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Dollar stores — 18 of them — have filled in gaps as conventional grocers pulled up stakes in Pueblo

Economic developers acknowledge an uneasy relationship with deep-discounters as Pueblo's economy tries to rebound

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PUEBLO — It’s a late Friday afternoon on Pueblo’s Santa Fe Avenue, a two-lane strip of road that winds out east of the Steel City, as it’s still sometimes called.

The street crests a hill and runs into a part of the county known as the Mesa, where Family Dollar, Dollar Tree and Dollar General stores all are within walking distance of each other on this busy boulevard also populated by fast-food stores, strip malls, drive-up banks and gas stations.

These are three of the 18 deep-discount retailers that have filled in the gaps as conventional grocers have pulled up stakes in Pueblo County. They offer walking-distance convenience and lower prices than even the four Walmart stores in the area. And it’s evident that Pueblo needs the dollar stores as much as the dollar stores need the southern Colorado city.

The are 18 dollar stores in Pueblo County, Colorado, which has a population of about 166,000 people. Along a stretch of the city of Pueblo’s South Santa Fe Avenue Family Dollar, Dollar General and Dollar Tree are within three-tenths of a mile of each other. (Mike Sweeney, Special to The Colorado Sun)

One of the city’s poorest neighborhoods, Salt Creek, sits along the same stretch of Santa Fe Avenue, near where Colorado Fuel & Iron Company dumped a byproduct known as black slag that created a Superfund site.

Roll a bit farther and Santa Fe turns into the business route of U.S. 50, where migrant and middle class families live near the chile farms for which the area is known. A small grocery store, LaGree’s, one of three in the chain (the others are in Cripple Creek and Divide) serves the area. Just beyond the market, a Family Dollar does brisk business near the town of Avondale, where family grocery stores shut down long ago.  

A couple miles to the north of the Mesa’s commercial strip are Pueblo’s East Side neighborhoods. The sole grocery store there, a Safeway, closed two years ago. Two Family Dollars, two Dollar Trees and two Dollar Generals picked up the slack. One of the city’s main thoroughfares, Pueblo Boulevard, is a patchwork of these dollar stores. A new, much larger Dollar General, offering more frozen foods, opened in early December on the city’s West Side.

Shauna Engle looks through the clearance rack in front of the South Santa Fe Avenue Family Dollar store on Nov. 30, 2018 in Pueblo, Colorado. (Mike Sweeney, Special to The Colorado Sun)

New jobs have been announced in Pueblo County — 200 at Vestas’ wind tower factory, one of the city’s largest employers, and 160 at a proposed new fresh-produce distribution center. And the county’s cannabis economy continues to grow.  But Pueblo hasn’t regained its economic footing in the way other Front Range communities have and many people depend on the proximity of these deep-discount stores to stretch their budgets and meet their basic needs.

Like other communities across the country that are trying to reinvent their once-thriving economies, Pueblo is grappling with how to rebuild a strong economic base that takes into account the necessity of national deep-discount retailers as well as growth from Pueblo-based businesses.  

Unlike other places, such as Tulsa, Oklahoma, and towns in Lake County, California,  where local officials have a more uneasy relationship with the dollar store chains or have passed zoning restrictions against them altogether, Pueblo has looked to these stores as a necessary part of economic development.

The demographics influence business

“How does a community remain competitive and allow a base for any retailer to be successful in the community?” said Chris Markuson, director of economic development for Pueblo County. “We believe it’s two-fold. The first is consumer education about purchasing power. The second piece is growing the median income and the household wealth across the entire community.”

The city champions “made-in-Pueblo” businesses, such as the longtime family farms on the Mesa, the revival of businesses like Walter’s Brewery and Taproom, and new concepts, such as TickTock Pueblo, a pay-as-you-go coffee house and coworking space.

And Markuson pointed to the city’s “Buy Local” campaign to encourage growth of the county’s family farms as well as the independent businesses that have opened or expanded in Pueblo in recent years using the city’s enterprise zone and tax credit program, like the bath-products company Formulary 55 and coffee roasters Solar Roast and Gypsy Java, as well as Pueblo’s success in being a warehousing and distribution hub for national retailers.

“National retail can coexist with local retail,” Markuson said. “The difficulty is at what point are consumers able to choose to purchase things at a local, independent retailer as opposed to a national retailer. A big function of that is how much they’re earning in a paycheck.”

Pueblo’s unemployment rate for October 2018 was 4.6 percent, compared to the state rate of  3.2 percent for the same period. But it’s Pueblo’s poverty rate — 18.2  percent in 2017 (defined as the percentage of people with income below the poverty line of $24,860 for a family of four), compared with the state poverty rate of 10.3 percent — that makes every dollar matter to the area’s poorest families. Pueblo’s median household income was $42,386 in 2017, according to the U.S. Census, compared with the state median income of $65,458 for the same period.

It’s also a city that has generations of poverty entrenched in the community despite other economic forces, according to Anne Stattelman, the longtime former director of Posada, a nonprofit that provides emergency housing and shelter to families.

That’s what these dollar stores are betting on, said Colorado State University, Pueblo’s Abhay Shah, who teaches a course in retail management and is associate dean at the university’s Hasan School of Business.

