Tuesday, May 30, 2023

Wilmington could stop dollar stores from entering food deserts

dollar general
Neighbors of a Dollar General on Pine Grove Drive were opposed to the store coming in. (Port City Daily photo/Alexandria Sands)

WILMINGTON – In a preliminary draft, the City of Wilmington has proposed zoning use regulations that would ban discount variety stores, like Dollar General and Family Dollar, from its food deserts.

The move would follow the lead of large cities, such as Kansas City, New Orleans and Tulsa, which have tightened zoning rules to limit small-box stores in hopes a full-service grocer may move in instead.

Related: Organizers want to bring a grocery co-op to Wilmington’s food desert. But first, the community has to get behind it.

Dollar General has gained a reputation for capitalizing off low-income customers in rural and impoverished areas. CEO Todd Vasos, a Wilmington native and Hoggard High School alumnus, told The Wall Street Journal the economy is creating more of the chain’s core customers: the type of person who “uses the last bit of ketchup at the table the night prior,” then picks one up on the way home from work.

Research from the Institute for Local Self-Reliance (ILSR) and other growing evidence suggests full-service grocery stores shy away from opening near Dollar Generals and similar establishments. In the past, sales at grocery stores dropped by about 30% after a nearby Dollar General opened.

Dollar General did not respond to comment on this story by press time.

A company spokesperson for Dollar Tree, which also owns Family Dollar, said its stores alleviate the detriments of food deserts by offering affordably priced products in underserved urban communities.

“Dollar Tree and Family Dollar complement and operate side by side with grocery stores and bring economic development to every community we enter,” spokesperson Kayleigh Painter said.

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Recommended regulations

The City of Wilmington’s recommendation to prohibit discount variety stores in food deserts is just one of countless changes the staff is eyeing as it works to rewrite its 30-year-old Land Development Code (LDC).

The LDC is a document that sets guidelines for how land may be developed within Wilmington. In a draft of the new code, the city has incorporated a new section on discount variety stores, defined as a retail use with a limited assortment of goods, the majority of which are priced under $10.

The preliminary text for the retail use standards was released in March and is currently undergoing a public feedback period. The city plans on releasing a completed first draft in its entirety on April 1.

Using public input and suggestions from the city council and planning commission, the city will then pen a second draft and hold public hearings on the proposed regulations during city meetings before the council takes action on an effective date.

Related: ‘It’s the DNA of our city’: Wilmington ready to rewrite Land Development Code

The proposed text suggests the purpose for the conditions is to “better regulate the total number and proximity of discount variety stores to assure the best possible opportunity to provide fresh fruits and vegetables to the community,” among other reasons. City staff hopes grocers will be more willing to move into food deserts if there’s not a Dollar General or Family Dollar posing competition.

Most often, discount variety stores’ stocks are limited to canned fruits and vegetables and processed meats. In recent years, Dollar General has expanded select stores to carry essentials like milk, eggs, and other go-to items traditionally found in grocery stores.

“No one’s in a position to force a retailer of any sort to move into any location so all we can do is try to make it an attractive option,” Christine Hughes, senior planner with the city, said. “Our thought is if we keep the door open to the ability to provide fresh food, access to fresh produce, nutritional food options . . . that’s one of the best things we can do.” 

The U.S. Department of Agriculture defines a food desert as a low-income tract with limited access to a supermarket or large grocery store. According to a USDA map, there are six food deserts in New Hanover County, two in Brunswick County and one in Pender County.

Other proposed conditions on discount variety stores include a separation requirement, so stores may not locate within at least 1 mile of each other. There’s also a limit on floor space to not exceed 10,000 square feet.

“We’re making a recommendation within the confines of what we’re allowed to do legally and also what we believe is best practice based on our research and some things that other cities are doing,” Hughes said.

When shaping local policy, municipalities must be careful not to engage in business discrimination. Rules must be rooted in a well-defined and supported purpose — otherwise, they may not stand up to legal scrutiny if challenged. 

Local governments cannot say yes or no to a project merely on the basis of whether or not they want it, especially if it fits the current zoning. However, the city has implemented separation requirements in the code for other types of uses that have been successful.

“The separation requirement is always based on protecting the public health, safety and welfare,” Hughes said. “That’s the function of zoning and that’s been upheld quite a bit.”

Expanding in Wilmington

The growth of Dollar General is not a trend only specific to Wilmington; the franchise is expanding nationally. The U.S. now has more dollar stores than McDonald’s and Walmarts combined, according to the ILSR — and the number is continuing to grow.

In 2018 the company celebrated the opening of its 15,000th store on Dawson Street. The city often receives feedback from the community on the proliferation of discount variety stores, particularly in low-income areas. 

“Anytime a discount variety store goes up under construction, we get phone calls,” Hughes said.

Dollar General plans to add another 1,050 stores in 2021, as well as 1,750 remodels and 100 store relocations, according to its third-quarter earnings report.

In Wilmington, dollar stores are also starting to expand outside of predictable locations.

The new Dollar General at Greenville Loop Road and Pine Grove Drive is not in a rural or low-income area. Neighbors were opposed to the store coming in largely due to pre-existing traffic concerns any retailer could exacerbate.

“It’s kind of an interesting location for a Dollar General,” said Glenn Harbeck, director of planning, development and transportation for the City of Wilmington. “I would say generally that part of town was not receptive to it being located there, but in that case, the property was already zoned for commercial use.”

dgx dollar general
The announcement of DGX was widely mocked. Criticism centered on the city’s growing reputation for already hosting a proliferation of these stores, with one now located in a publicly funded project in an area known to need a grocery store.  (Port City Daily photo/Alexandria Sands)

In the fall, DGX, a new urban concept of Dollar General, opened in the 13-story River Place, a private-public development in downtown Wilmington. The upscale spin on the discount store targets “busy, metropolitan shoppers” with grab-and-go sandwiches and coffee and soda stations.

The announcement and eventual opening of the high-end store was widely mocked among residents on social media. Criticism centered on the city’s growing reputation for already hosting a proliferation of these stores, with one now located on the ground floor of a publicly funded project in the heart of one of the region’s most high-profile areas in need of a grocery store. 

To avoid confusion, discount variety stores are defined specifically in Article 8 of the Land Development Code. Here is the definition as currently drafted.
An updated version of Article 3, which outlines use standards, is expected to include new conditions for discount variety stores when it goes into effect.

Send tips and comments to Alex Sands at alexandria@localdailymedia.com

Alexandria Sands
Alexandria Sands
Alexandria Sands is a journalist covering New Hanover County and education. Before Port City Daily, she reported for the award-winning State Port Pilot in Southport. She graduated from UNC Charlotte and wrote for several Charlotte publications while there. When not writing, Williams is most likely in the gym, reading or spending time with her Golden Pyrenees. Reach her at alexandria@localdailymedia.com or on Twitter @alexsands_

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