Why Does Vermont Have So Many Dollar Generals?
Perhaps you've seen one — or many — on your travels. You've probably noticed the sign first: Big, and yellow, with black letters.
Note: Our show is made for the ear! As always, we recommend listening if you can.
The Dollar General store in Fairfax, a maroon-ish, standard-looking box, pops up as you make your way along Route 104. It’s brand new — it just opened up in October — and when we stop by, it’s about two weeks before Christmas. While there are nearly a dozen cars in the parking lot, it’s practically silent inside.
This oddly quiet store is far from the only Dollar General in the state. As of today, there are 37 Dollar General stores in Vermont.
And if you’ve been inside one, you know the shelves are stocked with an assortment of items: picture frames, paper towels, cleaning supplies, seasonal decor, juice, coffee, candles, toothbrushes … and, perhaps, under a big sign that says “DG Deals,” lemon bleach.
For folks like Pat Douglas, it’s that variety — plus the prices — that bring him to the Dollar General in Johnson. It’s about 3 p.m. when we meet him. He’s just off work, and he’s here to pick up some coffee. A big container of it costs $7.50.
“You go up to the store, it’s $10,” Pat says. “So I just saved $2.50.”
Douglas heads over to the register and chats with the store clerk. He's the kind of guy who seems to just know everyone (including one guy passing by who turns out to be his ex-brother-in-law).
For Pat Douglas, the appeal of Dollar General is pretty simple: It’s more affordable than the other market in town.
“I got three kids and a wife, and she works part-time, and so if I can save $40 just coming here, shopping twice a week, that’s $80 a week I’m saving,” Douglas says.
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Meet our question-asker
From where Danielle Drogalis stands, Dollar General's game plan seems to involve "going into those towns that don't have big chain grocery stores and putting up shops right next to them."
Danielle is the latest winner of a public voting round. If you're not familiar with how Brave Little State works, we answer questions about Vermont that have been submitted and then voted on by you, our audience. Why? We want to make our journalism more inclusive, more transparent and more fun.
Danielle's winning question was:
Why does Vermont allow so many Dollar Generals?
Danielle lives in Swanton with her family, which includes three kids and a whole menagerie of animals: Kids, cats, chickens, a dog, a hamster, and a turtle.
She is not a regular Dollar General shopper. But she has been inside.
“I remember I had to pick up a couple picture frames real quick,” she says. “I was driving by one, and I stopped in.”
Danielle tells us she became interested in the store after she and her husband were driving around the state.
“We’ve noticed Dollar Generals popping up everywhere,” she says.
Danielle is a math teacher, and she approaches her curiosity systematically. She says growing up in Vermont, she was bombarded by what she jokingly calls “propaganda” about the importance of local stores.
And she’s concerned that the proliferation of Dollar Generals could erode what she — and many others — see as an essential part of Vermont’s character.
“Things that I always grew up thinking that were important to Vermont, like ‘Buy Local’ ... It’s just funny to see all these Dollar Generals just pop up in spite of that,” she says.
But, Danielle says, she can also see why Dollar General thrives here.
“I get why someone would go there, because things are cheaper,” she says. “So if you're trying to stretch a dollar, which a lot of people in Vermont are doing, that's where you would go to get certain items.”
Danielle’s question about Dollar Generals isn’t just about one chain of dollar stores. It also asks: How much say do Vermont towns really have about who does business, and where?
Once upon a time in Chester
Dollar General opened its first store in Vermont in 2006. Today, like we said, there are 37 scattered across the state. If you look at a Google Map, you can see these sort of clusters around Barre and Rutland. And then there are outposts in smaller towns such as Fairlee and Arlington.
Back in 2011, Dollar General proposed a location in the town of Chester, in Windsor County. It has a population of roughly 3,000 people, and a historic village with local businesses lined up along a town green.
Claudio Véliz says his reaction to the project proposal was "negative, immediately." Véliz is an architect based in Chester. He was on the planning commission when the Dollar General was proposed, and he says he was concerned about how the store was going to look.
“There’s a reason they’re called big box stores,” Véliz says. “They’re not known as New England Victorian stores. They’re known as big box stores. They’re effectively very, very inexpensively built aircraft hangars.”
