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_______________ Recent Posts: Noodles & Company. Yawn. Christian Music Today, Part One
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Thursday, December 08, 2005
Put your money where your mouth is ...
I had no idea anyone would care much about the Noodles & Co. post below, but it seems to have touched a small nerve of a few of us, for better or for worse.
 While there are many reasons to have a serious problem with the corporatization of our campustown, I originally began my dislike with the sober realization that corporate box restaurants are boring. No big political agenda point there. Just boring. A yawn, if you will. It also struck me as odd that a local weekly, which prides itself on being a "connection to the community" would so blindly endorse this new wave of businesses owned and managed by people in far away places like Boulder, Colorado and Seattle, Washington. I guess that shouldn't surprise me much, since weeklies need to make money and all, but it is still disappointing. Especially considering the wonderful, progressive, and culturally engaged weeklies people in, say, Boulder and Seattle get to read. But now I find, mainly from e-mails, that I am not alone. It turns out there are a lot of people out there who scratch their heads every time one of these boxes opens up. They probably ask themselves the same questions I ask myself. Mainly, "who said that was ok?" And, "what is that going to do to ________ business that I love so much?" (for the record, my concern with Noodles & Co. is the unfair competition they will create for Ar Ri Rang, and my concern with Chipotle is La Bamba. Starbucks will, I'm sure, have it's target on Paradiso, Kopi, and Espresso).  So what to do? Today during 2nd hour I taught the kids about the Stamp Act Riots. A seminal event in the lead up to the revolution, these riots crystalized dissent in the colonies over (essentially) the unfair business practices of the monarchy. As I showed the kids the paintings of the riots, the sacking of the Governor's house, and the propaganda that was created, it occurred to me that the word boycott is relevant even today. We must do something to stop the flow of our money out of this town. Every burrito bought at Chipotle is $7.00 that travels back to Boulder. Every book bought at Borders is $20.00 sent back to Michigan. So here's what I will do. I am taking this pledge: 1. When I buy a book, I will buy it from Pages for All Ages. No exceptions, anytime.Ok, I have to stop. You get the point. For the record, I don't really care what anyone else does about corporatization. It's none of my business. Personally, I have prayerfully considered my options here and it does feel sinful to me to continue to patronize these businesses. Cities like Chicago, Seattle, or Boston (even Boise!) may be able to sustain independent businesses next door to big boxes. For our town, I am not convinced. So this is what I shall do. It aint much, but it's my share. I'll shut up now.  
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30 Comments:
I can't feel that La Bamba is a victim. interesting history there
Good point, Anon#1. Local isn't necessarily honorable.
Foleyma, it seems to me that what you object to about "corporatization" is that money leaves the area. There are apparently quality issues, but there are plenty of locally owned places to dislike for that, so I presume that is a secondary issue.
It might be interesting for you to ask your class to track where a spent dollar goes. That's why we're not part of England today, right? We didn't like where our money was going.
For example, if you buy a box of light bulbs at Wal-Mart for $2 and they would cost $2.50 at a local hardware store, with the Wal-Mart purchase, you've just kept $.50 in the local economy. Perhaps Wal-Mart makes $.20 (you can lookup their average margin at finance.yahoo.com) and the local store, presumably less efficient (after all, there must be a reason Wal-Mart has grown) generates a profit of $.10. But call it $.25.
Still, the light bulbs purchased at Wal-Mart have resulted in $.50 kept in the local economy and the local store keeps $.25 here.
I happen to like shopping local stores for a variety of reasons. Keeping money in the local economy isn't one of them.
to anon #2-
Thank you for posting- and thank you foleyma for keeping the discussion rolling.
Surely there is a greater issue at stake here than bottom line profit. That we are conditioned as a society to accept the bottom line as the hard reality is, of course, quite true.
Let's assume you are right, though (although I am by no means convinced) and the presence of corporate entities such as Wal-Mart keeps more money in the community (actually that sounds so absurd to say that I have suddenly gone from not convinced to absolutely sure that must be wrong).
So...more money in our community. More pocket change. The economy grows. More chains 'one-stop shopping' malls move in, the cycle continues. We continue to save money and cycle more money through our community. It is an economic windfall, a fiscal boon for all.
Eventually of course our community lacks entirely anything that smacks of local flavor or indeed anything that does not come with a national logo branded onto it. The traffic is abysmal of course since the large sprawling shopping complexes are hardly readily accessible by any other means. Noise and air pollution grows, etc.
In short, I am economically enriched and culturally vapid. This summarizes for me the direction this country has been heading for some time.
Money, it must be remembered, is not actually the driving force in this or any country. Money remains nothing more than a tool-
and the wealth of a community is not for me the correct means to measure health. There are communities in this country that are fabulously wealthy and also amazingly corrupt ethically. Likewise there are relatively poor communities where one knows and trusts one's neighbor and people have far more fulfilling (imo) lives.
