Affiliation:
1. Department of Agricultural and Resource Economics University of Connecticut Storrs Connecticut USA
2. Economic Research Service United States Department of Agriculture Washington DC USA
3. Department of Agribusiness and Applied Economics North Dakota State University Fargo North Dakota USA
Abstract
AbstractThis paper examines the effects of dollar store entry on independent grocery retailers in the United States between 2000 and 2019. We utilized an establishment‐level dataset comprising all grocery retailers and dollar stores in the country. Our findings indicate that dollar store entry is associated with a 5.7% decrease in sales, a 3.7% reduction in employment, and a 2.3% rise in the likelihood of independent grocery retailers quitting the business. These adverse entry effects are three times larger in rural than urban areas. Event studies indicate that the negative impact on sales and employment disappears gradually in urban areas but persists in rural communities. We document differences in treatment effects of dollar store entry across regions, retail formats, and time.
Funder
National Institute of Food and Agriculture
Economic Research Service
Subject
Economics and Econometrics,Development
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