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Editorial: Dollar stores deserve scrutiny, not targeting

As proposed city ordinances go, one written to target a legal retail business that dares to “continuously offer or advertise a majority of the items in their inventory for sale at a price less than $5.00 per item,” with specific carveouts for gas stations, drugstores, thrift stores and a whole variety of other similarly legal businesses, sure seemed like an invitation for a lawsuit.

By that logic, if the small-box dollar stores merely raised their prices, they could get around the attempts of Ald. Matt O’Shea, 19th, to stifle their growth in Chicago. That would hardly serve Chicagoans in any ward, especially those where some of those exempted gas stations and other entities routinely gouge customers with much higher prices for food and household staples like cleansers, diapers and kids’ toys.

Dollar stores tend not to be beloved, but they are ubiquitous because they are popular: They offer low-cost goods, often the same goods offered at higher prices elsewhere. And they let shoppers get in and out fast. More importantly, their low-cost structure means they make a go of it in areas that have not supported larger retail operations. And, over the years, some dollar stores have improved their offerings of dairy products and even fresh fruit and vegetables, again at lower prices than elsewhere.

That’s the good news. The bad news is that the owners of dollar stores can use those thin margins as an excuse not to keep up their buildings, and distant management often has been slow to fix legitimate issues like overflowing trash, poor lighting and broken-down facades. But it’s not like local owners are always better.

We support holding these businesses accountable to their communities when it comes to environmental regulations and all other city rules applied to retail operations. They should be good neighbors like any other business, should not discriminate socioeconomically when it comes to keeping up their stores and Chicagoans who’d rather take their business to locally owned operations should, of course, remain free to do so. But if shoppers didn’t like these places, they would not walk through their doors; little benefit will flow from a slew of newly abandoned strip malls because the city does not want any more low-price stores to open.

O’Shea’s proposal would prohibit new dollar stores from locating within a mile of one owned by the same company. Exceptions would be available for those outlets dedicating at least 10% of their space to fresh food.

We think O’Shea’s ordinance, which was to come up for a City Council vote Wednesday before being pulled, is an overreach that could make the well-documented problem of food deserts even worse. One mile is an unreasonably restrictive distance in a city that encompasses 234 square miles. We’d also note that dollar stores sometimes anchor retail projects that help the local businesses next door and that force competitors to lower their own prices. And it hardly needs restating that this addition of costly regulations on doing business in Chicago hardly is an incentive for new investment anywhere.

That said, we like O’Shea’s emphasis on holding dollar store management accountable and its encouragement of the provision of fresh fruits and vegetables inside the stores. That puts us very much in sync with the compromise suggested Monday by the Illinois Hispanic Chamber of Commerce, the Illinois Retail Merchants Association and the Chicagoland Chamber of Commerce. They propose subjecting new dollar stores within 1,000 feet of another such store to a special-use permit that necessitates the support of the local alderman.

At some times and in some places, the arrival of a new dollar store might well come with economic benefits that outweigh any negatives. That should remain a possibility.

Meanwhile, dollar store management and ownership should take this flap as an opportunity to spruce up their Chicago stores and offer as broad a variety of food as the market will bear.

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