I am not suggesting that money is irrelevant but for the sake of this discussion the point I want to make is this: Even if it meant more money _leaving_ this community I would still not support Wal-Mart and its kin because I value diversity and local-owned businesses for their own sake. I think it is a given that these local businesses cannot compete with these larger chains and thus it is up to us as citizens to take charge of the community- I can think of nothing more intrinsically American than citizens cooperating to achieve their desired aims- and so I commend foleyma for his almost New Year's resolution and hope that my neighbors in C-U might exhibit similar discriminating tendencies when they go about their business.
So, final thought: If we want a good community that is unique, personable, and owned (ultimately) by our neighbors- it may cost us something. And it would be worth it.
My rule of thumb for businesses I frequent:
locally-owned and politically like-minded owners
locally-owned
corporate companies that are "blue"
Whatever else I need that I can't find in a store above leads me to Walmart---or the devil, as I call it....
If I spend $20 having drinks out with friends, do I want to give it to the corporate masters of at Chili's or to Paul Wirth, owner of the Iron Post? If I'm going out to eat Italian, do I want to give it to the corporation of Olive Garden located who-knows-where or do I want to give it to the owners of Impasta?
The choice is easy for me.
And as for the $.50 anonymous2 claims is kept in the local economy, it ain't kept in the local economy if I spend it at Walmart with my other $2.
As for Bamba in anon1's post, then how about real hacienda or torero/toro or fiesta?
Still, the light bulbs purchased at Wal-Mart have resulted in $.50 kept in the local economy and the local store keeps $.25 here.
Ok, so I think what you are saying is the 50 cents extra that you didn't have to spend on the light bulbs is 50 cents that will be spent locally.
I guess is some stretched way that could be true, but it seems the more important point is profit margin. The profits that are made by Wal-Mart (or Chipotle) are shipped off to the stockholders. The profits made at True Value are shipped off to the owner's family. That is a lot of extra money staying local. Plus, you are helping a small businessperson stay afloat, which is good all around.
But aloha points out that there is not one specific reason to shop local - there are a lot of reasons. I started with the drab, dullness of the big box (something that I think is required in order to go national - can't be too "risky" with the cuisine, I'm sure). But the economic benefits for a community are also important. There are cultural benefits - the guy who owns the store may have kids in school who have a stable home and good food because we shop there. The list goes on.
But perhaps most importantly is the "rightness" or "wrongness" of the choice. It is important, imo, to actually make consumption choices based on what we believe to be the "right" thing to do. Individually, I think we must educate ourselves and work out these issues with our hearts or, in my world, with the Lord.
Right now I feel very good about driving by the big boxes to spend the extra 50 cents at True Value. I'm not trying to save the world. I'm just trying to live the way I should.
To keep my chin up, I try to look at it as if the lovers-of-chains are going to stand in line at Chipotle, then it makes it easier for me to get my food at El Desmadre. They want to go to Noodles? Fewer people in my way at Cravings. If they're all hanging out at Starbucks, then I can have some peace and quiet at Aroma.
It's been corrected below, but anon #2 argument simply displays why the corporates are winning--few have put critical thought into their purchasing decisions.
It's interesting to step into the psychology of the issue--most of us have large chunks of our lives under the corporate shadow and it's hard to wean ourselves off of that. As another poster mentioned--it's impossible to do that entirely. But to conclude that it's all arbitrary then and it's better to not fight it rather than appear hypocritical looks like laziness and a lack of intentionality to me. I mean, it's harder for all of us to do this--we live in the same society that has been overrun. It would be easier to not worry about it. But as Foley said, we must make responsible "right" choices.
But I disagree with you Foley, it's not enough to do the right thing and accept others' choices. Ultimately, our direct option is to do the right thing, but it is also necessary to use our voices to create an atmosphere where people are forced to confront their responsibility for the choices they make. The "What are you doing?!??!" moments are often the moments that make people actually think deeply about their choices and use their powers of love and empathy to live rather than just going the shortest path.
I'm not going to voice an opinion one war or the other except to say that unless you know for a fact that those franchises you so freely bash are not locally owned, you are being incredibly irresponsible.
Tom Weigand, of Madison, Wisconsin owns the Noodles & Co. You can read about his plans to spread the love (and his profits) throughout the land.
I heard Chipotle is run out of Oak Brook by McDonalds Corp. The app for a manager position seems to confirm this.
I figured everyone knew all Starbucks are corporately owned, as is Potbelly (the same corporation, actually). Here's a link if it helps.
The myth of the local franchise owner making good has been debunked for years. It is just not reality anymore, as the expansion in campustown shows quite clearly.
But thanks for stopping by.
I'm sorry, that's just not correct. All those franchisors sell independent franchises and unless you know exactly who is operating it, your argument is wrong. And so what if the guy owns 14 stores? Is he not still taking a huge risk? IS he not still provided jobs and local revenue?
And just what do you have against people being successful and running their own business(es) anyway?