“Pueblo is a poor socioeconomic area,” he said. “The Family Dollars and Dollar Generals saw an opportunity to come in and offer prices that are lower than a Walmart … Their typical set-up is a small store relative to Walmart, people who work there are paid minimum wage, and their overhead is low.”

Sherry Gomez finishes up a shopping trip at the Family Dollar along South Santa Fe Ave. Nov. 30, 2018 in Pueblo, Colo. Gomez says she shops dollar stores in part because her East Side neighborhood grocery store, Safeway, closed in 2016. (Mike Sweeney, Special to The Colorado Sun)

That’s what keeps Sherry Gomez, who lives on the city’s East Side, shopping at the dollar stores on nearby Santa Fe Avenue.

“I can get pretty much all I need here and up the street,” she said as she loaded bags from the Family Dollar into her trunk. Dollar General and Dollar Tree are within about three-tenths of a mile. “Pretty much anything that I could get at Walmart — and it’s not as overwhelming.”

Though Gomez makes a special trip, or “loop” as she calls it, every week or so to do her shopping, others use the stores because they’re conveniently located on the way home from work.

One of those is Shauna Engle, 50, who lives on the Mesa. “I’ll stop by to pick up something I need when I don’t want to drive all the way into town,” Engle said, as she looked through a rack of clothes outside the store.

Cash-strapped folks “our BFFs”

Dollar stores are the new Walmarts for the poorer rural and city areas, according to Penn State University sociologist Ann Tickamyer, who has studied poor areas of southern Ohio where manufacturing has shut down and many businesses have closed up shop. “The larger phenomenon is that there’s a lot of deprivation and hardship in these areas,” she said. “And they do to some extent provide jobs and cheaper prices.”

Though Dollar General wouldn’t give specifics on how it decides where to open stores and didn’t respond to requests for an interview for this story, company spokeswoman Crystal Ghassemi said in an email that when choosing store locations, “we generally serve customers within a 3- to 5-mile radius, or 10-minute drive. We also take demographic trends, competitive factors, traffic patterns and community concerns into consideration.”

But in a meeting with investors in 2016, Dollar General’s then chief merchandising officer Jim Thorpe called cash-strapped families earning less than $35,000 a year “our best friends forever.” At the time, this one demographic accounted for 43 percent of the chain’s $22 billion in annual sales, Bloomberg reported. The company opened 1,315 stores in 2017 and logged $23.5 billion in sales.

By last summer, Dollar General and Dollar Tree had about 30,000 stores between them, thriving as other retailers founder or reinvent themselves to compete with the small-box discount stores, Forbes reported.

Out on U.S. 50, beyond the farms that produce one of the county’s most valued exports — the green chiles branded with the Pueblo name and stocked by the posh grocer Whole Foods, instead of the more famous Hatch chiles from New Mexico  — you hit Avondale, a small community of mostly working class and working poor, including the many migrants who tend the surrounding farms.

Stores follow U.S. 50 east

On a dirt road turnoff across from Avondale Elementary, you’ll find El Centro de los Pobres and Sister Nancy Crafton, a lay nun and nurse who has been providing food, housing assistance, and medical care to migrants and the poor who come here from all across the state for 30 years.

Sister Nancy, as she’s known throughout the county, is grateful that the dollar stores are here.  

“Anything is appreciated in this climate of extreme poverty,” she said as she greeted and hugged the many people who sat waiting for assistance with bills, with health concerns, or just to check in.

Sister Nancy Crafton, of the Sisters of Charity, shown here in a Dec. 3, 2018, photo, is in charge of El Centro de Los Pobres in Avondale, Colorado. Crafton views dollar stores as a lifeline for the poor when many others often see them as blight. (Mike Sweeney, Special to The Colorado Sun)

“These stores have become our mom-and-pops. Our families only have very limited dollars, so if they are able to buy the tools to fix a car battery or windshield, artificial flowers for their shrines or to commemorate someone passing, and especially a small toy for a dollar for their children, these stores are serving a need for them in this diminished economy.”

Dimas, 38, who goes only by his first name, helps Crafton and her volunteer staff gather and organize the boxes of food, clothes, and personal care supplies donated by area churches, restaurants and grocery stores. Once a landscaper, he was injured in an ATV accident that left him unable to walk without pushing a walker.

He said he depends on the nearby dollar stores for basics: eggs, bottled water, beans, dish detergent, toothpaste.

“I also get my phone cards there,” he said, adding that he sometimes sends boxes back to Honduras.

Dimas, shown here at a Pueblo, Colorado, Dollar General store along South Santa Fe Ave. Dec. 3, 2018, shops dollar stores weekly. A former migrant worker, he was disabled in an ATV accident. (Mike Sweeney, Special to The Colorado Sun)

On a recent day at the Dollar General, he loaded up his cart with a case of water priced at $3.50; a 64 oz. bottle of dish detergent, $1; two large cans of menudo for $3.50 each; a new toothbrush at $1; and a 12-pack of Coke marked three for $10. “I also buy cleaning stuff here when I need it,” he said.

Like Sherry Gomez on Santa Fe Avenue, he makes the dollar store loop when he can get a ride, since his injured legs don’t allow him to drive.

“I go to them instead of Walmart,” he said. “I can get a lot more.”


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