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Battle of the Boxes

| Written by ILSR Admin | No Comments | Updated on Mar 6, 2013 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/battle-boxes/

Jackson Free Press, March 6, 2012

If there’s one thing Mississippians love, it’s their discount stores. Jackson politicians went all aquiver back in January when the news hit of Sam’s Club imminent departure from its north Jackson location to, presumably, cushier digs in Madison.

The rumors and political fur began flying almost immediately. The building had structural problems, WAPT reported. Ward 1 Jackson City Councilman Quentin Whitwell blamed the move on a lack of communication between Walmart and the city government.

“To me, it would only be right for a company of that magnitude to reach out to me as a council person, to the mayor or his office to see what accommodations we might could potentially make to keep them there or what their future needs are,” Whitwell told The Clarion-Ledger.

“To pull the plug on the city of Jackson without having conversations with the city of Jackson officials would be a PR nightmare for them.”

Sam’s, a Walmart spinoff that sells wholesale goods to its members, is taking $200,000 in annual Hinds County property taxes when it goes. Also moving from the same vicinity is a Haverty’s Furniture store. Reportedly, the now-empty Circuit City building on East County Line Road has signed on a new national retail company, but those plans are still under wraps.

The city is using financial incentives, including bonds and tax exemptions, to try to lure more businesses into the city, but it’s a long, hard process. The condition of the city’s infrastructure doesn’t make the job any easier.

…snip….

“Walmart is constantly abandoning its existing stores to open stores in the same market area–sometimes the next municipality over, sometimes a mile down the road, sometimes across the street,” said Stacy Mitchell, a senior researcher with the Washington, D.C.-based Institute for Local Self-Reliance. Retailers are on a merry-go-round to be in the latest, greatest new shopping area.

“It’s generally because they want to build a newer, bigger outlet. Apparently, it is more advantageous for them, financially, to abandon an existing location and develop a green field than it is to expand at that location–or repair or update. Generally, their approach is just to move on. … It comes at an enormous cost to the community, because now you’ve got these vacant structures that are very hard to redevelop.”

…snip…

The real question for cash-strapped cities like Jackson is whether big-box stores are worth the money, time and effort to get them to set up or stay. With few exceptions, big-box retailers may actually do more harm to a struggling economy than good. Yes, the stores provide some jobs, but they don’t pay well (on average, about 12 percent to more than 14 percent less than other retail jobs), and most don’t offer benefits such as health insurance or retirement savings plans.

Evidence from numerous studies suggests that the chain-store wages depress pay in surrounding communities, and their low, low prices and aggressive market-share grabs put local competitors–those who don’t have the benefit of a chain’s volume buying–out of business.

Worse yet, workers making those low, low wages often look to public sources to supplement their incomes.

“Walmart workers make greater use of public health and welfare programs compared to retail workers as a whole, transferring costs to taxpayers,” report the authors of “Living Wage Policies and Big-Box Retail,” a 2011 report from the University of California, Berkeley’s Center for Labor Research and Education.

The “Walmart economy” has contributed greatly to the demise of the middle-class, Mitchell said, pushing more and more people to becoming the working poor. “We’re all indirectly paying for that,” she said.

…snip…

Whole Foods has a program supporting local growers and purveyors of other local foodstuffs. Just last month, the store held a vendor open house at the Mississippi Agriculture and Forestry Museum. Horgan said about 50 to 60 vendors attended, running the gamut from local farmers to soap makers. Whole Foods likes to put on these events especially before it opens a new store, but Horgan said it will hold them periodically going forward. During the events, buyers explain what the store’s standards are.

“If you have a good solid product and it meets our quality standards, our buyers try it,” Horgan said. “It’s not a very difficult process.”

Mitchell isn’t so sure Whole Foods offers local options because of demand.

“Whole Foods uses local goods for wallpaper,” Mitchell told the JFP last year. “Then they’ll price it substantially higher than other products.”

With its huge demand for foods to stock its more than 340 stores, it also pushes its national house brands, though its commitment to offering local foods is far better than other national chains, such as Kroger or Walmart.

“There really isn’t a sweet spot” for a percentage of local over house-brand foods, Horgan said, adding that the types of products and seasonal availability are only two of the factors involved in stocking regional varieties. “Local is something people want. It offers us more choice in the market. … It’s more about choice for customers. … Our customers tell us what they want.”

The chain also has been known to buy up or push local markets out of business–especially those that focus on natural and organic foods, such as Rainbow Whole Foods Cooperative Grocery in Fondren. It happened in Mitchell’s hometown of Portland, Maine. That’s not good in a city like Jackson where many neighborhoods have already lost ready access to full-service grocery stores. The problem becomes more acute when low-income shoppers can’t afford what a trendy, upscale store has to offer.

“Go with your strengths,” Mitchell said.

Fixing Jackson’s economic problems will take local people working together. Focus on neighborhoods, historical districts and unique, urban ambiance that suburban sprawl can’t offer, Mitchell advised. Learn the lessons other localities have already learned.

“We really need to focus on growing smaller businesses. That’s got to be part of the long-term solutions.”

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Top 10 Reasons to Shop Local

by Stacy Mitchell

The following comes from the Institute for Local Self-Reliance (www.ilsr.org), a national nonprofit organization working to strengthen independent businesses and local economies, and is reprinted here with permission.

  1.     Local Character and Prosperity—In an increasingly homogenized world, communities that preserve their one-of-a-kind businesses and distinctive character have an economic advantage.
  2.     Community Well-Being—Locally owned businesses build strong communities by sustaining vibrant town centers, linking neighbors in a web of economic and social relationships, and contributing to local causes.
  3.     Local Decision-Making—Local ownership ensures that important decisions are made locally by people who live in the community and who will feel the impacts of those decisions.
  4.     Keeping Dollars in the Local Economy—Compared to chain stores, locally owned businesses recycle a much larger share of their revenue back into the local economy, enriching the whole community.
  5.     Job and Wages—Locally owned businesses create more jobs locally and, in some sectors, provide better wages and benefits than chains do.
  6.     Entrepreneurship—Entrepreneurship fuels America’s economic innovation and prosperity, and serves as a key means for families to move out of low-wage jobs and into the middle class.
  7.     Public Benefits and Costs—Local stores in town centers require comparatively little infrastructure and make more efficient use of public services relative to big box stores and strip shopping malls.
  8.     Environmental Sustainability—Local stores help to sustain vibrant, compact, walkable town centers-which in turn are essential to reducing sprawl, automobile use, habitat loss, and air and water pollution.
  9.     Competition—A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term.
  10.     Product Diversity—A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.

Read the full story here.

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