The Impact of Dollar Store Expansion on Local Market Structure and Food Access

This paper studies the expansion of dollar store chains in the U.S. since 2008, which has generated public interest in their impact on retail markets and food accessibility. We show evidence that entry of dollar store chains significantly reduces fresh produce consumption for nearby households with low income and high travel costs. The impact of dollar store entry increases in the number of entries and we find no significant changes in spending in other product categories. These effects are driven in part by the indirect effects of dollar store entry on local market structure. We find that dollar stores expansion has led to a large decline in the number of grocery stores and that this decline in grocery store access causes reductions in produce purchases.