Thursday, September 17, 2009

I just don't see the problem

There is no question, the retail environment is nothing like it was when are parents were growing up. In fact, it's completely different from when I was a kid. Fifty years ago, a large percentage of shopping was done at locally owned and operated businesses. If you look at almost all of the small towns across America, "down town" was the center of almost all commerce. As years passed, business experts discovered that manufacturers and suppliers were willing to give discounts to retailers who agreed to purchase large quantities of their products. This led to the birth of the franchise. It is because of these arrangements that the number of retail chains exploded. Looking back, I'm sure these retail chains weren't terribly popular with locally owned businesses nearby.

Since the world of retail is in a constant state of flux, even the most successful retailers have had to make frequent changes in order to compete in the global economy. Fast food chains are constantly changing the appearance of their buildings, their menus and their incentives to keep the customers coming. Insurance companies and airlines have spent billions in advertising and "perks" in order to compete. But it wasn't until the emergence of the big-box retailers that many small town business owners began to speak out.

The "big box retailer" concept really isn't very old. However, most consumers can't remember how they ever survived before them. Because of their growing popularity, the number of businesses have adapted to that big box retail model keeps growing. In fact, one chain in particular, has built so many stores that in many cases, their only true competition happens to be one of their own stores on the other side of town. Competing with yourself may seem like a silly thing to do but if you think about it, if you are going to lose business to someone, why not lose it to yourself.

On the dark side of big box retailing, some claim that big box retailers do more harm than good to the communities they inhabit. Many documentaries have been filmed that attempt to prove these retail giants are harmful by showing images of local businesses have been forced to close citing their inability to compete. Some opponents claim harm even when one of these retailers builds a larger store down the block. They claim harm by suggesting the closing of one location and opening a larger store down the street does grave harm to other retail establishments in the shopping center where the old store used to be. Joining small business owners in the fight against big box stores is the afl-cio. The reason they are involved is because most of the big box retailers in the country have found that there is really no need for third party representation. Most have made commitments to their workforce that eliminate that need.

Some argue that big box retailers cost jobs. How so? When a big box retailer comes to town and a local grocery store is forced to close their doors, the number of jobs lost when that local business closes averages between 35 and 40 workers. However, the new big box retailer will likely employ ten times as many people. Others claim that shopping at a national chain takes money away from a community. I say not true. Many national chains make huge contributions to local government as well as community based non profit organizations. Those contributions consist of tens of thousands of dollars each year.

As far as I'm concerned, people can fight about this subject all they want. To be truthful, I can see both sides to this argument. But, when the dust settles, it all boils down to one simple fact. What is the best way to spend my hard earned paycheck. Isn't it a no-brainer? The best way to spend my paycheck is to find a way to get the things you need and pay as little as possible to achieve that. Our economy continues to struggle. As a result, almost all Americans have had to make some tough choices. I think we'd all like to be able to buy all our groceries at our corner grocery store, but I can buy the things I need for less money at the chain store, you bet that's where I'm going to go.

It is sad to see local businesses close their doors. But unfortunately, that plan was set in motion more than 50 years ago. It wasn't until big box stores came to town that small businesses were dealt the death blow. Looking in the other direction, I predict the time will come when these big box stores will find themselves in the same place the small business owners are in today. When they do, they are likely to make the same arguments that the small businesses are doing today. When that happens, it's not going to be the fault of this next best thing in retail. It's going to be the fault of the customer, just like it is today. Big box stores are only as successful as the customers that shop there.