If You Build Them… Will it Matter? Food Stores' Presence and Perceived Barriers to Purchasing Healthy Foods in the Northeastern U.S.

Abstract

Policies incentivizing store entry or store improvements are aimed at increasing access to healthy foods; however, findings about their effectiveness to improve diets are mixed. Similarly, little is known about whether food stores' presence affects consumers' perceived barriers to purchasing healthy foods, which reflect the subjective hardships experienced by shoppers to purchase and consume healthier foods. In this study, we assess the relationship between the two most widely studied perceived barriers to purchasing healthy foods (price and availability) and the local retail food environment using individual‐level survey data collected across the northeastern US and census data on the numbers of grocery stores and warehouse clubs and supercenters. Our results indicate that unobserved heterogeneity plays an important role in determining the sign and magnitude of the relationship between store presence and perceptions. The likelihood that an individual cites price or availability as a perceived barrier depends upon the barrier considered, whether respondents live in the zip code where they shop, and the method of controlling for unobserved heterogeneity. Thus, policies focusing on improving access to a given store type may only mitigate some of the negative perceptions associated with one's food environment.

Dollar store expansion and independent grocery retailer contraction

“…The identification of could be confounded by a correlation between the error term and the treatment measure. Because dollar stores could deliberately choose to locate in a particular census tract, this correlation is likely non‐trivial and different from zero (see, e.g., Chenarides, Bonanno, & Palmer, 2021; Chenarides, Cho, et al, 2021; Chenarides et al, 2023). To account for this potential source of bias, we take advantage of the timing of dollar store entry across census tracts and include fixed effects at the census tract and year levels, denoted by and , respectively.…”

“…Due to their ability to offer product assortments and service levels that attract different consumer types, independent grocery retailers can remain competitive in complex business environments, such as rural markets where retail margins are lower, deterring entry by national grocery retail chains. However, with the emergence of new food retail formats such as discount grocery stores, supercenters, and dollar stores, increased competition for consumers has become evident (Çakir et al, 2020; Chenarides, Bonanno, & Palmer, 2021; Chenarides, Cho, et al, 2021).…”

“…Notably, in 2021, some dollar store formats began incorporating fresh produce into their selection (Feng et al, 2023; Troy, 2021). One key aspect of the dollar store expansion strategy is its focus on low‐income and underserved markets, particularly in rural areas where independent grocery retailers traditionally operated (Chenarides, Bonanno, & Palmer, 2021; Chenarides, Cho, et al, 2021). By leveraging existing storefronts, dollar stores have expanded rapidly, adding over 20,000 locations or 1000 new outlets each year between 1999 and 2019.…”

“…Dollar stores have continued to thrive and are among the few food retailers that experienced revenue growth following the Great Recession from 2008 to 2010, outperforming big‐box discounters and membership‐only retail warehouses (Caoui et al, 2023). Dollar stores are predominantly located in rural and low‐income communities with limited retail investment and lower lease rates for retail space, allowing them to compete with larger retail stores (Chenarides, Bonanno, & Palmer, 2021; Chenarides, Cho, et al, 2021; Shannon, 2021). According to the USDA Food Access Research Atlas (United States Department of Agriculture, 2022a), up to 27% of U.S. households reside in low‐income and low‐access census tracts, where their dwellings are, on average, more than one mile away from the nearest supermarket in urban or 10 miles in rural census tracts.…”

“…Thus, our findings enhance those by Çakir et al (2020), Caoui et al (2023), and Chenarides et al (2023) by offering insights into how the dollar store entry effect operates across extensive and intensive margins and showing that dollar store entry harms independent grocery retailers, increasing their exit probability and reducing their employment and sales. Second, from a methodological standpoint, we add to the literature concerned with spatial dynamics of entry effects, using event studies, as well as heterogeneous effects of dollar store entry in local food markets (Çakir et al, 2020; Chenarides, Bonanno, & Palmer, 2021; Chenarides, Cho, et al, 2021; Grigsby‐Calage et al, 2021; Shannon, 2021). Event studies indicate that the adverse impact on sales and employment of independent grocery retailers disappears gradually in urban areas but persists in rural communities.…”