At some point, all these (okay, not Chipotle) were risky startups.
Have you ever owned and operated your own business? Really? How much did you risk and lose?
I lost over $150K. I provided jobs. I paid taxes. I didn't manage to catch any for myself but so what? Would I do it again? In a heartbeat for the right opportunity.
It's easy for you to throw stones. You don't even know what risk is.
There is no myth about independent franchises. That's the American dream.
I'm sorry, what's not correct?
Starbucks doesn't franchise. Note this article, which talks of the Starbucks "franchise value" but mentions (at the bottom) that it is not the same as a franchise. Starbucks stores are owned by corporate back in Seattle.
Here is a page explaining how potbelly's is not available as a franchise since it is owned by corporate.
Since I've already explained the Chipotle situation, and we know Noodles & Co. is owned by some guy from Madison who owns like 20 other franchises, I am not sure what I am missing. Where, exactly, are the independent franchises? Any sort of link, or fact you might have is welcome.
For the record, I had this ground covered before you brought it up, so I'd prefer if you could leave the personal comments out of the conversation. I know you dislike my views on the war, but I hardly think my inexperience at losing $150K on a business disqualifies me from commenting on the corporatization of campustown, or denotes my lack of knowledge about "risk".
Cheers!
When is that article from? Starbucks' corporate website is currently offering franchises. So again, you don't know. The article you quoted for noodles states specifically 14 stores. Big deal. These guys took their money, capitalized and succeeded. What is your problem with success? Do you somehow think that all those small business owners don't want to make more money? If you had the chance at multi-million (or billion) dollar idea, don't tell me you wouldn't take it.
My point is, you didn't do the research. Are you going to tell me you found the truth on Portland Indymedia? Puh-leeze. The simple fact is, you don't know who owns the stores in town and your advocacy against them is irresponsible.
I'd still rather give my money to someone who lives here and cares about this community than to a man who lives in Wisconsin.
As far as I can tell from Google searches, Starbucks does *not* sell franchises to individuals, however a corporation (like a hotel or something) can put one in their store.
http://www.franchiseprospector.com/franchising-trends/starbucks.php
If you have some evidence that Starbucks *does* franchise, could you share it, prairie biker?
Irresponsible, eh?
This is a quote from starbucks.com:
Does Starbucks Franchise?
Starbucks does not franchise operations and has no plans to franchise in the foreseeable future.
This is a quote from the potbelly's website:
A lot of our fans have expressed interest in franchise opportunities with Potbelly. We hate to disappoint anyone, but all of our stores are company owned and we do not have any plans to franchise in the near future.
Ok, now I know Republicans typically hate it when facts get in the way of the truth, but this is getting ridiculous. My research is done, and was done before I posted. If you have any, I mean any facts to back up your claim that these are independently owned franchises please feel free to post them at length.
As for your continual personal jabs about my "problem with success" I would just defend myself by saying that I am actually trying to create success for local business owners by choosing to frequent their stores, and by publicizing their stores on this site. Pages for Ages is very successful, and I am glad. Corkscrew Wine Emporium is also very successful and, again, I'm glad. Parasol is one of my favorite record stores in the world, and they are very successful. Should I go on?
Next time you post something like the starbucks claim as fact without actually visiting the site (we call that making shit up), please do it somewhere else. This routine is getting pretty old.
Cheers!
No, no Foley! If you advocate against people spending whereever they want with no conscience, that makes you "irresponsible", even if you do your research.
If you spend advocate spending whereever anyone wants with no responsibility whatsoever, that's called being "responsible and totally awesome"!!!!
Only a small portion of a purchase is profit. Only a small portion of profits go back to the location of the centralized owner. If all Wal-Mart profits went back to Bentonville, Arkansas, it would be a dramatically different place. Its population is about 10,000 despite last year’s Wal-Mart profits of about $11 billion. That would be an investment in the local town of about one million dollars per person. It’s not happening.
The vast majority of those profits are re-invested in the company. About 25% are paid out to the shareholders who are receiving approximately a 1.3% return on their investment, not including gains in the stock. In the past five years, the stock has been quite flat, on average down a bit, so investors have significantly trailed inflation, or the return they could have on a savings account. Wal-Mart has performed about as well in the past five years as broad stock market indices. I suppose that might be a source of glee for Wal-Mart detractors, though it hasn't been a positive for the employees.
Investors have not gotten rich. Indeed, Wal-Mart has been a poor investment lately. The executives, while making a lot of money, are paid less well by common measures than executives at other large firms. That might seem like a silly data point, with many thinking that whole group is disgustingly overpaid, but that’s another discussion. Last year, Lee Scott, the CEO, earned about one dollar for every $55,000 in sales. The five key executives whose compensation must be listed earned a combined ~dollar for every $20,000 in sales. It’s hard to know how to make this comparison, but of course that is far, far lower than what you’d see from the management of a small business. Granted there are many layers of management in a huge company like Wal-Mart, but I think you’d still find the cost of management in Wal-Mart to be considerably lower than in a small business. That’s one reason they can charge lower prices.
