How Dollar stores are targeting struggling Baltimore neighborhoods

By all accounts, Upton is one of Baltimore's most disinvested inner city neighborhoods: 73% population loss, a poverty rate of 56%, only 10% homeowners, 26% unemployment, only 29.5 % of residents have a college degree, Upton also has the second highest vacancy rate in Baltimore. The community is representative of too many similar neighborhoods in Baltimore. Except for the struggling public Avenue Market the area is also a classic food desert. But Upton is governed by a feisty group of community activists set to change the conditions. They secured funds from Wells Fargo and produced a masterplan and are determined to take fate into their own hands.

Dollar stores outselling Whole Foods

And then there is Family Dollar, an outfit that owns discount stores and is a subsidiary of Dollar Tree which bought it in 2015. The sad truth of the divided Baltimore is that this category of store is flourishing in many poorer neighborhoods like a parasite. So it is  everywhere in America. More Americans buy their groceries now from dollar stores than from Whole Food Markets, according to a newly published report.

There’s growing evidence that these stores are not merely a byproduct of economic distress. They’re a cause of it. (Report)

Grocery sales at the two biggest dollar brands, Dollar Tree and Dollar General, approached $24 billion this year, compared with roughly $15 billion at Whole Foods, according to private market data from the research firm Chain Store Guide. There are now more dollar stores in America than Walmart and McDonalds locations combined.

"From our data, a high proportion of Family Dollar's shopper base goes there out of necessity rather than because they particularly want to. There is nothing wrong with this position, but it does mean that as financial conditions improve, or people feel they can afford something better, they are more likely to migrate away." Neil Saunders, Business analyst, GlobalData retail.

To illustrate the story of a struggling community and a national chain store taking advantage of it, let's check in at a recent meeting of Upton's community leaders in which developers presented their projects for comment.

an invasive species: The Dollar store

Mary Blackwell, the Main Street coordinator had just finished speaking about the aspirations and hopes for Pennsylvania Avenue and the programs scheduled for the holiday season and announced that the Arch Social Club had received a $118,000 grant for the restoration of a marquee and installation of facade lights.

A standard edition Family Dollar offers nothing to a lively streetscape

Thank you to all who voted for the Arch Social club to receive funds from the 2018 Main Streets Campaign.  We were very excited to learn that The Arch Social Club in Baltimore made it to the winners circle. Founded in 1905, The Arch Social Club is one of the oldest continuously operating African American men's social clubs in the U.S. This project will restore the historic marquee and install exterior lighting to help launch a new arts and entertainment district. (website)

Masterplan Cover

The activists of Upton Planning Committee had convened for their monthly development meeting in the former Murray's grocery store inside the Avenue Market, particular busy on this morning. The sounds of the market coming freely in through the wide roll gate nearly drowned out the more timid voices, but timidity isn't the hallmark of the Upton activists who had just last year finished their Historic Upton Neighborhood Framework Masterplan with a planning horizon of 2026.

Mary Blackwell is an elegant fighter, softspoken, eloquent and firm she explained how an Arts and Entertainment District, facade improvement programs and various strategic interventions could turn Pennsylvania Avenue around. Upton has engaged the Neighborhood Design center and obtained concepts for three "development nodes" along the Avenue, one at Penn and North Avenues, one at Fremont and Penn (Triangle Park) and one at the Avenue public market.

And then the young representative of  Twin Rivers Capital LLC, hailing from South Carolina and apparently not too familiar with Baltimore ("TRC provides national retailers with a comprehensive solution for growing their business by developing new locations.") stood up to present his project located just adjacent to the Triangle Park node: A Family Dollar store. At this meeting he was like a fish out of water.

