In the rural retail economy, dollar stores rule

EMPORIUM, Pa. — In a land beyond Walmart, where the mom-and-pops and five-and-dimes have closed, a bulwark remains, offering the citizens of sleepy Cameron County cheap stuff like corn chips and scented candles and poster board for school projects.

The Dollar General in downtown Emporium sits across the creek from a mountain in Pennsylvania's least populated county. A sporting goods store, three pharmacies and a few general stores disappeared, but Dollar General has been there for decades and is building a new location by a baseball field.

Cameron County is so rural that Emporium's Dollar General is the only major dollar store in the county, a lone soldier in the battle for low-price retail supremacy,

"I think these dollar stores are filling the void in small-town America," said Phil Jones, a Cameron County commissioner and lifelong Emporium resident. "It's really important here, and it's expanding, and people are happy about it."

Dollar stores are everywhere in Pennsylvania and New Jersey, more ubiquitous than Wawas in the Philadelphia area, and they remain one of the nation's fastest-growing retail segments. The competition is tougher in the cities and suburbs where Walmarts and Costcos anchor down, but in the most rural parts of America, where big box stores won't go, dollar stores thrive.

Jay I. Sinha, an associate professor at Temple University's Fox School of Business, said that dollar stores, as a category, grew 50 percent from 2010 to 2015. One of the reasons they do well in rural areas, he said, is that lower-income shoppers will buy food there.

Some analysts see their proliferation as a bellwether of a widening gap between economic classes.

"Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America," Garrick Brown, director for retail research at the global commercial real estate company Cushman & Wakefield, told Bloomberg earlier this month. "It's based on the concept that the jobs went away, and the jobs are never coming back, and that things aren't going to get better in any of these places."

Dollar General, Dollar Tree and Family Dollar, the three biggest chains, have more than 1,200 locations in Pennsylvania. That's about a 50 percent increase in the last decade. Dollar General alone has 650 locations in the state, often just miles apart from one another, and the company plans to open an additional 1,000 stores across the country as part of a $22 billion initiative.

"I go to this one and I go to the one down in Drums because sometimes they have better deals," Kelly Kirk, 39, said last week outside the Dollar General in Mountain Top, Luzerne County.

Kirk bought a bottle of laundry detergent. Dollar stores carry both nationally advertised brands and off-brands. They load up on seasonal decorations and party supplies made in China. The Dollar General in Mountain Top has a freezer section with pizzas and TV dinners.

Earlier this month, a new Dollar General opened in Lake Ariel, Wayne County. That location is bookended, on the same highway, by two more Dollar Generals. One opened in August.

"I think the customer today is time-starved," said Randy Guiler, a Dollar Tree vice president. "It's an attractive spot to stop for their fill-in needs. People need items at different times of the week."

Berwick, a borough of just over 10,000 in Columbia County, has two Dollar Generals and a Family Dollar. Dollar Tree, which bought out Family Dollar in 2015, has both a store and a warehouse there.

"It's a dollar store, you know," Cinda Brandon said with a shrug outside a Dollar General in Berwick. "I mean, it adds up, but it's still that illusion of a dollar."

The four horsemen of cheap retail haven't killed off KB Dollar, an independent dollar store in downtown Berwick. It sells Mylar balloons, wreaths and floral arrangements, cheap candies like circus peanuts, and thousands of other items. It was bustling on a Friday afternoon last week.

"We have more novelty items and knickknacks and crafts," said manager Trudy Gearhart. "I'm not sure why there's so many [stores] here. I just think people are looking to save."

People in Berwick, according to the U.S. Census Bureau, would need to save their dollars. The median household income is $18,154 below the state average. That's in the middle of the pack for Pennsylvania's 67 counties. Within a 10-mile radius of  Philadelphia, the poorest major city in the United States, the three major chains have a total of 127 locations.

Dollar stores are a modern twist on the five-and-dime such as the ubiquitous Woolworth's, which had 8,000 stores at the height of its empire in 1982, said Susan Strasser, a retired history professor at the University of Delaware. Those stores targeted a much broader base of customer, she said, but modern retail is laser-focused on its data.

"The whole notion of targeting and economic geography is relatively recent," Strasser said.

Income is one factor, said Dollar Tree's Guiler, but average age and population density are also taken into account. Dollar Tree, he said, serves a "broader income range" in more suburban markets. He described Family Dollar has "multi-price" and geared toward rural and urban communities.

Dollar General, which operates 14,000 stores in the U.S., looks at traffic patterns and its competitors' locations, too. "We know convenience is a major factor in our customers' shopping decisions, as we generally serve customers within a three- to five-mile radius, or 10-minute drive," spokeswoman Angela Petkovic said.

Cameron County, about 250 miles northwest of Philadelphia, is simply too small and too sparse to get many new businesses. Approximately 5,000 people live in the county, and the top industry is forging and stamping metals. The nearest Walmart is 22 miles from Emporium, down a two-lane country road in Elk County.

Emporium's new Dollar General, like many recently opened dollar stores, could expand its food sections beyond the staple of snacks, candy and drinks.

At Dollar General in Mountain Top, sports writer Steve Stallone left with a full cart of groceries. He lives in Weatherly, Carbon County, about 20 miles away.

"Our grocery store closed. We don't have one," Stallone, 54, said. "This fills a need."

Steve Stallone, 54, loads groceries into his car outside the Dollar General in Mountain Top, Luzerne County.