Perhaps some of that $11 billion in profits should go to employee compensation. Wal-Mart currently has about 1,700,000 employees worldwide. Some of them are in other countries where compensation rates can be considerably lower (to go along with considerably lower costs of living). You can’t tell how many hours the average employee works, but perhaps it’s 30 hours/week. That means Wal-Mart has about 50 million hours of employee time/week, or about 2.6 billion per year. An increase in compensation of $1/hour (overhead costs in compensation, largely taxes, would increase that by at least 10%) would reduce its retained profits (subtracting the 1.3% paid to owners) to about $5 billion. It would seem easy enough for Wal-Mart to do that, but last year was a good year. You can’t set wages based on performance in a good year, it has to be tied to long term trends. Still, I would agree with those who say Wal-Mart can pay higher wages. Cutting into their profits (not their cash -- that's much less) by 25% seems reasonable. I presume this would make a significant difference in the quality of life for the employees.
Wal-Mart used to offer stock options to a significant percentage of its employees. I didn’t learn about their current plan, though I presume that’s public information. I do recall that ~15 years ago there were stories about some of Wal-Mart’s retail employees making $100,000 or more from their stock options. Wal-Mart was considered a great, great place to work back then. Things have changed for a number of reasons, including the flat stock price.
There is more to the “is Wal-Mart good or bad” question than employee compensation. Two big ones are (1) does Wal-Mart abuse its suppliers and (2) separate from compensation, how does Wal-Mart treat its employees. And there are the issues that face all companies, such as what is their impact on the environment; even if they are an overall source for good, how do they address the people that come up short as a result of their progress; what is their local versus global impact; are they a lawful and honest company. But this has been a huge post already.
Other than size, I don’t think Wal-Mart is a special case. It’s just easier to analyze them because there is so much information available. There are numerous detailed analyses and they’re easily found.
To say that people who shop at chains do so because they haven’t put critical thought into their purchasing decisions seems a bit quick to me. It’s a complex issue and we all have our reasons for the choices we make. Criticizing someone of low income for shopping at a place that is inexpensive, but “bland” seems, dare I say, elitist?
If Wal-Mart becomes significantly unionized, I think it will be very interesting and, sadly, very painful for a great deal of people. Our auto industry is significantly unionized and after decades of overall benefit to the employees (not the customers, I would contend), some of our formerly largest companies are at risk of bankruptcy because they can’t compete due to their high legacy costs. The pain in places like Flint, Michigan is obvious.
I do think there is a right way for Wal-Mart to improve the lives of its employees and maybe unionization is the right way, but I believe it's also very risky.
I think the problem of health insurance at Wal-Mart is the same as for most businesses. Business should not be responsible for health insurance. That our system works that way is shameful. It amounts to the unemployed subsidizing health insurance (which is tax deductible) for the employed. One of the best ways to improve the quality of life for a Wal-Mart employee would be to institute a national health care plan.
By the way, I think the biggest loser in the ascendance of Wal-Mart hasn't been the local business owner. It's K-Mart.
Good heavens, sorry for the double post. This software was developed by Google, right? Is that local Eudora guy still around to fix things?
Just to clarify: I've been very careful to not criticize other people for choosing what I consider to be "bland" or "boring" cuisine. My critique is with the businesses themselves and, specifically, with a City Council and local media who appear completely uncritical of this corporatization.
I don't think it is elitist to speak an opinion about the qualities of newly introduced restaurants in our community. In fact, I would argue that the real elitists here are the folks who are making all the money off of these new businesses. I'm a poor teacher - I'm not making a dime either way. Perhaps we should reserve the elitist term for people like Tom Weigand, who appear to be making a lot of money in this process?
Finally, your points about Flint and the demise of the auto industry are not, imo, valid. Flint went ghetto over ten years ago, and most business analysis of the demise of GM points to their uninspired innovations and poor marketing techniques. To put the cause of their woes on the backs of workers who would like to earn a living wage and have health insurance is a bit short-sighted. While pension payouts are definitely a factor, that is the business model GM is working with. It is their responsibility to make money while also taking care of their employees, imo. One might also argue that our slavish adherance to an imaginary "free market" has driven us to allow unfair competition in this country. We now talk as if our personal consumption abilities are of uptmost importance. GM is a good example of how not buying local, and protecting national industries, has a very negative effect.
Finally, thanks for being a part of the discussion. I especially appreciate your civility. And, as someone who grew up on "blue light specials" I also appreciate your comment about KMart. :)
Right, Foleyma, you did avoid criticizing the motives of those who disagree. In my interpretation, others did not. Also, after rereading some followups, I realize I was responding to comments from another blog (itsmattsworld) on other Wal-Mart issues.
