US government stats report the national average cost for a gallon of milk is over $3 so any large retailer selling it for a buck a gallon is using it as a loss leader to draw folks into the store. And for more anecdata, our local DG runs $1 and $2 gallon milk sales frequently for the same reason.
I've not been making much lately, and at my last place I actually drew up a spreadsheet of a couple dozen staple groceries that I buy regularly and noted their standard prices at the four stores nearest to me. It was quite useful in deciding when to shop nearby and when it was worth making a longer trip.
