Streetsblog New York City

I am for whatever is best for the consumer.

Competition is always best for the consumer. Insulating businesses from competition does not.

Competition results in lower prices, greater choices and better services. Insulating a business from competition leads to taking the customer for granted and neglected product lines.

But established businesses like keeping other merchants away from their customers, and politicians like their campaign contributions!

Any business that needs to rely on the coercive exercise of government power to keep them in business ought not survive.

I agree with the general sentiment of Chipseal. However, I think we also need to be cognizant of how government also subsidizes larger companies, both directly and indirectly. We shouldn't ban chain stores from areas, but at the same time, we need to consider how larger stores and companies receive preferential tax treatment and also many times have public infrastructure built for their needs. Everyone would have to agree that building giant highways and parking requirements are an indirect subsidy to big box stores to the detriment of local, downtown-based businesses. At the very least, we need to develop systems where smaller companies are not at any major disadvantage other than those that naturally come with their lack of economies of scale and expertise.

We also have to remember that Wal-Mart has not really succeeded in true downtown settings (yes, there are examples, but mostly not). The infrastructure of a true downtown is mostly incompatible with the large-purchase-which-you-take-to-your-large-SUV-in-free-parking-lot shopping/business model.

Yes, places like Starbucks and Old Navy will come into downtowns. It is the responsibility of individual business owners to differentiate their store from the national chains. The local stores that successfully differentiate their products and services and develop the right market niche will be successful.

- Keith

In response to ChipSeal - I agree that competition sorts out a lot of issues, but we can't confuse low prices with the true cost. Many things we can get cheaper at WalMart, but those prices don't reflect the true cost of the goods - e.g. how much of those dollars leave the local economy (or leave the country), environmental costs etc. It may be cheap to buy now, but somewhere down the road we pay.

I also agree with J:lai that much of this issue with chain stores is asthetic and neighborhood character.

Definitely not a black/white issue and has to be thought about differently for every community.

There is a fundamental economic issue involved:

Big box stores charge lower prices to the consumer, but they create greater external costs (greater environmental and social costs, such as more automobile trips and less cohesive communities).

Consumers decide where to shop based on the cost to the consumer, and they generally ignore external costs.

Therefore, big box stores will displace local stores even if their total costs (counting external costs as well as the cost of merchandise) are greater than the total costs of local stores.

Why should on go to a different city and find the very same (chain) stores that you have in your city? Ditto for going to a different shopping district or mall. You want to see different stores.

Same as going to Russia and finding a McDonald's there.

Sorry, I want something different.

Back in the day, it was proven -- by studies of opponents -- that people were driving to the suburbs to shop at these national chains, instead of shopping locally. Why is it that they shouldn't locate in the city, where city residents can have the jobs and tax revenues?

The local merchants wanted new buildings for local stores restricted. They claimed they wanted the national chains on their local streets, to attract customers there. National chains started showing up on local commercial streets. Then local merchants complained about being priced out. Then the total amount of retail space expanded, and vacancy went up. Local landlords complained about city policy, instead of cutting their rents, and local merchants blamed bike lanes.

The local merchant is the one that's easiest to get to.

I suspect that cities lose some of their comparative advantage when they give big box stores unfettered access. Distinct local culture and commerce can be an attraction to tourist, knowledge-based workers and businesses, and prospective residents.

Richard Florida has written about how important diversity, street art and culture are to high paid knowledge workers, that these workers gravitate to cities like San Francisco and Austin for their vibrant "scenes". Rebecca Ryan's book Live First, Work Second talks about how Gen Y workers seek a cool city to live in first, then figure out how support themselves once they get there. Big Box stores are not part of what makes a city cool.

From the perspective of a city, letting big box stores in may be a stupid move financially. The more you look like other cities, then the less reason residents, businesses, tourists have to come or stay there. Unless, that is, you give big incentives or tax breaks. This can add to what already is a race to the bottom among cities who compete for relocating businesses.

From the perspective of Florida and Ryan, the smarter strategy may be to foster diversity, a rich local culture, and livability so that folks have a reason to come and stay. The issue isn't so much about big box stores or not or free market or not. It's about cultivating distinctiveness so cities can compete in the global market for tourists, workers and businesses.