I fear the insularity that can come from a focus on shopping local. While I think I'm far above average in the percentage of my expenditures that go to local businesses, I sometimes wonder what I'm accomplishing. One of the harsh benefits of a free market system is that it forces businesses to meet a certain kind of "quality". Some may disagree whether this is a worthy goal, but if, for example, you and your thousand friends buy your coffee at the first local coffee shop in town and then remain loyal to it, there's little incentive for that shop to get better. Some local businesses have withstood external competition very well, but I presume they've had to get better in order to succeed. Some don't succeed.
The other side of this is that there are (mostly non-retail) businesses in town that have succeeded through export. Not necessarily to other countries, but to other areas of our country. They succeeded because others have opted not to only buy local. You could say you're only going to buy a radio controlled airplane (or more generally, any piece of hobby/entertainment) if it's built locally, but it's fortunate for one local business that others don't feel that way. There are numerous such local examples.
You could opt to only buy books and music that have been created locally. If the town rallied behind that, assuming other towns didn't follow suit, pretty quickly Champaign would have an astonishingly vibrant book and music scene. And yet we'd all be impoverished.
True, there's a difference between choosing to only buy the News-Gazette and not the New York Times versus shopping at Pages instead of Border's. You can get pretty much any book you want at either place, maybe with a longer wait at the one with the smaller selection or the lesser buying power/clout. But if Pages were the only large bookstore in town, and I think it would be if no one supported the big chains, wouldn't it be a pale imitation of its current self? Would they have ~doubled in size when they moved? Would the cafe be as large and nice? They would have monopolized the large bookstore market in town without external competition. Would the consumer really be better off?
The benefits I see coming from large chains are not purely economic. Didn’t Starbucks popularize the high end coffee market? People who buy a four dollar mocha at a local coffee shop are almost certainly patronizing a shop that has copied elements of Starbucks. Even a tiny retailer today benefits from inventory control systems invented by Wal-Mart. Not only was Wal-Mart smart enough to do this, they were powerful enough to insist that their suppliers adopt it.
Personally, overall, I don’t think the local coffee shops have very good coffee. There is some great coffee and, to me, some pretty poor stuff. I think Starbucks succeeds on quality. I think in a blind taste test, they’d finish above the local average. I think their presence will result in my drinking better coffee even if I never go there.
One statistic I meant to include in the previous post: about three cents of every dollar spent at Wal-Mart becomes profit. Assuming efficiency equivalent to a local operator, that's how much incremental money can potentially leave the area. And I doubt the local business owner is going to spend all his/her profits locally. I bet they like to travel, drive a car, read a novel, listen to music, drink soda/beer/wine and eat fish as much as anyone. Most of that value (and profit) added does not occur locally.
Thanks for those posts, anon. I enjoyed reading it, and they were very thoughtful.
The several issues I'm curious about in terms of large businesses are as follows:
1) Where does the money go?
As you said, the rates of compensations can be evaluated in different ways. Aren't they exponentionally higher than in most other industrialized countries? I think that I am making some assumptions about this, but so are you. Sure, a mid-range business owner might use their profit for luxuries outside of the community, but that's hardly the case for the working-class family owned business.
2) And more importantly, what is "quality of life"?
A)Wealth
The big franchises are definitely good at generating wealth--but that is their priority which also means that the wealth is diffused to a less degree.
B)Experience
You see, you say that you get Starbucks because of superior quality, and I can respect that you probably have done that taste testing. But have most people really done that? For most companies, the goal of the building of brand-names is not to get out the word on their superior products, it is to make the quality of the product irrelevant.
Chipotle or Noodles and Co. or whatever have no need to create food that will win in a taste taste.
They are attempting to ensure that people will never conduct that taste test. I don't want people to avoid Potbelly if eating there would make them healthier and more satisfied with their meals. I want them to actually ask that question, which most of them are not doing at this point.
I don't think this is elitism--I would not judge anyone's informed decision based on actual product quality.
3) Human interaction
I experience a loss in service and personal human interaction at the major chains. Sure, there are small-businesses that treat people like crap, but that's not really relevant. I'm talking about the drop in quality of life that is the logical result of a human distance that allows people to make corporate decisions without any empathetic link to their customers and employees.
Beyond all of the knee-jerk reactions to the businesses and the pathological self-justifications of spending patterns, I think there's a middle ground to discuss this issue which your posts have been doing a good job of occupying.
anon -
you argument seems to center on the idea of quality, if I am reading you right. Generally, you seem to be arguing that a localized economy will not allow the creation of a better product, and will in fact stifle the evolution of the quality of a product.
This seems like sound reasoning except for the historical basis of capitalism. Originally, of course, the local merchant was all you had. A hatter, for example, either made his or her money honestly in the community or failed. The deciding factor would, of course, be customer satisfaction.
Now, of course, when the big hat factory opens up and start churning out identical hats the hatter usually cannot compete economically, but not necessarily on quality. In fact, hand crafted antiques are now worth quite a bit more than factory crafted antiques of the same era.
