STEVE INSKEEP, HOST:
Now we have a story of a brick-and-mortar retailer that is succeeding. The Internet is hammering many, of course, but with some exceptions, independent bookstores have seen growing sales. And then there's Dollar General, thriving in rural communities. Frank Morris reports from our member station KCUR.
FRANK MORRIS, BYLINE: The last grocery store in Cawker City, Kan., closed a few years ago, leaving folks here six miles from the nearest place to buy food. But things are looking up.
UNIDENTIFIED WOMAN #1: Nine-fourteen, please.
MORRIS: Linda Clover says this new Dollar General offers sustenance, household goods and companionship.
LINDA CLOVER: It's a place where you go and see your friends and people from other towns around. Everyone calls it the Cawker City mall (laughter).
MORRIS: If you've never been to one, Dollar Generals are basically little discount stores stuffed with inexpensive items. It's the biggest of the so-called dollar-store chains, and Chris Merrett, who heads the Illinois Institute for Rural Affairs, says it's the one transforming the rural landscape.
CHRIS MERRETT: For many communities, it's the first new commercial investment in many years, and it represents progress of a sort.
MORRIS: Dollar General is set to open a thousand stores this year, pushing its total past 14,000 more outlets than McDonald's has in the U.S. That includes plenty of urban locations, but the chain's bright yellow-and-black signs have sprouted every 10 miles or so along some remote state highways. Dollar General got its start in small-town Kentucky, so, like Walmart, it's got rural DNA. And Al Cross, who runs the Institute for Rural Journalism at the University of Kentucky, says Dollar General competes with the world's largest retailer on price and convenience.
AL CROSS: They serve a big part of the country that Walmart doesn't serve directly. You have to maybe drive 20 miles to get to a Walmart. You might only have to drive five miles to get to a Dollar General.
MORRIS: Dollar General refused to comment for this story. But retail analyst Mike Paglia says the chain succeeds by selling everyday items at recession-era prices.
MIKE PAGLIA: In a lot of rural areas, times are still very, very difficult, and a lot of shoppers are still struggling to get by.
MORRIS: Even before the recession, it was tough to run a store in rural America.
KENT BAKER: Half the grocery stores in Iowa closed between the years of 1995 to 2005. Half of the grocery stores in this state closed.
MORRIS: Kent Baker publishes the weekly paper in tiny Moville, Iowa. His front windows look across Main Street at a block of empty buildings. But when Moville lost its grocery store, townspeople fought back, donating $600,000 worth of cash and property to build a new one.
UNIDENTIFIED WOMAN #2: Five-thirty-five.
MORRIS: Chet Davis manages Chet's Foods.
CHET DAVIS: We were doing real well. We were making a profit, and we were keeping our customers satisfied. And then in come Dollar General.
MORRIS: Right next to the grocery store. Davis saw his sales plunge. He may have to close, though this store does have devoted customers like Brian Paulsen. He's buying frozen pizzas and likely paying more than he would next door because he wants to support this store.
BRIAN PAULSEN: So use it or lose it. It's like all the rest of the small towns. They never use theirs and theirs are gone, and I'd rather come here than Dollar General.
MORRIS: But even Kent Baker, who helped save the grocery store here, admits that Dollar General offers items that people haven't been able to buy in this town for decades. And ultimately, it's consumers who will decide whether all that Dollar General brings to rural America is worth what it likely takes away. For NPR News, I'm Frank Morris in Moville, Iowa.