WILFORD: Banning Dollar Stores Is No Solution To Food Deserts

Andrew Wilford National Taxpayers' Union Foundation
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Access to healthy food is a real problem in America. Roughly 39 million Americans live in a “food desert” — defined as an area with limited access to a grocery store, which usually occurs in low-income areas. Unfortunately, some towns and cities are aiming to solve this problem by limiting access to dollar stores.

The number of dollar stores has increased by around 50 percent since 2001, with 10,000 new locations having popped up in that time frame. But the increase in consumer demand for such stores has been met with skepticism on the part of local bureaucrats.

On the one hand, they can provide access to some food staples in otherwise underserved communities, while providing competition to lower prices at grocery stores. But on the other, some allege that they’re crowding out access to traditional grocery stores. Dollar stores aren’t grocery stores — while they tend to offer frozen, packaged and processed foods, they rarely provide fresh fruit or vegetables.

Dollar stores don’t claim to be replacements for grocery stores, but some city officials have begun to fear that without access to nutritious options, Americans living in food deserts could be kept in vicious cycles of poor health and poverty.

That fear has led to a familiar response from some local officials: using the power of government in an attempt to “fix” a deeper societal challenge. To address the issue, some cities have begun to target clusters of dollar stores, using zoning restrictions to limit the number permitted within a given area.

Restrictive zoning has almost never been an effective solution to anything, and this is no exception. Zoning out dollar stores will not magically create access to nutritious food options — it will only artificially constrain competition. Food deserts existed long before the rise of dollar stores, and they’re likely to remain a challenge even in the face of governmental meddling.

After all, grocery outlets have already been hard at work developing ways to reach customers without easy physical access to a local grocery store. Most major chains offer some form of grocery delivery, as do some independent companies such as Postmates, whic allows customers in food deserts (particularly urban ones) to access groceries without needing to travel.

Other, more innovative solutions are growing in popularity as well. Companies such as Blue Apron and HelloFresh offer meal kit delivery with the exact ingredients to make pre-selected meals.

Those services aren’t a solution to food insecurity as it is — meal kits can be expensive, and grocery delivery is generally more expensive for low-dollar deliveries, a problem for Americans working paycheck to paycheck. But they are examples of how technology and entrepreneurship are working to make nutritious food more accessible over time, especially as systems improve and costs come down.

Using restrictive zoning could also threaten the development of this innovation. The competition that dollar stores provide in underserved areas is one reason why grocery chains have had to work to develop ways to help Americans in food deserts to access their products. Barring dollar stores in certain areas may reduce the incentive of competitors to continue to improve grocery delivery services.

City officials aren’t wrong to be worried about the presence of food deserts — the goal of access to healthy and nutritious food at modest prices is a worthy one. But reducing options for American consumers should not be on the table as a way to solve the problem.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.