You also argue that shopping local will mean not shopping outside of the community. While I am not quite that much of a fascist in my belief, I see your point. Perhaps I should substitute "independent" for "local"?
But you main point about quality just doesn't wash, imo. The quality of the corporate product is usually inferior to a private business, just because of the impersonal nature of the corporate product. A milkshake from McDonalds, for example, pales in comparison to a milkshake from the Courier Cafe. And, Alan Strong has been know to add a flavor or two at his customers request. :)
This is not an easy issue to declare absolute right or wrong within. More likely it is up to the individual consumer to make his or her choice wisely. For my part, I have taken the time to research the new businesses in town and I am choosing to reject them not only on taste, but also on ethics.
The bonus for me is that I get to eat tasty food and feel good about my purchase at the same time. The best of both worlds!
foley,
i find this discussion interesting, but in defense of _the hub_, (or at least, my contribution to it) when i cover community news, i try to cover any and all of what's going on that may be of interest to the hub's spectrum of readers. i don't at all see this as selling out or kow-towing to corporate interests. every day i get press releases for many different happenings around c-u -- from new corporate chains coming into to campus town, to nonprofit organizations in trouble and soliciting donations, and to locally-owned businesses opening. my policy is to cover what's going on, regardless of any biases i might have. i personally try my best to represent the interests of the whole community in _the grapevine_ and not censor based on the opinions of various interest groups.
and as someone once mentioned in the comments to a previous post, why don't you consider writing for us?
take care,
heather
Heather -
Actually, I've been meaning to write a "pro-Hub" post for a while now, as there are several things I really like about what you all do. Koplinski, for example, is really an outstanding reviewer, and I actually do like your grapevine column quite a bit, as it does strive to publicize pretty much all events (and keeps me informed of the occasional library book sales).
That said, I don't think I have much to offer to your paper. The nice thing about this blog is that it is my deadline, my choice to write it. Plus, I am free to comment as I see fit. The boundaries created by a publication seeking advertising for subsistence really don't interest me - unless I could figure out a way to write something complete inoffensive.
We'll see. Thanks for your post.
Xian -- Not sure I follow. Are you suggesting compensation of US retail employees is considerably higher than in other industrialized nations? I don’t think so. If you’re referring to CEO’s, I think you're right - they are much higher. Data on American companies is public (for example: http://finance.yahoo.com/q/pr?s=WMT) but less easily found for international companies (http://finance.yahoo.com/q/pr?s=sne).
My point about how the profits get spent is that relatively little of the value added, even when you shop locally, is created locally. Therefore, little of your purchase price stays local. If you buy a book locally, most of your purchase price leaves town whether you buy it at Pages or Border’s. If you choose to shop at Pages versus Border’s to keep your money local, a portion of the profit that was kept local still leaves town as soon as it gets spent by the shareholder (owner) in most cases. I would guess the vast majority leaves town in most cases.
I agree that the purpose of creating the Starbucks brand is partly to get people to associate that with “great coffee”. I think they have succeeded. But if there is too much of a disconnect between the brand identity and the product, I think the brand will ultimately lose. Starbucks could deliver increasingly poor coffee for awhile, but it would eventually lose as a result. I haven’t actually purchased Starbucks locally. Mostly it’s my airport coffee.
As to quality of life issues, I agree. You get more meaningful interaction in a smaller store and probably in a locally owned one.
Foleyma -- I didn’t mean to say chains tend to offer higher quality product, though I do think Starbucks offers higher quality than the average. I also think Wal-Mart offers a very good return process. I agree that the hatter is likely to produce a higher quality hat than the hat factory, but I think there are many cases in which that either is not true, or the difference in quality isn’t worth paying for. I don’t think a craftsman is going to do a better job of creating most electronic products. Although a craftsman could probably create a better running shoe, if I have to pay twice as much for that and the sole loses its cushioning at the same rate (which I think is not a property of craftsmanship), then there’s no point in paying more. The shoe will fail in a key way, protecting my feet from the shock of landing, before the quality matters.
I agree that Courier’s milkshakes are among the best in town. I can’t think of a chain that offers a better one, but that might be because I don’t seek a milkshake in a chain. I bet Steak & Shake’s milkshake is pretty good, though. As to Silvercreek, once my favorite restaurant in town, what has happened? I’m thankful for all the competition they’ve received because they’ve dropped the ball and their decline has accelerated. I used to worry about it, I don’t want to lose a good restaurant, but I can only eat so many meals, so I’ve stopped going there. In this case, my money is going to other local restaurants, not chains. But the pain they’ll feel if they fail will be no less as a result. And does anyone else think Courier’s quality has gone down? Didn’t the fried chicken change for the worse? Why?
I think the main contributions of chains are the creation of efficiency. Because the suppliers are large, it’s necessary for the buyer to be large to get a fair shake. And a chain can spend millions of dollars looking at how to save a penny in a process, say on the cost of the checkout bag. We all benefit from that.
