Cities Are Fighting Back Against Dollar Tree and Family Dollar—Here's Why

Chicago is moving forward with an ordinance to restrict new dollar store openings.

Chicago is the latest city to put up a fight against these chains. On Monday, the city's Committee on License and Consumer Protection endorsed an ordinance that would forbid dollar store owners from opening another location within a mile of a store "owned or managed by the same controlling person," according to the Chicago Sun-Times.

The legislation applies to "small-box retailers," defined as stores between 4,000 to 17,500 square feet in floor area that advertise most of their inventory as less than $5 per item.

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A city official also cited "unsafe conditions" at Dollar Tree locations.

The move is in response to complaints about the roughly 150 dollar stores that already exist in the city, with consumers citing crime, poorly maintained locations, and the potential to drive out smaller businesses, Fox 32 Chicago and the Chicago Sun-Times reported.

Matt O'Shea, Alderman of the 19th Ward of Chicago, pushed the legislation in the city, as his ward already has four dollar stores with a fifth set to open.

In a Sept. 15 letter to the Chicago Department of Business Affairs & Consumer Protection, O'Shea specifically pointed to a Dollar Tree location at 106th & Pulaski Road, citing overflowing trash outside the building and "unsafe building conditions," among other issues.

According to the Chicago Sun-Times, during the meeting on Monday, O'Shea explained, "This is not a struggling small business barely making ends meet in this post-pandemic world ... This is a Fortune 200 company that has demonstrated absolutely no interest in being a good neighbor or being responsive to local government."

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Attempts to fix the problems were ignored, local officials say.

O'Shea also wrote that he and his staff have attempted to work with local management as well as Dollar Tree's corporate offices to address these issues, but they have been ignored.

Under the new ordinance, however, dollar store operators would need to be more responsive to consumer complaints, per Fox 32. The Chicago Sun-Times also reported that small-box retailers would be required to display customer service placards that include the owner's name, phone number, and email address.

In a statement to the committee in Chicago, which was then provided to Best Life, a company spokesperson for Dollar Tree and Family Dollar said they aim to offer goods at "accessible prices" in communities where there are fewer affordable options.

"We invest in neighborhoods where other big box retailers are leaving, with locations in 46 wards in the city, and 84 percent of all Chicago consumers shopping at dollar stores for quick-trip, essential 'fill-in' purchases," the spokesperson continued. "We are committed to offering our customers a convenient and safe shopping experience where they can find essential goods at affordable prices. If passed, this ordinance will make it harder for dollar stores to operate, and it will limit one of the few low-cost, high-value options for essential household goods and force residents to travel further and likely pay higher prices."

The spokesperson also noted that they are working to "improve the overall shopping experience," investing nearly $1.5 million in upgrades and repairs following initial concerns from local elected officials in Oct. 2023. They also said the company is hiring more associates to help with the maintenance and safety issues at local stores.

"Dollar Tree and Family Dollar seek to collaborate with the city and our community partners," the spokesperson said, also asking the committee to rescind the proposal and instead "work with us to develop a systematic approach to addressing these challenges and helping to foster a climate for greater economic development and community enrichment in deserving neighborhoods."

Chicago isn't the only city fighting back.

The fight against dollar stores is not new. In Nov. 2023, Detroit City Council Member Angela Whitfield-Calloway voiced the need to keep new dollar stores from opening, BridgeDetroit reported. At the time, there were over 80 dollar stores in the city already, the outlet wrote.

“The need for such regulation arises from the unchecked proliferation of dollar stores in Detroit, which, in my opinion, has had detrimental effects on our community,” Whitfield-Calloway wrote in a memo to the council's legal staff.

Much like officials in Chicago, Whitfield-Calloway noted that dollar stores could crowd out smaller independent retailers, BridgeDetroit reported. However, she also pointed to the nutritional value of the food at these stores, and the potential health impacts on the city.

Whitfield-Calloway continued in the memo, “Dollar stores often prioritize offering processed and low-nutrition items, which can contribute to food deserts and worsen health disparities in underserved neighborhoods. This can have long-term negative public health effects that ultimately weaken the well-being of Detroiters.”

Detroit and Chicago aren't alone either. According to a Feb. 2023 report from the Institute for Local Self-Reliance, at least 54 cities and towns—including Birmingham, Alabama; Fort Worth, Texas; and Plainview, Nebraska—have enacted laws that "sharply restrict new dollar stores." Some cities banned new locations from opening within a certain radius, while the town of Stonecast, Georgia, enacted a ban on new dollar stores as a whole.