This was going to be more of a small box store — about 9,000 square feet. And it was going to be a little bit down the road from the village center.
But Véliz says there was another concern: “The economic impact or the commercial impact on a community.”
Shawn Blair owns the Southern Pie Cafe, right in the heart of the village. He was just getting his businesses started when this was going on.
“The main thought from customers’ point of view and small businesses, is that the big corporate conglomerates come into town, it’s bad for business and bad for the view of a small business town of Vermont,” he says.
Across town, over near the railroad tracks and the depot, there were worries about a more long-standing local business: Lisai’s Chester Market, a grocery store.
“At first, we were very nervous,” says market co-owner Lonnie Lisai. “Another full-line grocery store coming to rural Vermont — [a] rural village, like Chester, 3,000 people. I said, ‘Oh my God.’ We didn’t know if we were gonna make it.”
Lisai’s Market has been in the family for 95 years. Lonnie Lisai's brothers run locations in Bellows Falls and Alstead, New Hampshire.
“Not that I was anti-people-coming-in,” Lisai explains. “Anybody can have a business, they can build a business in the community. I believe in capitalism. It works. And so I understood they had all the rights in the world to come to Chester.”
And there was definitely support for for the idea. Alicia Muguira was pro-Dollar General.
“Just because it’s closer for me,” she says. “I didn’t have to travel to Springfield. And it brings business to the community.”
At this point, the story of Chester is probably sounding familiar to you. A small Vermont town grapples with a proposed development by a national corporation.
And to Danielle’s question, about the proliferation of Dollar Generals here, we think Chester’s story holds a lot of answers.
For example, why would a company that earned $25.6 billion in revenue in 2018 even have been interested in such a sleepy, out-of-the-way town?
Dollar General's corporate strategy
Dollar General is not a business that just so happens to be really popular in Vermont. We’re talking about a company with an aggressive growth strategy.
On a recent earnings call, CEO Todd Vasos touted the company's strong finances.
“Net sales increased 8.9% to $7 billion, compared to net sales of $6.4 billion in the third quarter of 2018,” he said.
Dollar General also hit a big milestone during the third quarter: They opened their 16,000th store.
Growth is a key part of the Dollar General’s corporate strategy. According to the company’s 2018 annual report, they’ve opened an average of 1,000 stores annually over the last three years.
Most stores are small — they average about 7,400 square feet, and are designed to be “low-cost, no frills” buildings. Stores also tend to have a small staff, between six and 10 people, according to director of public relations Crystal Ghassemi.
In our interview with Ghassemi, we ask her how she would answer Danielle’s question.
“I think it’s important for us to understand that for Dollar General, we keep the customer at the center of everything that we do,” she says. “And then as we're looking for where we can add additional locations, keeping their needs is really where we're squarely focused.”
So, not a direct answer, but her implication is that more Dollar General stores are good for their customers.
The majority of Dollar General stores are in small towns. According to the 2018 annual report, 75% are located in communities with 20,000 or fewer people.
“What we often see Dollar General in particular do is that they’ll go into a very small town,” says Stacy Mitchell, the co-director of the Institute for Local Self-Reliance, a national advocacy group, and the author of Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses. We talk to her over Skype.
“And we often see Dollar General open across the street or next door to that local grocery store," Mitchell says. "They take away typically around 25% of the sales of that local grocery store, and so we’ve seen just countless local grocery stores disappear in small towns.”
The Institute for Local Self-Reliance is an outspoken critic of Dollar General and similar chains for what it calls “predatory development practices.”
“What we’re seeing in our research is that the communities and the populations most harmed by the destructive effects of these stores are often low-income people,” Mitchell says. “Dollar stores have negative impacts on employment and on wages, particularly for retail workers.”
Chrystal Ghassemi, of Dollar General, takes issue with this criticism.
“We see the addition of each new Dollar General store in communities as a positive one,” she says. “We are creating local new jobs in each of [these] communities.”
And when we ask if Dollar General specifically targets lower-income areas for development, Ghassemi says:
But in its annual report, the company says its core customers are “low- and fixed-income households.” And in that quarterly-earnings call, CEO Todd Vasos described their target customer as being “always a little stretched.”