I don’t think chains are necessarily better or preferable places to shop. I spend a good percentage of my money in local shops. But I do believe that we harm ourselves by excessively shopping locally if the national offers a better value just like we harm ourselves if we read only the local paper and local books and listen only to local music, or listen only to the politics of our neighbors. No, the experience of the chain is not necessarily enriching, but I don’t think stores will be very good if they don’t have to be. They need the competition to get better. I think we all get better coffee as a result of Starbucks and we all have better return policies as a result of, not Wal-Mart, but K-Mart. The good news is you don’t even have to go there to benefit once they attain a certain measure of success and influence. Unless the places people go to instead don't copy their good points.
I used to work in an IGA grocery store in a town of about 12,000. Before the local Wal-Mart upgraded to a SuperCenter and added groceries, the IGA was fairly dominant in the community, it's only major competition was a Kroger's grocery store. When I started the Walmart grocery store wasn't open yet. The IGA was still living quite comfortably with the upper managers making in the neighborhood of $100k (or so I was told).
However, the owners of the store were not about to rest on their laurels. They recognized that Wal-Mart is an amazing competitor and they were already adjusting their business plan when I got there. They cut down on management, sold some of their smaller stores in the outlying towns, and began ambitiously upgrading old cash registers and replacing it with better more modern technology.
When Wal-Mart opened, it did have an immediate impact on sales. Additionally, Wal-mart poached employees because it paid better that the IGA. However, it never has come close to putting the IGA out of business? Why? Because, you'll never wait in the long lines that you will at Wal-Mart. The employees are nice and well-groomed. The store is comfortable, clean, and consciously has things you can't find at Wal-Mart.
The real loser was Krogers. It has really hurt, and will probably go out of business sooner
or later. It still has faded graphics on the walls from the early 90's, and it's employees wear ugly brown uniforms.
My point is, competition is healthy, and useful. When I'm back in that town, if I need to buy some groceries, I generally go to the IGA first. Not because I care about mom-and-pop stores, nor because I think Wal-Mart is evil, but simply because I find it a more convenient and enjoyable shopping experince.
To the extent that Foleyma et al. buy at local stores because they feel that they are getting a superior product, I think that's great, it's the beauty of a free market. However, buying at Pages instead of B&N out of concern for keeping dollars in the community is silly, unless the book was published here the money will leave the community either way. While you might find it aesthetically pleasing to keep the box stores out, it does not in any way make the community better off materially.
Quite frankly, you are making economic assumptions that are plain wrong. You assume that if I buy a lightbulb at Wal-Mart for $2 instead of a $2.5 light bulb at the mom-and-pop that I cost the community $2.5, but that's not the whole story. That mom-and-pop is not an impotent actor dependent on my pity. It could for example, lower it's cost to be competitive and attract my business, or it could invest in technology as that could improve it's customer throughput, making my savings in time worth the extra 50 cents.
The simple fact is that the idea of "keeping dollars in the community" is really a poor rationalization of decisions made for non-economic reasons. You call it the "rightness" or "wrongness" of the choice. Some of these reasons seem to be your distaste for the "blandness" of corporate-owned stores, the fear that somebody, somewhere is getting rich, that warm and fuzzy feeling you get when you re-affirm your moral superiority by shopping locally-owned businesses.
But stop fooling yourself that your doing some great good for the community. If you want to improve the economic well-being of the community, I'd suggest starting a business that employs people and produces something of value, that someone in, say Boulder and Seattle might want to buy. It would certainly be more constructive than complaining that the city council is being "completely uncritical of this corporatization". I personally think it's scary to have government dictating taste.
Ok, that's enough for the moment, this is a great discussion.
Great comments everyone, and I agree this discussion is turning out better than I thought.
Here's my middle ground. I'll concede that multinational corporations may increase the quality of products and efficiency in local businesses. There probably are some general benefits that come from having a Wal-Mart, or a Chipotle in town. In the case of Chipotle, I could see local mexican restaurants adopting their policy of using naturally raised chickens. That would definitely be a plus, and would prove your point nicely.
But I think the last two posters have neglected to look at the unequal competition that occurs between large corporations and local businesses. Anon 9:32 believes that the mom and pop could lower prices to compete with, say, Wal-Mart. That is simply not a reality since Wal-Mart's superior buying power is designed to drive out any competition. Wal-Marts are also designed to lose money in the first few years, if necessary, and can rest on the success of other stores nationwide. Obviously, mom and pop need to start turning a profit fairly quickly if they are going to survive.
Plus, let's remember that the Wal-Marts of the world have driven thousands of businesses to bankruptcy. You may consider that fair game, but to me it points to great consolidation of choice and power in the marketplace, and a less democractic economy. This is not a good thing, to me. My part in fighting this problem has been to buy local.
