Retail Dive, April 21, 2015
Jersey City, NJ’s planning board earlier this month overwhelmingly approved a measure to limit chain stores in an effort to preserve the town’s downtown character. “Mom-and-pop-type retailers protect that and foster that [character] and encourage that,” Mayor Steve Fulop said.
The move, which now goes to the City Council for approval, would limit chain stores from setting up shop in ground-level spaces in certain locations downtown. The limits affect retailers and restaurants with “multiple locations within the region that exhibit standardized characteristics such as logos, menus, store decor,” among others. Such chains could occupy a maximum of 30% percent of ground-floor commercial space downtown.
The measure isn’t all encompassing — areas on the waterfront are exempt and chain grocery stores aren’t included. But Fulop says he’d like to see the restrictions go wider. Businesses, not surprisingly, objected, saying it was government overreach and bad for the city.
“We totally are obviously supportive of a vibrant, independent retail sector in the city, but to artificially try to control market forces is troubling,” said John Holub, president of the New Jersey Retail Merchant Association.
Here, Retail Dive takes a look at some of the reasoning behind these restrictions, which aren’t really new, and how retailers both big and small can actually work within them.
The case against ‘sameness’
Jersey City’s measure isn’t revolutionary. Rather, it’s just one example of one approach of how one town has moved to protect its streetscape identity. As many downtown cities enjoy renewed prosperity in recent decades, they’ve made many moves, like tax credits and various limitations against chains, that planners see as preserving unique characteristics and smaller home-grown businesses.
“Chain store proliferation has weakened local economies, eroded community character, and impoverished civic and cultural life. Moreover, consolidation has reduced competition and may harm consumers over the long-term,” Institute for Local Self-Reliance co-director Stacy Mitchell said in a 2000 speech. “Contrary to conventional wisdom, the decline of independent businesses is not inevitable, nor is it simply the result of free market forces. Rather, public policy has played a major role, particularly through tax incentives and other development subsidies that give national chains a significant advantage. Meanwhile, a growing number of communities are taking a different approach. They are adopting land use rules that deter chain stores and actively encourage local ownership.”
San Francisco is the largest city in the country so far to institute such rules. The city defines a chain as businesses with at least eleven stores nationwide and standardized logos, designs, and merchandise, what proponents of these rules often deride as “sameness.”
The rules have given the city’s neighborhoods an opportunity to hold on to their distinctiveness. It’s not that chains can’t have their eleventh store in San Francisco, but companies do have to go through a public process to argue the benefits their stores would bring to the area.
The ideal town feel
In the end, it’s a rare community that strictly bans all chains from its downtown, no matter how historic or quaint. Even cities and towns that put a premium on their sense of place benefit from having a mix of local and national retail establishments that reflect a healthy economy and give residents and visitors a variety of reasons to hang out.
“Ideally, a community should have a healthy mix of independently-owned local, quality businesses, as well as some revenue-generating chains,” writes Rosabella Alvarez-Calderon, an expert in the “negotiated urban landscape.” “Ultimately, though, it all boils down to a simple question: how does a community define economic and social ‘success?’”