Dollar General: the price is too steep

George Billard
Posted 8/21/12

On January 8, the Town of Highland Zoning Board of Appeals will hear from the community whether or not to grant a variance for a proposed Dollar General (DG) store in Eldred. Allowing the building to …

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Dollar General: the price is too steep

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On January 8, the Town of Highland Zoning Board of Appeals will hear from the community whether or not to grant a variance for a proposed Dollar General (DG) store in Eldred. Allowing the building to proceed will fundamentally alter the character of the town. In an effort to save a few pennies on groceries, the community will be paying too steep a price.

In terms of purchasing power, we truly are a small town. The marketplace is not big, and we’ve seen a number of stores and restaurants struggle to find a client base, especially in uncertain economic times. Peck’s Market has been the only game in town for some time. Naturally, people resent a store that consistently takes a chunk of their paycheck. People want competition. It’s good for the market. But this is not a level playing field. Local businesses can never meet DG’s economy of scale.

DG is a publicly traded corporation whose revenues for 2014 totaled $17.5 billion. They answer only to stockholders, with zero stakes in the community. Their business model is to target lower-income areas, minimally staff the store, and out-price area businesses. By nature they are predatory.

This will not be a job creation bonanza. DG meets its margins by keeping labor rolls to the bare minimum and has a troubled history with regard to labor relations—in particular with regard to overtime. Last November, an employee lawsuit alleging violations of the Fair Standards Labor Act related to failure to properly pay overtime to managers was settled, and over 2,700 claims were paid out. It should also be noted that since 2009, in over 50% of OSHA inspections at DG stores, the company has been cited for workplace safety violations.

DG is currently in merger talks with Family Dollar. In order to avoid federal antitrust laws, DG will have to shed, at a minimum, 1,500 stores, and according to some regulators, up to 4,000. Just because the store is newly built does not mean it couldn’t end up shuttered. The merger is what matters. This is called divestiture by the investment community. At the local level, it’s an empty building.

The best economic engine for the community has always been locally owned businesses. The money that is spent here stays here. So, what are we gaining? Competition? With over 11,500 stores in the U.S., DG is a behemoth. With purchasing power of that magnitude, they can set prices that local stores cannot match. Can Peck’s, an employee-owned operation, continue if people shop there only for produce? The demographics simply don’t support two stores of that size, and only one of them has pockets deep enough to ride it out. The local population is too small to suggest a new customer base will compensate for lost sales. One way or another, we will soon be looking at a large empty building in the center of town.

The zoning laws are there for a reason. They prevent oversized buildings. DG seeks an exemption to the existing standard. To get a sense of DG’s aesthetic, one need only travel 13.6 miles to visit their new store in White Lake. A DG does not raise our property values, but instead sends a clear message that Highland is a low-income area.

Eldred is a charming small town. A box retail store will stand out in our landscape, and it will set a commercial development precedent that will be impossible to turn back. It will savage area convenience stores and imperil the local grocer. We don’t stand to gain enough in job creation and tax revenue to justify a wholesale shift in the direction of the town. We all want growth, but in this case the price at DG is way too high.

[George Billard is a resident of the Town of Highland,NY.]

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