It's my choice and I'm sticking with it. But, please, keep talking. I think we are getting closer to the point, whatever that may be. :)
foleyma,
I think your right in saying that Wal-mart is a special case. It's possible to compete with Wal-Mart, but its sheer market dominance means that your always playing by Wal-mart's rules. As I understand it, Wal-Mart rarely even gets into price-wars and never threatens them because competitors know they can't win that fight.
That doesn't mean that Wal-mart is a bad company. There's always talk about lack of unions and health care, but those things aren't unique to Walmart. As, I said in my earlier post(anon 9:32), I worked at a grocery store that lost employees to Wal-mart's higher wages. The company is comptetive in more than just prices.
I can understand why some people dislike the company. I know that my own father, a lifelong Republican doesn't like to shop there because he doesn't care for some of their practices. So, it's not just a bunch of left-wing crazies =-) who have issues with the place.
What I take issue with is rationalizing a decision not to shop at corporate chains that is made because it is "hip" or "cool" or feels "right" as being somehow "good for the community". I don't know that it isn't, I'm just not convinced, and find the economic arguments in this thread a little half-baked(with the exception of Anon 10:40, 11:44).
I also find the question foleyma asks a little distressing. Foleyma asks the question "who said that was ok?" in response to the opening of a new "box" store. I would like to know why there should be a "who" to make such decisions. We live in a society that prizes free exchange and association and by extension free enterprise. The idea of government deciding whether to allow this business and not that one is a road I think we should not go down. Of course, if foleyma just meant that in a simple rhetorical way, ummm, well forget I said anything.
And finally, I'm not sure that all mom-and-pops should survive. The small places with a distinctive character and atmosphere that people worry will be trampled by corporate stores generally survive although not as comfortably as before. And those that don't shouldn't be mourned. The dad with the kids who no longer has the store to work at will feel some pain finding new work. It's unfortunate, of course, but it's our gain, and perhaps his too. Economics isn't a zero-sum game, and job turnover forces improvements in productivity(maybe our dad will get more education) and more efficient allocation of resources.
Allan Niemerg(Anon 9:32)
Allan -
Thanks for your comments, and I have to say I do not disagree with much of what you say. However, it occurs to me that you, and other posters, seem to have an idealized notion of how business is run in this country.
For example, your objection to my somewhat rhetorical quip "who said that was ok?" belies what I consider an anti-protectionist viewpoint. We, the community of Champaign/Urbana get to say "ok" to development in this town. We do it all the time, or at least we should. We live here - many of us plan to live here for 50 more years. Are we to have no say in how the town develops, or the development decisions made by our elected representatives?
Here's an example of how Wal-Mart plays the game. Far from being a benign player in a game - a business just hoping to "make a buck," Wal-Mart and its ilk spend millions of dollars lining the pockets of legislators, and lobbying for their right to do business as they see fit.
And how do they see fit to do business? By importing billions of dollars of Chinese goods into this country and selling those goods at ridiculously low prices.
Now, if all I care about is my home's budget, and my personal consumption patterns, then this is not an issue. If, however, I choose to make my budget and my consumption a reflection of my values, then stories like this might give me pause.
I'm well beyond pause. I have a duty as a citizen of this country to inform myself about the government and business practices that I impact. If my neighbor believes it is her calling to open a crafts store, then by all means I think she should have a fair shot of making it.
But that aint the way the game is played anymore. She has to adjust to competition from billion dollar marketers who can buy their products at prices she will never be able to compete with. That is an unfair business environment and, to me, that is wrong.
Have a good day!
I think the main point in supporting locally owned small businesses is simply in personal taste and the value you personally place on certain businesses. When Merry Ann's diner moved downtown it affected Sam's Cafe's business a bit. Lunches have declined over the past year despite the expansion downtown. Both are local owned small businesses but I prefer Sam's in many ways - the owner, the unique atmoaphere, and the food - so I always choose it over Merry Ann's and make a point to and still would even if it cost more (which is doesn't). The Blind Pig is a small local-owned bar, but I'll speculate it has taken a bit away from Mike & Molly's business. Both are local-owned, I like both places and I know and like both owners, but I spend more of my money at M&Ms. Not because I am anti-the other guy persay but because I am PRO the other establishment. If you want these unique small local businesses to stick around you need to make conscious decisions to patron them more often despite possible higher cost products because the value of these small businesses to the local flavor and interest of the C-U area is worth the extra money. Regardless of how much money goes to the economy of C-U, there is no business that can stay alive without increased revenue and loyal customers who encourage others to patron these places as well. If more people make conscious decisions to patron small local-owned businesses, it's not going to drive out the big dogs but it can potentially keep the little guy from going under.
Who could argue with that?
If you like Starbucks coffee so much more and you don't care if it drives out Paradiso, Espresso Royale, or Kopi, then do what you want, but if it is a concern to you that these little local businesses stick round, go out of your way to patron them. I think that's the whole point foleyma was trying to make.
wel durn darn dang doodle i thot u werd 1 of those vegamatairans?!?!?!??!?!//1
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