT UF/IFAS
The mission of the University of Florida Institute of Food and Agricultural Sciences (UF/IFAS) is to develop knowledge relevant to agricultural, human, and natural resources and to make that knowledge available to sustain and enhance the quality of human life. With more than a dozen research facilities, 67 county Extension offices, and award-winning students and faculty in the UF College of Agricultural and Life Sciences, UF/IFAS brings science-based solutions to the state’s agricultural and natural resources industries and all Florida residents.
For more information, go to ifas.ufl.edu.
