When Retail Zoning Isn’t Enough: Fighting the Backlash Against Discount Retailers

When a new business announces plans to build in a community, it’s typically welcome news. New businesses mean employment, tax revenue, and visitors that can boost economic development in the community and surrounding areas. However, some businesses – although legal and thorough in following every process – carry a stigma. Residents, zoning commissions, and town or city councils are not as enthusiastic as might be expected.

We’ve previously discussed marijuana dispensaries as an example of challenging development. That one might seem obvious. However, another industry facing pushback is discount retailers, or so-called “dollar stores.”

A dollar store opens on average four new locations every day across the United States, according to a report by NPR. There are currently more Dollar Generals than Walmarts, McDonald’s, and CVS stores combined.

Dollar Generals, Dollar Trees and the like are filling empty retail spaces, mostly in rural areas where larger chains won’t invest. They offer a variety of goods at low prices and are located strategically for convenience and quick access. They mean no more boarded up windows or empty parking lots; no more deserted buildings.

Still, as dollar stores sweep across America, they are facing growing scrutiny from opponents. Many local residents – although they love a bargain as much as the next person – are opposed to discount retailers for a variety of reasons. They argue that discount chains stifle competition and limit communities' access to fresh, healthy food. Or they don’t like the look of the buildings, fear that they’ll bring too much traffic, or just want to preserve the look of their small town.

In Louisville, Ky., hundreds of protestors showed up to contest plans to issue liquor licenses to existing dollar stores and to open 20 new ones across the city. Protested complained about an overcrowding of stores selling cheap goods. And they pointed out that one store requesting an alcohol license would share a parking lot with a halfway house for up to 200 recently paroled men.

In Michigan, some small towns are passing zoning moratoriums specific to dollar stores so one can be built only every six months in a county. This may not sound extreme, but consider that this rural county of less than 160,000 residents along I-94 already has 21 such stores.

Even the smallest of towns, such as tiny Scio, Ore., home to fewer than 1,000 people have said no to dollar stores. A year-long debate between local businesses, residents, and a prospective business ended with the zoning commission unanimously turning down the request.


What's the toughest zoning fight you've faced?

View Results

Loading ... Loading ...

While dollar stores sometimes fill a need in cash-strapped communities, a growing number of critics say these stores are not merely a byproduct of economic distress. They’re a cause of it. They claim that dollar stores are triggering the closure of grocery stores, eliminating jobs, and further eroding the prospects of other small business opening in the area.

And these voices are being heard.

Earlier this year, Birmingham, Ala., passed a law that prohibits new dollar stores from opening within a mile of another existing location. Oklahoma City and Tulsa, the two largest cities in Oklahoma, also have similar laws in place, while New Orleans, Cleveland, and Fort Worth, Texas, are all considering the same.

The news for dollar stores isn’t all bad. Dollar General reported $25.6 billion in revenue in 2018, representing a 9% increase year over year. It is one of the most profitable retailers in the rural United States. And many rural communities have welcomed the stores, as they fulfill a need for groceries that otherwise isn’t met. In Cawker City, Kansas, the residents have taken to calling their local Dollar General the “Cawker City Mall,” and say that “It's a place where you go and see your friends, and people from other towns around.”

The counter-argument by discount retailers is that their stores provide a much-needed and affordable food outlet for areas typically without a grocery store. They also provide jobs, tax revenue, and a sense that new businesses are willing to open up in areas that would otherwise be considered blighted or too sparsely populated for investment. And although the economy as a whole remains strong, each year brings a growing number of families living paycheck to paycheck as wages remain stagnant. The lower prices offered by dollar stores offers much-needed relief for shoppers.

The lesson is: Know the climate where you are looking, and prepare to wait accordingly.

A two-page fact sheet produced by the Institute for Local Self-Reliance outlines arguments that detractors can use in front of zoning boards and other decision makers. Understanding the arguments against discount retailers can help you do your homework and be prepared to meet obstacles.

Whether you are planning to open a Dollar General or a business that provides check cashing, legal marijuana sales, a pawn shop or something similar, it is important to know local zoning laws and follow them closely. Otherwise, you risk delays and bad feelings with your potential customers.

There are three main obstacles to obtaining the legal permissions from a permit standpoint:

  • Zoning for commercial use, which can take up to a year through standard practices.
  • Zoning for villages, which often has to go through higher authorities.
  • Building permits needing exterior Architectural Review Board approval for any appearance or signage changes. Be prepared to construct or rebuild some on the exterior to match local architecture style.

With experience in all 48 continental U.S. states, Express Permits has the knowledge and expertise to help you through this process, whatever type of business you’re planning. Learn more about the variety of services we offer or contact us for more information.

Share this Post