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TOPIC:
THE IMPACT OF DOLLAR STORE EXPANSION ON LOCAL MARKET STRUCTURE AND FOOD ACCESS
ABSTRACT
This paper studies the expansion of dollar store chains in the U.S. since 2008, which has generated public interest in their impact on retail markets and food accessibility. We show evidence that dollar store chains compete strongly with the grocery segment and find that their expansion has led to a large decline in the number of grocery stores and a significant reduction in fresh produce consumption for households with low income and high travel costs. We estimate a dynamic game of retail competition to understand the sources of dollar store success and calculate the cumulative effects of dollar store expansion.
Keywords: Retail industry, dollar store, food access, dynamic games.