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Viewpoints: The impact of Dollar General  stores on the community

  • A Dollar General in Henniker. Caitlin Andrews

For the Ledger-Transcript
Published: 9/17/2019 8:42:13 AM

There’s a lot currently being developed on Wilton Road in Milford, just near the town line and near the intersection with 101. A new Dollar General is being built, one of the 975 new planned franchises by the Tennessee corporation in 2019 which would increase the number of open stores in our state; currently around 37 locations – 15.8 percent of all towns & municipalities.

Dollar General is one of the few box chain stores that continues to show economic growth, 29 consecutive years to be precise. They have managed to keep costs low using a number of techniques which allow them to offer products at prices 20 to 40 percent lower than competitors. Focusing on rural rather than urban locations, keeping signage and internal infrastructure at a minimum (bare wire shelves) renting not owning spaces, and carrying a smaller selection of brands.

Another cost-saving measure used by the chain is minimizing labor costs. Minimal staff keeps individual store costs down, but less emphasized is the rate of pay. A quick search lists associate jobs between $7.98 and $8.99 per hour, and assistant managers between $10.80 and $11.24 per hour. There’s a distinct jump in pay at the management level, with individual store managers earning roughly $40,000 annually and district managers around $70,000.

In contrast, Todd J. Vasos, CEO of Dollar General reported $10.6 million in earnings for fiscal year 2018, 638,767% more than the lower-paid or entry-level sales associates. Vice Executive positions for the corporation reported annual incomes around $2.5 million each.

The cost to own and maintain a franchise range is somewhere between $20,000 and $350,00 depending on how much the store owner chooses to invest. The contracts typically lock in at 10-year terms and can be much more expensive to maintain than other dollar store chains by comparison. 

The money paid out to own and operate the franchise then leaves the community, state, and broader New England region ultimately destined to be either reinvested or paid to out of state workers and locations who would not be paying taxes.

In contrast to founder Cal Turner, who suggested the intent of the store was to fill a gap in availability of necessities for poorer families in emergencies or moments of need after having helped his father liquidate general stores in the 20’s & 30’s; Vasos is far more transparent about Dollar General’s role in the current economy.

“The economy is continuing to create more of our core customer,” Vasos stated in a 2017 feature with WSJ “We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic,” he said, “and it has now turned to being our demographic.”

What Vasos leaves unaddressed is the role Dollar General plays as an economic force in creating the customer base it’s come to depend on. By ensuring as few job opportunities as possible through a minimization of staff, the amount of job opportunities may only minimally impact employment rates, and what jobs are created pay (at least in NH) less than half the earnings needed to cover housing costs in the state working at full time.

Employees are essentially forced into becoming the exact customer base for which Dollar General exists, and the more stores that are opened will serve to maintain the status quo of paying wages that an individual cannot live on.

This perpetuates the vicious cycle of poverty and wealthy corporate executives squeezing more blood from the stone of the lower and middle classes. This occurs not just with individual workers, but local businesses that struggle to compete with Dollar General’s prices and reduces the availability of fresh foods.

Furthermore, Dollar General reports political donations from company associates totaling to $353,948 from 1990 to 2020, with 24 percent being donated to Democrats and 75 percent donated to Republicans. A view of the data shows that while nearly twice the amount invested in conservative candidates has been donated to their democratic counterparts during the 2020 cycle, the 2018 election cycle saw Democrats receiving just over half of what was donated to Republicans and that during the 2016 over double the amount of money given to conservatives was donated to liberal candidates. There are four current US Congressmen who own shares in Dollar General, none are from New Hampshire or even New England.

The trend suggests that Dollar General and those who earn enough within the company to make meaningful political contributions lay their loyalty with that of the national corporate interests. The very first page of the Corporate Governance Guidelines clearly states “The basic role of the Board is to protect shareholder interests by understanding and overseeing our long-term, central strategies.”

While the Board of Directors & Executives in Tennessee concern themselves with the interests of their shareholders, back in our northern communities property values surrounding new Dollar General locations plummet.

In a state like New Hampshire, with no supplemental relief to income taxes currently, the impoverished towns specifically targeted by Dollar General will have to further raise tax rates to pull in the same amount of revenue to meet education goals that continue to leave schools without full funding.

Our tax rates continue to go up and wages remain relatively stagnant, in the face of what metropolitan economic publications would report about a booming economy; as the average worker’s compensation has not increased in any way that would salve working class economic anxieties.

While Dollar General touts their philanthropic efforts; “Dollar General puts much of its giving into the Dollar General Literacy Foundation, a nearly 25-year-old program aimed at helping employees and customers within 20 miles of its stores tackle education and literacy issues,” their donations do not offset the economic hardship and tax losses that result from their insistence on keeping labor costs low.

The idea that somehow the solution to the economic struggles of our rural communities is to introduce more clones of a business that is fundamentally structured around homogenized commerce and the extensive subversion of labor in the name of profits – most of which leave our state – is confounding.

In towns that so frequently talk up their small business, perhaps the members of the communities should urge land and commercial property owners to consider the comparative benefits (in value, not cost) of non-franchise local options, while ceasing to give the Dollar General another dime.

Carter Hammond is the producer for Forager NH, Locally Sourced.


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