“Our core consumer — we see her about where we had the last couple of quarters, she still has a little bit of extra money in her pocket, continues to be employed at a pretty high rate,” Vasos said. “But always remember: Our core customer is always a little stretched.”
Now, Danielle’s question is about why there are so many Dollar Generals in Vermont — not whether the stores are helping or hurting communities. But regardless, Stacy Mitchell, from the Institute for Local Self-Reliance, says that dollar stores’ ambitious growth can take comunities by surprise:
“Because they are a fairly small footprint, they have kind of come in under the radar, and have been allowed to sort of proliferate without people noticing and without really going through a thoughtful process of asking, ‘Is an appropriate use? Is this beneficial to the community?’ on a case-by-case basis.”
Back to Chester
“When they first hit rural Vermont, it took us, everybody, off-guard," says Lonnie Lisai, the owner of the local grocery store in Chester.
When Dollar General proposed a store here in 2011, the town had a median household income of about $33,000 a year. And in this town, the question of whether Dollar General could build a store took four years to answer.
Some quick background, in case you’re not a land-use buff: In any Vermont community, there are a couple of boxes that a proposal like this might need to check. If there’s local zoning, the project has to be in compliance with it. If the project triggers Act 250, it needs an Act 250 permit. And Act 250 says the project has to adhere to the community’s town plan. Got it?
“The town plan is extremely important under Act 250, because one of the Act 250 criteria is conformance to the town plan,” says Jim Dumont, a lawyer based in Bristol.
Act 250, of course, is Vermont’s land use and development law.
“If the land is already subject to Act 250, then any changes to the land use will trigger an Act 250 amendment process,” Dumont says. “And that was true in Chester. But generally a commercial development that’s not 10 acres is going to be exempt.”
So this Dollar General proposal in Chester was subject to both Act 250, and local zoning. And it got approval on both fronts. It looked like smooth sailing for the project — that is, until a group of Chester residents came together to try to overturn both decisions. They hired Jim Dumont, the attorney, to represent them.
The architect Claudio Véliz, whom we met earlier, was a member of the opposition, as it were. And he says the strongest argument he and the others could make in court was “architectural.”
“The incompatibility of that building,” he explains, referring to the design's inauthentic features.
“For example, the cupola on top has no function, it doesn’t air out the space — it’s simply cosmetic, ” Véliz says. “There are no examples whatsoever in all of Chester of any fake features.”
They also made arguments about floodways, and traffic. But attorney Jim Dumont says their main message was that a Dollar General would not in fact adhere to Chester’s zoning.
“All construction of new buildings must ‘adhere harmoniously to the overall New England architectural appearance, which gives the center of Chester its distinct regional character and appeal,’” Dumont says.
“In my view, the largest complaint that people had frankly was that there was gonna be a Dollar General in Chester,” says Alan Biederman, the attorney who represented the developer for Dollar General, a company called Zaremba Group. He spoke to us over Skype.
“So that was handled as what’s called an aesthetics decision, meaning that the project as proposed doesn’t fit the character of the town or the area in the town where it’s being located,” Biederman says.
Biederman remembers the other arguments about floodways, and so forth. On aesthetics, he says Zaremba Group did make some changes to the design of the proposed Dollar General.
“There were aesthetic changes made to put shutters up, and to make it look more barn-like,” he says. “Some people didn’t like those changes.”
After multiple appeals, the case ended up in the Vermont Supreme Court.
The world of zoning
We’ll get back to Chester in a minute. But first, to understand why there are so many Dollar General stores in Vermont, we need to take a brief detour into the world of zoning.
Karen Horn is the director of policy and advocacy at the Vermont League of Cities and Towns. She says when it comes to zoning, town by town, the regulations run the gamut.
“Zoning really directs your land-use vision in your community,” she says.
Take Waitsfield. It’s on one end of the spectrum, with strong zoning bylaws. Their regulations stretch for 116 pages, with provisions about the “adaptive reuse of historic barns,” keeping the “rural and scenic character of the Route 100 corridor,” and what kind of signs you can put up in town.
But some towns have weak or vague regulations, and other towns don’t have any zoning bylaws at all.
