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Tuesday, 30 January 2007 14:59 |
By JIM GENARO
Though the growth of "big box" corporate chain stores over the past 20 years has devastated smaller, independent retailers, there is some indication that the tide is starting to turn, according to writer and activist Stacy Mitchell.
The author of "Big Box Swindle: The True Cost of Mega-Retailers and the Fight for Americaës Independent Businesses" spoke at the Crowne Plaza Resort last Thursday evening. About 50 people attended the talk, which was sponsored by the Mountain Voices Alliance, the Coalition of Asheville Neighborhoods and others.
The
impact of large corporate chains can be particularly hard on small,
family-owned businesses, Mitchell said. She told of one hardware store
in Carlyle, Penn., that went out of business after 72 years when the
town approved new Home Depot and Loweës Home Improvement stores.
When Mitchell
asked the businessë owner ÇƒÓ the grandson of its founder ÇƒÓ what the
hardest part about closing was, he replied, "It was letting down the
employees."
She added, "Some of them went back 40 years. They were hired by his grandfather."
However, the
impact of the corporate chains did not end there, Mitchell noted.
"There was this ripple of negative effects that happened within the
local economy. Small businesses spend locally." Chains, on the other
hand, generally spend their earnings elsewhere, she added.
Studies have
shown that on average, $65 to 85 cents of each dollar spent at a chain
store leaves the local economy, as opposed to about 50 cents of each
dollar spent at a locally owned business, Mitchell noted.
The growth of big-box stores in recent years has driven countless smaller retailers out of business, she said.
"The kind of consolidation that we have seen in the past 15 years is really unprecedented in history," Mitchell added.
She noted that
during that period, the U.S. has lost 5,000 independent hardware
stores, while Home Depot and Loweës have expanded their market share to
make up roughly half of all money spent on hardware in the country.
In the realm of
bookstores, the figures are even more dire, she said, as half the
independent bookstores in the country have gone out of business since
1992, while Borderës and Barnes & Noble have come to dominate the
book market.
And at the top
of the retail pyriamid stands Wal-Mart, which takes in one-tenth of all
the money spent in reatil stores in the country, Mitchell told the
audience.
"We tend to see
this trend as progress," she noted. "I think there is a lot of evidence
that these stores take more out of our local economies than they put
back in."
Among the
peripheral effects of these trends is the impact it has on related
businesses, such as small banks ÇƒÓ which typically depend heavily on
small business loans to local reatilers ÇƒÓ and independent newspapers.
"As the local stores closed up, they lost a lot of ad revenue," she said of local newspapers.
Furthermore, the
chain stores cut costs by buying most of their products from companies
who employ overseas labor, eliminating countless manufacturing jobs in
the U.S., she noted.
Many companies,
such as Black & Decker, that at first fought the demands of
Wal-Mart and other retailers that they move their operations overseas,
eventually acquisced, as they could no longer compete with similar
products that were made in countries without wage restrictions and
health benefits, Mitchell said.
This process has
undermined the "long-standing pillars of hte American middle class ǃÓ
particularly for those who donët have access to higher education," she
said. "Those pathways are being increasingly cut off."
While
researching the impact of corporate chains for her book, Mitchell said
she began to recognize the pattern of these companiesë development.
"It finally
dawned on me that what this most looked like as an economic model was
the old colonial model of the European empires."
American towns have become "colonies of global corporations, essentially," she said.
Mitchell cited
the results of sociological studies that compared two sets of towns
that were similar in size, demographics and economic levels. However
one set consisted of towns that had a number of large, chain stores and
the other set consisted of towns with primarily locally owned
businesses.
The towns with more local businesses had less crime, greater home ownership and less income disparity, she noted.
"Thereës a lot to be said for the involvement of local businesses in our communites," Mitchell added.
However, beyond
the direct effects of local companiesë participation in civic life,
having more localized economies means that people interract more with
their neighbors and get to know their communities better, she said.
A store the size
of a Wal-Mart Supercenter caters to a customer base that often extends
far beyond the town where it is located. As a result, Mitchell argued,
customers are much less likely to get engaged in conversation with
someone from their neighborhood while shopping there.
Furthermore, the
environmental impact of such businesses is profound, she said. Since
1990, the total amount of retail store space per capita in the U.S. has
doubled, Mitchell noted.
However, she
added, "the land binge involved in that is even worse that than that
suggests," because that figure only addresses actual retail floor
space. It does not account for the two to three times as much land that
is used for parking.
One impact of
big-box stores is that people typically drive more to do their
shopping, she said. Since 1990, the amount of driving Americans do for
shopping has increased by 40 percent, Mitchell noted.
This increase represents 100 billion extra miles per year ÇƒÓ or 40 million metric tons of carbon dioxide emissions, she added.
"Itës easy to
get hypnotized by the idea that big-box stores are somehow more
advanced," Mitchell told the audience. "But we lose track with what
weëve lost."
Another
disturbing effect of the proliferation of big-box bookstores is the
impact it has on free speech ÇƒÓ particularly when it comes to ideas
that challenge the claims of large corporations, she said.
Mitchell noted
that she had a hard time finding a publisher for her book. She was
repeatedly told, "ǃÚWe canët touch this because itës critical of our two
biggest customers ÇƒÓ Barnes and Noble and Borders.ë They essentially
said that point-blank."
Nonetheless, a number of communities have started to combat this trend ÇƒÓ with some success, Mitchell said.
As a result, the
net loss of independent businesses has started to slow. More than 100
independent book stores were started last year, she noted, though this
does not outweigh the number that have closed.
Furthermore,
"lots of communities around the country are reorganizing their planning
and zoning ordinances around this issues," she said.
More than 200
such communities have organized and defeated proposals by corporate
chains to build new big-box stores in their towns.
In the town of
Damoriscotta, Maine, for instance, a proposed Wal-Mart Supercenter was
defeated when a grassroots campaign was launced to limit the size of
any retail outlet within the town limits. The measure was approved,
despite a $100,000 media campaign by Wal-Mart to oppose it.
"Weëre still
losing more than weëre gaining," Mitchell told the audience. But such
efforts are "increasing awareness" about the risks of corporate chains.
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