Though there is a multitude of vacant storefronts scattered throughout the Upton neighborhood, active commercial businesses are concentrated primarily along a two-block stretch of Pennsylvania Avenue centered on Upton Station at Laurens Street--Upton’s most active intersection characterized by a constant flow of foot traffic. However, 28% of community survey participants rated Upton’s “Variety of goods and services available for purchase in the community” “Poor” or “Very poor,” ranking this aspect of the community the second lowest among ten aspects. (from the Upton Plan)

The site just south of Triangle Park is currently a meadow

Twin Rivers wants to obtain a vacant site at 1401 Fremont Avenue, a lot that also faces Pennsylvania Avenue and a connecting road (Waltermeyer Ct). The site is currently owned by the City and Twin Rivers must first to obtain a certain level of support from the community before the Baltimore Development Corporation would entertain disposition of the site. The site is located in an Opportunity Zone and in a Food Retail Incentive Innovation Area.

In Food Retail Incentive Innovation Areas, according to the Baltimore Department of Planning, “BFPI will support and provide technical assistance to organizations exploring innovative models such as non-profit stores, cooperatives, mobile markets, ride sharing services and delivery platforms.”

 The young representative sent north by corporate headquarters fired up the projector and showed a typical Family Dollar box jammed into the corner of the lot with the remainder of the site paved over for parking and no less than three driveways connecting parking to all three surrounding streets. While the images spoke a decidedly different language, the young man inexplicably compared the 8000 sf store discount retailer which sells groceries but no fresh produce to Harris Teeter, a high end full service grocery store with stores of about 60,000 sf. Apparently he didn't realize that everybody in Baltimore knows Family Dollar stores which are the usual fare of retail for poor neighborhoods

Retail node near Avenue Market (Photo: Philipsen)

alongside the identical twins, Dollar General, and Dollar Tree, all of the sad inward looking facilities about which community members complain for the poor quality of goods and the lack of healthy quality food choices.

the dollar stores’ ruthlessly efficient business model doesn’t waste much time with the kind of healthy, perishable items that need to be thrown out a lot, such as fresh fruits and vegetables. (Huffington Post)

A community member at the table asked if Twin Rivers was aware of the proximity of a Dollar General store. "Yes, said the dude, "that is why we want to be here, competition increases business.  That is why you always see CVS and Rite Aid next to each other". Well, we know how well that worked (After Walgreens purchased Rite Aid over 600 stores closed, many in Baltimore. The saturation madness is diabolical. In the already noted study about dollar store sales an analyst observes:

“And their strategy of saturating communities with multiple outlets is making it impossible for new grocers and other local businesses to take root and grow.” 

Existing uses where the ground floor has active uses

In short, the Family Dollar store is precisely what an aspiring Main Street like Pennsylvania Avenue doesn't need. It certainly doesn't belong into a Food Retail Incentive Innovation Area.  It would set a terrible precedent for what is imagined as new investment on "the Avenue" by essentially saying "more of the same" and "that is all you deserve here". Here some of the strategies included in the Upton Plan:

• Establish programs that foster entrepreneurship and provide workforce development opportunities on Pennsylvania Avenue.

• Establish pop up shops in the Avenue Market to support entrepreneurs
• Promote small business incubation opportunities for local small business owners 

• Explore the development of a west-side deconstruction business in Upton

• Implement development standards that require developers to use local workers.
• Establish a pipeline that connects local construction trade workers with local development projects in Upton
• Maintain and monitor Upton Developer’s adherence to their stated local hiring goals shared in their development plans

There is little doubt that the development subcommittee of the Upton Planning Committee will let BDC and Twin Rivers know what they think about the project. Meanwhile one has to wonder how long the national chains will need before they learn that not only more affluent America but everybody else is tired of their ignorant, cookie-cutter suburban solutions to urban retail sites that serves no other purpose than milking profits from poor communities and channel them into the accounts of far away headquarters without providing any new benefit to the communities.

Klaus Philipsen, FAIA

Dollar General in Edmondson Village 

Link:
Dollar Stores Are Targeting Struggling Urban Neighborhoods and Small Towns. One Community Is Showing How to Fight Back

“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, a researcher with the commercial real estate firm Cushman & Wakefield, told Bloomberg last year.