“I generally say to towns, you're kind of shooting yourself in the foot if you don't have any kind of bylaw in place,” Horn says. “You're leaving all those decisions up to whoever decides to come and develop in your community.”
But while zoning regulations help direct the aesthetics of a community, there’s little they can say about the kind of businesses that come in. If a business meets the zoning requirements, the town can’t discriminate.
“You can't say, ‘No Dollar General.’ You can't say, ‘No Wal-Mart,’” Horn says. “As a matter of fact, another fight we had years ago is, you can’t say, ‘No' ... I don’t know what they’re called. Sex shops?”
She means adult entertainment stores.
“Yes, adult entertainment stores. You can't say, ‘No’ to something like that,” Horn says.
Act 250 does limit some of the bigger stores from coming in. But Dollar General stores are usually smaller developments.
And Dollar General and other developers have gotten good at figuring how to keep their projects below the Act 250 thresholds. That’s according to Greg Boulbol, the general counsel at state Natural Resources Board.
“Those are the jurisdictional triggers,” he says. “They were developed by the Legislature many, many, many years ago.
Boulbol says he doesn't believe that these developers "generally are acting in any shady way."
"It’s just the way the law was written," he says.
And even when a project — say, a Dollar General — does need Act 250 approval, communities often come to find out that their town plans are more “aspirational” than anything else. Here’s Jim Dumont again, who helped oppose the Dollar General in Chester:
“Town plans speak in terms of, ‘Our goal is this, our goal is that.’ Well that’s very nice, but if you want your town plan and the wishes of your community to mean something under Act 250, it can’t be a vision statement,” Dumont says. “It has to have specific concrete standards. Very few towns plans do.”
And yes, local zoning can be more limiting. But it can still leave an opening.
“A lot of folks I’ve worked with have been shocked,” Dumont says. “They said, for example, in Chester, ‘We have some really good language in our zoning, really good language in our town plan.’ And it turned out, the court said it wasn’t good enough.”
Which means ... Chester lost
That’s right. The opponents of Dollar General in Chester, who took their case all the way to the Vermont Supreme Court? They lost.
“The language was too vague,” says Claudio Véliz, the architect. “You either have the ordinances in place before all this happens, or you lose. It really is that simple.”
But Alan Biederman, who represented the developer, says it’s tricky. Say you set a size limit for a new building of 10,000 square feet.
“That means it can be 9,900 square feet,” Biederman says. “So do you then say, ‘OK, well we really meant 5,000 square feet'? Well, do you want buildings that are 4,990 square feet?”
Chester did adopt a 5,000 square foot limit — after the Dollar General came in. And Alan Biederman says there’s another answer to Danielle’s question. In his experience, when there’s local opposition, big corporations can often afford to push their projects through.
“By the time you’re going to the Supreme Court, you’ve already knocked out anyone who didn’t have an abundance of money,” he says. “And so what you wind up with is ... most development is going to be done by multi-state and multi-national entities.”
As for the opposition’s attorney, Jim Dumont? He went on to work with other towns fighting Dollar General developments. All told, he's worked with four communities: Chester, Ferrisburgh, Jericho and Hardwick.
And of those four communities, how many now have Dollar Generals?
“All four," he says.
The Chester Dollar General has been open for about three years now. We go to the store on a Thursday afternoon. There’s a steady churn of shoppers buying this and that.
This is where we met Alicia Muguira. We heard from her earlier; she was in support of this store. And she shops at Dollar General … a lot.
“Normally twice a day, I swear to God,” Alicia says. She says her staples are toys, water, clothing, and arts and crafts supplies.
“Because they have a good selection,” she adds.
Dillan Coburn works for Ludlow Ambulance and Chester Ambulance, and he says he tries to do all of his shopping at this Dollar General. Today, he’s here to pick up a gift for his Secret Santa on the Ludlow crew. He's holding some muffin tins.
“Apparently that’s what he wanted, and some muffin mix,” Coburn says. “So, satisfy all of his muffin needs.”
Coburn wasn’t around during the fight over this store, but he knows about it. And he thinks things worked out for the best.
“I mean, look at how many people shop here," he says. "I don’t think really anybody has anything bad to say about it now."
