February 9, 2015

By José Bravo and Frank Knapp Jr.

A full 81 percent of dollar store products tested in a new advocacy report contained at least one hazardous chemical at a heightened level.

Sometimes it feels like there’s a Target or Walmart around every corner — and rightly so in many areas, because at last count nearly 6,000 of them were sprinkled across the U.S.

While that may seem like a sizable amount, consider this: There are roughly 24,000 dollar stores, and that’s just counting the Big 3: Dollar Tree, Dollar General and Family Dollar.

With such a pervasive presence, it should come as no surprise that in many neighborhoods and communities, dollar stores are often literally the only store selling household goods, including food.

A new report (PDF) about toxic chemicals found in dollar store products, published by environmental justice initiative the Campaign for Healthier Solutions, found that that 81 percent of the products tested — or 133 out of 164 products — contained at least one hazardous chemical above levels of concern.

These chemicals include:

– Phthalates, linked to early puberty in girls, birth defects in the male reproductive system, obesity, diabetes and other health issues

– Polyvinyl chloride (PVC or vinyl), which creates hazards throughout its life cycle and has been linked to asthma and lung effects

– Toxic metals, such as lead and chromium, which harm brain development and can lead to learning disabilities, lower IQ and other serious health impacts, especially in children

All of these exposures are compounded by the fact that 40 percent of sales at dollar stores go toward food products, most of which are highly processed with low nutritional quality and for which packaging is another potential source of toxic chemicals, such as bisphenol-A (BPA).

Low prices, big impacts

So who’s buying the perilous products stocked by dollar stores?

According to Morningstar analyst Michael Keara, 40 percent of dollar-store-sector customers rely on some form of government assistance — a population of people, along with their children, that are already disproportionately impacted by toxic chemicals.

The adult consumers of dollar stores are also the employees of businesses in their communities. To the degree that the products sold in these stores are not in compliance with federal regulations and contain toxic chemicals, these stores are contributing to unhealthy workers and thus lower employee productivity for local businesses. As a result, other local businesses and the public are incurring greater costs and subsidizing the profitability of the dollar store business model.

The new $8.5 billion merger of Dollar Tree Stores and Family Dollar Stores is an opportunity for one of the largest retail operations serving low-income consumers to make sure its products are safe and to not add more harm to the legacy of toxic chemical exposures that already exists in these communities.

Dollar Tree is already aware that toxic chemicals in products are affecting communities that they service, and since 2005, the company has engaged in some product testing for BPA, phthalates, PVC, lead and cadmium. According to the company’s 2013 sustainability report (PDF), it is “working on ways to reduce or eliminate the use of PVC in products and packaging.”

Still, the company is falling behind the efforts of other major retailers who have begun to take action to move towards safer products.

For example, Walmart has a new corporate policy on chemicals that will provide expansive ingredient disclosure for consumers and it plans on eliminating 10 toxic chemicals from its product lines. Similarly, Target recently launched its “Sustainable Products Standard” (PDF), an incentive program that will rank and score products based on ingredients, packaging, testing and impact on water quality to empower consumers to make safer choices.

These major retailers and many other businesses of all sizes are proving that selling products free from toxic chemicals is not just the right thing to do — it is possible, and it increases profitability by meeting customer demands for healthier and safer products and avoiding unnecessary costs and liabilities.

Managed incorrectly, chemicals of concern in products and supply chains can lead to lost market share, tarnished brand reputation and significant fines. And that’s in addition to other mounting supply chain risks, from resource scarcity to volatile weather, that forward-thinking companies increasingly are moving to address.

As an example of the costs that can stem from hazardous chemicals, an Environmental Protection Agency administrative law judge in 2010 ordered 99 Cents Only to pay $409,490 in penalties for the sale of illegal unregistered and misbranded pesticides contained in household products. Dollar stores would do well by their customers and their shareholders by doing better to keep up in this evolving landscape.

Organizing for action

In order to facilitate a transition away from dollar store products infused with dangerous chemicals, The Campaign for Healthier Solutions, a new coalition of over 100 parent, health, and community organizations that launched Feb. 4, is calling on dollar stores to follow the lead of other major retailers and to work with community and health organizations to replace hazardous chemicals.

Safer products are increasingly available, along with resources to help identify and transition away from toxic chemicals. A few key concepts:

– Major retailers have taken significant steps to replace toxic products with safer alternatives, meaning an increasing supply of “safer” products on the market is available to dollar stores.

– As major retailers (and dollar stores) opt for “safer” products, the cost per unit will be reduced due to manufacturing efficiency.

– Robust systems and tools are available to identify toxic chemicals and safer alternatives in products; these can save dollar stores the expense of developing analytic methods.

Dollar stores are poised for a potentially giant leap toward giving the most disadvantaged families and workers among us access to household goods, children’s toys and foods free from harmful chemicals.

Shareholders battled over the Dollar Tree-Family Dollar merger. Now it’s time to make the business even more of a success by providing safer products for customers and lowering health and associated cost burdens from avoidable exposures to hazardous products.

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