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Economy

Does Dollar General Cause Food Deserts?

Source: https://www.reveliolabs.com/news/business/does-dollar-general-cause-food-deserts/

Dollar General has been accused of causing food deserts in low-income areas. While there is an abundance of anecdotal evidence on this, there has been little empirical evidence. By tracking Dollar General employees and comparing them to traditional grocery store employees, we are able to better understand the relationship between Dollar General and food deserts.

Although both Dollar General and traditional grocery stores have been growing steadily, in recent years, Dollar General has grown at a faster rate:

Given the increasing market share of Dollar General, we measure the availability of grocery stores by looking at the ratio of grocery employees to non-grocery employees. If Dollar General is driving grocery stores out of business, we would see lower grocery store employee ratios in places with a higher percentage of Dollar General employees.

In the plot below we see a negative relationship between these two quantities, suggesting that Dollar General stores contribute to the decrease in groceries and the formation of food deserts.

Further, the figure below is a list of MSAs that have the highest ratio of Dollar General employees to grocery store employees, representing the worst cases of food deserts that are being driven by Dollar General stores.

Takeaways:

  • Growth of Dollar General stores have accelerated in the past few years relative to the growth of traditional grocery stores.
  • For MSAs with the highest Dollar General presence, the increasing growth of Dollar General coincides with a decreasing grocery store availability.
  • The MSAs with the highest Dollar General to traditional grocery workforce include: Pine Bluff, AR, Pascagoula, MS, and Dothan, AL.

To learn more about the data behind this article and what Revelio Labs has to offer, visit https://www.reveliolabs.com/.

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Data is changing the speed of business. Investors, Corporations, and Governments are buying new, differentiated data to gain visibility make better decisions. Don't fall behind. Let us help.

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Consumer Edge Research

Consumer Edge Insight offers exclusive street-ready big-data products engineered for alpha generation by Data Science Teams & Portfolio Managers alike. CEI offers a number of alternative data products including CE Transact, our leading U.S. credit/debit card insight product (15M cards). CE Transact products provide aggregated revenue signal, deep fundamental cohort analysis and/or granular transaction-level data feeds with unparalleled metadata. Advantages: shortened latency (T+4), better panel representativeness (9M+ daily panel), and metadata integration such as demographics (at cardholder level). All data is cleaned with CEs Advanced Tagging System.