Why midcoast towns are blocking dollar store development

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When Sean Donaghy and his wife Amy opened their general store in the Knox County town of Washington in 2015, the town “poured in the doors,” Donaghy recalled.

Now, a decade later, it’s the community’s love for the store that helped drive a nearly unanimous vote at a town meeting on Wednesday night for a six-month moratorium on the development of any major non-residential projects.

The move was meant to block a proposal to build a Dollar General in the town — a development that residents feared would threaten their locally owned alternative.

The Washington General Store has an open kitchen where it cooks fresh food and baked goods daily. Customers can buy ready-made meals, including meatloaf, mashed potatoes, beef stroganoff and vegetarian dishes. The bread for their sandwiches is made in-house.

On top of all that, it’s a place where community members bump into each other.

“It’s a place where people love to go, have a chat, get a hot coffee,” said resident Kathleen Gross, who belongs to a group opposed to the development of the dollar store.

While supporters of dollar stores argue that they create low-cost alternatives for consumers, Washington is part of a growing group of midcoast communities that have sought to limit their development. Lincolnville recently renewed a moratorium against big retailers for a second time, after a big project was proposed, and in 2016, Thomaston voted a similar way.

There is a deeper tradition of midcoast communities pushing back against big chain stores. Belfast has long limited the development of box stores after a Wal-Mart was proposed in 2001. Their concerns often center around the competition that chains can pose to local businesses that offer more nutritious options, and the way they can change the character of a community.

After the engineering firm Gorrill Palmer proposed its Dollar General in Washington last fall, residents formed a group called Citizens of Washington that opposed the project. On Wednesday, all but two of more than 100 residents packed in the gym of Prescott Memorial School voted for the moratorium.

Residents of the town of Washington voted to enact a six-month moratorium on new major non-residential development projects Wednesday night in an effort to block the construction of a new Dollar General. Credit: Jules Walkup / BDN

Besides the risk that it could run the local general store out of business, residents have also worried that it would increase traffic along Route 17 and contribute to more crashes, according to Gross. They also feared that the new store’s workers would not be treated well, that it would not offer enough nutritious food and that it would leave behind an unusable shell of a building if it were to close.

Donaghy said he wasn’t opposed to the new store because of the competition — he and his wife sell freshly-made meals while Dollar General does not — but because it wouldn’t match the town’s character.

“People aren’t going to say, ‘You know what, I’m going to go out of my way on a Sunday drive to the Dollar General,’ you know?” Donaghy said.

There’s research showing that dollar stores have quickly grown across the U.S. in the last decade — especially in rural areas — and that they can cut into local businesses.

A 2023 study in the journal Applied Economic Perspectives and Policy showed that when a dollar store opened in a census tract, independent grocers were 2.3 percent more likely, on average, to exit the market. Employment at independent grocers fell about 3.7 percent, and sales declined by 5.7 percent.

Dollar stores provide shelf-stable food at lower prices, “attacking” grocery stores at their highest profit margins and sending profits to out-of-state headquarters, according to Kennedy Smith, a senior researcher at the Institute for Local Self-Reliance, a national organization that has advocated against low-cost chain stores.

The main source of funds coming back to the community are property taxes and the employees’ lower wages.

“If you get three dollar stores within a two-mile radius of each other, they’re almost certain to kill or put at risk an established grocery store,” Smith said. “Or, if there is no grocery store there, they’ll make it so no grocery store will come and locate because there isn’t enough market to support it.”

Smith raised other concerns, including that when dollar stores close, it can be hard to reuse their buildings because of their limited refrigeration capacity.

But there’s also a subset of American communities that have tried to fend them off. Since Smith began working at the institute in 2020, she has learned of 102 communities that have blocked dollar stores or similarly sized chain retailers.

Dollar General Corporation did not respond to a request for comment.

There are groups that support the construction of more dollar stores.

In response to Washington’s vote on Wednesday night, a group called the Consumer Choice Center, which champions deregulation, said in a press release that the vote would take away the choice for lower-income residents to buy cheaper food.

“The arguments made in favour of the moratorium do nothing but limit the choices of others, specifically those with limited financial means or those who are living on fixed incomes,” the group said.

Now that the moratorium has passed, Washington officials plan to consider rules changes that would permanently restrict large, non-residential retail developments. Any changes would require additional local approval.

“Change is inevitable,” Donaghy said. “Washington just wants to be able to be at the helm of whatever change is coming, and not have something like Dollar General come in and kind of lower the bar.”

Jules Walkup is a Report for America corps member. Additional support for this reporting is provided by BDN readers.

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