But Scott Blair, who owns the Southern Pie Cafe in Chester’s village, has mixed feelings.
“I do go there, I’m gonna be the first to admit that I do go there,” he says.”But do I support that coming into the town? No.”
Ultimately, Blair says, it’s more convenient to swing by the Chester Dollar General for things like toiletries than it is to drive all the way to Rutland or New Hampshire.
We heard a similar sentiment in the town of Johnson, where we met Pat Douglas.
"As you can see, everybody's happy about the place," he says. "Otherwise they wouldn't be shopping."
Standing in the parking lot of the Dollar General there, Douglas says the store fills a gap in the community.
“You know everyone here in town, especially here in town — no one’s rich. And if we can save $40 a week, that’s a lot of money to an ordinary Joe that works 40, 50 hours a week and makes $14 an hour or so,” Douglas says.
And what about the people who don’t like Dollar Generals?
“I think they have a little more money,” Douglas says. “That’s what I think.”
A new chapter for Lisai's Market
So what happened to Lisai’s Chester Market, the local grocery store? Turns out, for now, they’re doing OK. Lonnie Lisai says once they knew Dollar General was coming, they started strategizing.
“Well basically, we figured out what their strength is. And it’s groceries. There’s no way we’re gonna compete head-to-head with groceries,” Lisai says. “And so I sat down with my staff, and we started looking at the produce, the dairy, the meat, the deli — anything fresh that Dollar General doesn’t carry.”
Lisai gives us a tour of his store to show off everything they’ve improved and changed in response to the Dollar General. There are prepared foods ready for today’s lunch crowd: Steak tips, stuffed shells, pork egg rolls, spicy kielbasa pasta and much more.
The market now sells organic produce, and Lisai is particularly proud of the fresh meat and the wine and beer selection.
“We really increased our beer and wine sales by making it look attractive,” he says.
He tells us that sales did take a hit when Dollar General arrived — they went down 10%. Now they’re a little higher, but still down 5% from the pre-D.G. days.
“Which is good, very good, so we’re climbing back up,” Lisai says. “This past three, four, five months, we’re almost even.”
And he hasn’t had to fire anyone, though he did stop hiring part-time high schoolers for a while.
There are 25 people who work here. In fact, one of Lonnie Lisai’s employees came from the Dollar General: Shaina Robinson is cooking crab rangoon egg rolls in the back kitchen.
“He’s the best boss I’ve ever had,” Robinson says of Lisai. “I’ve got three kids, and you know, he lets me work mom hours, and it makes my life a lot easier than any other job I’ve had.”
Robinson now makes $15 an hour — she says Dollar General had paid her minimum wage.
When we asked the company what they pay their employees, PR director Crystal Ghassemi wouldn't give specifics.
“At Dollar General, we provide all of our employees with competitive wages, benefits and the opportunity to grow a career at Dollar General,” Ghassemi said.
And when we asked to interview a current employee of the Chester Dollar General, the company wouldn't allow it.
Now, Chester is just one town. But for his part, Lonnie Lisai has a theory about what’s changed since the Dollar General came.
“So basically what I’m thinking what happened was, more and more people are staying in town now,” he says. “They’re not going to go to Claremont [in New Hampshire], they’re not going to go to Rutland.”
Rather than driving elsewhere for a big shop, Lonnie thinks more people are finding what they need in Chester — sometimes at the Dollar General, and sometimes at his market.
“Once we figure this all out, it’s like a mutual — it’s helping each other out,” Lisai says. “And I think the whole village is benefitting. More people, more cars.”
Perhaps this is an attractive environment for a buyer. This past summer, Lisai and his wife, Obe, decided to sell Lisai’s Chester Market. Not because of Dollar General, Lisai tells us, but because they want to retire.
“We’re selling a way of life, we’re not selling an investment,” he says. “If people come in here, they’re gonna look at, ‘OK, Lonnie, you had all your five children go through college, they all worked here, your best friends are some of your staff.' It’s a way of life. And if you recognize that, you’re going to be very successful.”
As for Dollar General, the company has ambitions to keep growing. In the coming year, they want to open 1,000 new stores.
When we asked how many they’re planning for Vermont, or what communities they’re considering, they wouldn't say.
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