Dollar stores are starting to offer fresh food after years of criticism

By Nathaniel Meyersohn, CNN Business

Dollar store chains are starting to offer fresh groceries at some stores after years of criticism that they don’t provide enough healthy food options for their customers.

Family Dollar has started selling apples, oranges, onions, potatoes, and other fruit and vegetables, and frozen poultry, pork and beef at approximately 100 of its more than 7,000 stores, a company spokesperson said last week.

Dollar General offers produce at more than 1,300 locations, and the chain said last week that it plans to add produce departments to 1,000 additional stores in 2021. It said it sees an opportunity to put them in 10,000 stores in the future.

Dollar General has more than 17,000 stores.

Dollar stores have faced growing scrutiny from local lawmakers and advocacy groups who say the companies contribute to supermarket closures, deter new grocers from opening, and fail to offer a similar healthy food options for customers that can be found at grocery stores. A handful of cities, including Tulsa, Oklahoma City, Birmingham and New Orleans, have passed measures restricting dollar stores’ growth for such reasons.

Chains have good reason to introduce perishable food: there’s demand for it. Family Dollar, which is owned by Dollar Tree, and Dollar General have said they are adding more fresh items to their stores to draw customers in low-income areas where there are limited or no other options to buy fresh groceries.

Adding produce to stores in rural and urban food deserts can “drive a tremendous amount of traffic,” Dollar General CEO Todd Vasos said in 2018.

Produce hasn’t been widespread at these stores in the past because they have business models that rely on keeping down expenses and limiting “shrink” — merchandise lost due to spoilage or other errors. Selling produce is more labor-intensive than stocking stores with shelf-stable foods that don’t go bad.

Produce is “so hard to execute,” said Scott Mushkin, a retail analyst at R5 Capital, an industry research firm.

The new offerings may not be enough to satisfy critics of the chains. Barry Popkin, a professor of nutrition at the UNC Gillings School of Global Public Health who has researched food options at dollar stores and other retailers, said dollar store chains “have been impervious to pushes about their health effects” and the nutritional value of the foods they offer.

Popkin noted that only a small percentage of Dollar General and Family Dollar stores are selling fresh food and the assortment of items they are offering is narrow — no asparagus or spinach, for example.

“You can’t get much healthy in the dollar stores” that don’t offer fresh produce, he said, which is not the case at Walmart, Kroger and other grocery stores.

Family Dollar did not respond to request for comment on its food options. Dollar General said in an emailed statement that at each of its stores, “customers can find the components of a healthy meal,” such as proteins, grains, dairy, and frozen and canned vegetables.