Dollar General is expanding its footprint in Ohio, putting pressure on local retailers
The state of Ohio remains mired in a legal fight with Dollar General over accusations of deceptive pricing.
The Tennessee-based dollar store chain has been steadily expanding in Ohio in recent years, and that's taken a toll on mom-and-pop retailers across the state.
Jim Luscaleet got his start in the grocery business at age 14 and, in 1984, bought a store of his own in Richwood, Ohio, a town of about 2,300 people about halfway between Columbus and Lima.
He renamed it Richwood Cardinal, and took pride in the service he provided his customers. "There was nothing that I wouldn't get if somebody asked for it, if it was available for me to get," Luscaleet said.
His store not only offered fresh meat and produce, but also a foot in the door for countless young people in the community. “We became in Richwood the place for students to work," he said.
For years, Richwood Cardinal thrived. But then, around 2010, not one but two dollar stores opened on the same street. Dollar General opened right next door.
"They're very good at what they do. They want to touch the parking lot of a supermarket. That was their intent, and their intent was to put me out of business.”
They succeeded. After 31 years in business, Richwood Cardinal closed its doors in 2014. “That was the hardest decision I've ever made in my life," Luscaleet said.
It's a story that has played out across Ohio many times in the last two decades. In 2004, Dollar General had 355 stores in the state. By last February, the number almost tripled to nearly 1,000 stores.
Last month, the company opened its 19,000th store nationwide in Joplin, Missouri.
Chris Merrett is director of the Illinois Institute for Rural Affairs at Western Illinois University. He and his colleagues authored a 2019 report taking a closer look at Dollar General's business model.
Dollar Generals often open in low-income areas. That’s a double-edged sword for those communities. On one hand, Dollar Generals offer access to groceries where people don’t have many other options.
On the other, Merrett explained, food is often more expensive, as the stores sell name-brand goods in smaller containers. “You're not getting as much, mind you, but you're buying them in more affordable portions," Merrett said.
There's no question that Dollar General's business model—with its small stores located largely on rural parcels away from downtown areas—has driven some mom-and-pop stores out of business, Merrett said, but for rural communities that lack a retail outlet of any kind, the arrival of a new Dollar General can be a welcome sight.
“Fresh pavement, a bright yellow sign, a new building, a few new jobs, maybe some property taxes. So there are places where the Dollar General store, I think, is welcomed," Merrett said.
Kathy Basiger has lived in Richwood for over 30 years and often shops at Dollar General. “When you need something—thank goodness—they have vegetables and fruit and everything you need when you're looking for what you need. So yeah, I come here a lot," she said.
As it has grown, the company has come under new scrutiny.
The U.S. Department of Labor recently cited Dollar General with more than $1.6 million in penalties for unsafe working conditions at some of its stores.
And in November, Ohio Attorney General Dave Yost filed a lawsuit after receiving numerous complaints from Dollar General customers who say they were charged more for goods than what was advertised on the shelf. “Sometimes they don't even give you a receipt. I think that maybe they hope that nobody will notice, but if you do notice and ask for a refund, they won't give it to you," Yost said.
Dollar General did not respond to WOSU's requests for an interview for this story.
Merrett said the company's model isn't anything new, but rather another manifestation of broader technological change and globalization. "Whether it's Walmart coming 30 or 40 years ago, it's Dollar General now, it's online sales, you know, I don't think small towns can just focus on Dollar General. I think small towns have to be concerned about all kinds of ways that external forces are affecting the health of their Main Street economies," Merrett said.
Dollar General wasn’t the first to disrupt small town economies, and residents like Jim Luscaleet know it won’t be the last. "In 30 years, there won't be a Dollar General. There'll be somebody else there ... and good for whoever takes them out of business," he said.