As I understand it, a bit of both. They do often open stores where no grocery store existed. Now, people in those towns were getting their groceries somewhere before Dollar General showed up, in a neighboring town. So even though they are opening stores in food deserts, it puts some pressure on local grocers in adjacent towns. And, of course, they are opening stores in places that aren’t food deserts and putting a lot of pressure on local grocers. Even if they’re just buying soda and TP and what not at dollar stores, that puts strain on grocery stores that weren’t exactly making a mint before.
But it’s not all bad, because people living in towns that didn’t have a grocery store but now have a dollar store now have more convenience. So now they don’t need to spend 20 minutes driving for a gallon of milk.
The north end of Tulsa was an interesting story. Walmart moved into the area and the local grocers started closing, and I think the 2008 recession took out the last grocery store in the area, people would drive the 15 or so minutes to Walmart to save money. So the area was ripe for dollar stores, which moved in, and that pretty much put the nail in the coffin of any new grocery stores popping up. So now the are has loads of dollar stores, it’s ~15 minutes to Walmart, and that’s how it will be for a while. The govt has halted or tried to halt (can’t recall) new dollar stores from being added.
Dollar General stores do sell produce - not many, but some. In the areas where these stores thrive though, we’re talking pretty low income. I’m honestly not sure there’s a huge demand for produce. I grew up fairly poor, in what was at the time the poorest county in the state of Kansas. Nobody I knew was eating a lot of veggies, and when we did they came from a can. It’s weird to not eat produce when you live in the bread basket of America, but shelf stable food is cheap and convenient. Now for the portion of people living in these towns that does want to eat healthy, they are kind of boned, and that sucks.
And if you’re a single mom, or the bread winner of a family of four making $40k in the midwest, maybe saving money by shopping at a dollar store isn’t all bad. Sure, your diet sucks, but you have a tiny bit of wiggle room in the budget now. I’d love to live in an ideal world where everyone eats five servings of fresh produce, but in the real world I think dollar stores are kind of a blessing and a curse.