Is Dollar General a Parasite?

Not when they're the only ones willing to show up.

I heard a speaker at a conference recently refer to Dollar General as a parasite on small towns. I’ve worked in rural north-central Oklahoma long enough to know plenty of towns where Dollar General is the only place residents have to buy food. Calling that a parasite tells me the person saying it has never been responsible for a truly small town. I got up, gathered my stuff, and walked out.

Where the “Parasite” Label Comes From

I understand where the framing comes from. In 2023, the Institute for Local Self-Reliance — a nonprofit that explicitly advocates against corporate chains and in favor of local alternatives — published a report called “The Dollar Store Invasion.” It was picked up by NPR, the New York Times, NBC Nightly News, and USA Today. A Wendover Productions documentary on YouTube drew heavily from it and racked up millions of views. The word “parasite” started showing up at conferences.

Here’s the thing about this ILSR report: some of what’s in it is real. The USDA later confirmed independently that dollar stores do measurable harm to rural grocery stores. Those findings hold up.

But the report’s most inflammatory claim — that Dollar General deliberately locates next to existing grocery stores to destroy them — cites as its source ILSR’s own previous report from 2018. Not an independent study. Not peer-reviewed research. Themselves.

And the figure you’ll see repeated everywhere, that grocery stores lose 15 to 30 percent of their sales when a Dollar General moves in? Same source. The actual independent USDA study found 9.2 percent — real and significant, but less than a third of what ILSR claimed, with no evidence of deliberate targeting.

What makes this more striking is something buried in ILSR’s own companion document to the report. In it, they write that dollar store chains “simply choose locations with cheap space and significant concentrations of low- and moderate-income residents.” Not grocery stores. Not vulnerable neighborhoods to exploit. Cheap space near their customer base. That’s a very different thing than predatory targeting, and ILSR said it themselves.

The report also leans heavily on peer-reviewed research from the University of Georgia showing that dollar stores concentrate in low-income minority neighborhoods and frames that concentration as predatory. But concentration isn’t predation when you’re the only retailer showing up. The residents in those neighborhoods tend to see it differently. As one woman in York, Alabama — a town of 2,400 with no grocery store — told NPR: dollar stores are “the bread and butter of small towns.”

Meanwhile, independent researchers have been considerably more careful. Dr. Lauren Chenarides, an assistant professor at Arizona State University’s Morrison School of Agribusiness, noted in 2023 that academic studies on the economic consequences of dollar store expansion “are just starting” and that major papers are still years away.

Her own research found that dollar stores often open in areas that have just become food deserts — after the grocer already left — and that they are less likely to close stores inside food deserts than outside of one, suggesting they can survive where grocers can’t. That’s not the profile of a predator. That’s the profile of a last resort.

This matters because the ILSR report is now the invisible foundation under almost every “dollar stores are parasites” argument you’ll hear. When that argument reaches a conference keynote, nobody mentions that its most dramatic claims are self-cited advocacy research. They just repeat the conclusion.

And here’s what the full picture actually looks like: the harm is real in some situations and absent in others. When dollar stores enter a town that still has a functioning grocery store, there’s documented harm. When they enter a town where no grocery store exists, which describes a lot of the towns I work in, the picture is completely different. That distinction matters enormously. And it’s the one the “parasite” argument almost never makes.

What Dollar General Actually Is

If you’re sitting on a two-lane state highway with 300 people and no grocery store, Dollar General is the modern version of the general store that used to exist in every small town in America. It’s a five-and-dime. It sells canned goods, cleaning supplies, paper products, over-the-counter medicine, and basic household items at prices competitive with Walmart because, like Walmart, Dollar General has the purchasing power to keep prices low. A small regional grocery store doesn’t have that purchasing power.

Here’s the economic reality: Dollar General can be profitable in a market that would bankrupt a grocery store. Their model is built for it. Small footprint, minimal staff, no expensive meat and produce infrastructure, focused almost entirely on shelf-stable goods. A grocery store needs fresh food departments to be a grocery store, and those departments cost money to run and carry spoilage risk. Dollar General sidesteps all of that, which is exactly why they can make money in a town where a grocery store can’t.

And crucially: in most of these towns, Dollar General didn’t replace a grocery store. The grocery store was already gone. Dollar General didn’t kill it. It just showed up after the funeral.

For residents without cars or the elderly who can’t drive, this isn’t an abstraction. It’s whether they can get canned goods, soap, and cold medicine without asking someone for a ride to the nearest town thirty minutes away. Calling that a parasite is a statement that could only be made by someone who has never needed one.

Increasingly, individual locations are adding fresh produce. Dollar General now has more produce distribution points than any other mass retailer in the country, including Walmart. It’s not the same as a grocery store. But it’s something. And in a lot of towns, something is everything.

And for many of these towns, Dollar General isn’t just the only place to buy groceries. It’s the largest single source of municipal revenue. Oklahoma municipalities run almost entirely on sales tax; they collect no property tax. In a small town on a state highway, Dollar General is often generating more sales tax than every other business in town combined. The calculus is different in other states, but in towns with low property values and a thin commercial base, Dollar General’s sales tax contribution is significant regardless of which state it’s in.

Where Dollar General Goes Wrong

None of this means Dollar General is above criticism. It isn’t.

When Dollar General moves into a town that still has a functioning independent grocery store, there’s documented harm. A 2024 USDA study found that rural independent grocers see about a 9% decline in sales when a dollar store enters their market, nearly double the impact seen in urban areas. Rural grocery stores are three times more likely to close following a Dollar General opening than their urban counterparts. And unlike urban markets, where the effects tend to fade after a few years, in rural areas they don’t. That’s real, and it matters.

The pricing scandal is real too. Multiple state attorneys general have investigated and sued Dollar General for charging customers more at the register than the price shown on the shelf. A Missouri investigation found that 92 out of 147 stores failed pricing inspections, with an average overcharge of $2.71 per item. A national class action lawsuit settled for $15 million, with preliminary approval granted in December 2025.

Dollar General has since committed to third-party pricing audits and dedicated pricing employees. But the pattern was widespread and went on for years, and the people with the least ability to do anything about a small overcharge are exactly the low-income rural residents who can least afford it. If your only option is Dollar General, disputing a $2.71 discrepancy doesn’t get you very far.

But here's the thing: none of that changes the fundamental reality in the towns I'm talking about. The pricing scandal is real and wrong. The harm to existing grocers is real. But documented problems with a company don't conjure a grocery store into existence in a town that doesn't have one. In a town where Dollar General is the only place to buy food, too often the alternative to Dollar General isn't a better option — it's nothing.

So What Do We Do About It?

First, let’s stop treating Dollar General as the villain in a story where the real problem is that small towns can’t support full-service grocery stores. That’s a harder problem, and it doesn’t have a corporate punching bag attached to it. But it’s the actual problem.

Second, there are communities already working on solutions worth paying attention to. Medford, Oklahoma — a town of about 900 people — faced losing its only grocery store, and the city stepped in to buy it and keep it running. It’s not a perfect model, and I don’t know how easily it replicates. But it’s a community that decided food access was worth a public investment and found a way to make it work.

In Cody, Nebraska — population 156 — teachers and students at Cody-Kilgore High School built their own grocery store from straw bales after the town’s previous store closed. Students run it as part of their curriculum. It opened in 2013 and is still operating today. If you’re looking for a way to get young people invested in their community, it’s hard to beat handing them an actual business to run.

The more interesting idea to me — and one I’m actually working on — is the tandem model. Dollar General handles what it handles well: shelf-stable goods, household products, basic consumables, at prices small towns can’t otherwise access. A separate, smaller operation fills the gap Dollar General leaves — fresh produce, meat, dairy, and locally made products. Not competing with Dollar General. Complementing it.

I’m personally involved in an exploratory project doing exactly this in a small Oklahoma town, in partnership with Zero Empty Spaces, a national company that typically creates affordable artist studios by activating vacant commercial spaces. The rural grocery market concept is new territory for them too. It’s early in the ideation phase and there’s no launch date yet, but the fact that it’s being seriously explored tells me the idea has legs.

Nobody has cracked this nut completely. There’s no playbook. But the towns that figure this out will be the ones that take their food destiny into their own hands instead of waiting for a regional grocery store to save them.

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Sources

1. USDA Economic Research Service, “Dollar Store Entry Affects Rural Grocery Stores More Than Urban,” May 2024. https://www.ers.usda.gov/amber-waves/2024/may/dollar-store-entry-affects-rural-grocery-stores-more-than-urban

2. Dollar General class action settlement, preliminary approval December 15, 2025. https://www.classaction.org/news/15m-dollar-general-settlement-ends-class-action-lawsuit-over-alleged-price-discrepancies

3. Dollar General press release via BusinessWire, “Dollar General Surpasses Milestone of 5,000 Stores Nationwide Offering Fresh Produce,” January 30, 2024. https://www.businesswire.com/news/home/20240130572693/en/Dollar-General-Surpasses-Milestone-of-5000-Stores-Nationwide-Offering-Fresh-Produce

4. Pew Charitable Trusts, “How Local Governments Raise Their Tax Dollars,” 2021. https://www.pew.org/en/research-and-analysis/data-visualizations/2021/how-local-governments-raise-their-tax-dollars

5. Nebraska Public Media, “The Circle C in Tiny Cody Calls Itself ‘More Than a Store,’ and Here’s Why,” December 2016. https://nebraskapublicmedia.org/en/news/news-articles/the-circle-c-in-tiny-cody-calls-itself-more-than-a-store-and-heres-why/

6. Government Capital Corporation, “City of Medford Announces Equipment Upgrade for City Owned Grocery Store,” March 2022. https://www.govcap.com/city-of-medford-announces-equipment-upgrade-for-city-owned-grocery-store

7. Institute for Local Self-Reliance, “The Dollar Store Invasion,” March 2023. https://ilsr.org/articles/report-dollar-store-invasion/

8. Institute for Local Self-Reliance, “17 Problems: How Dollar Store Chains Hurt Communities.” https://ilsr.org/article/independent-business/17-problems/

9. Gulf States Newsroom / WBHM, “Advocates warn of a ‘dollar store invasion.’ Researchers are still figuring out the consequences,” April 2023. https://wbhm.org/2023/advocates-warn-of-a-dollar-store-invasion-researchers-are-still-figuring-out-the-consequences/ (source for Dr. Lauren Chenarides quotes and April Russell quote)

10. NPR, “As more dollar stores open, advocates warn of the harm they can do to communities,” May 2023. https://www.npr.org/2023/05/02/1173477651/as-more-dollar-stores-open-advocates-warn-of-the-harm-they-can-do-to-communities