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Chain Stores in the Community

Contributed by: DR. SEAN REIF D.C. on 7/31/2007

Chain stores have underwent an explosive period of growth during the 1980s and 1990s. A majority of new retail construction in the U.S. during this period has been in the form of "BIG BOX" or "SUPER-STORES" known because of their large, square, featureless buildings. These stores range in size from 20 000 to 300 000 square feet (a football field is 45 000 sq. ft.). Where a typical DOWNTOWN store might be 3000 sq. ft. These superstores encompass general merchandise (Wal-Mart, Target, Kmart), Home-Improvement (Home Depot, Lowe's), Toys (R-Us), Office supplies (Depot, Max, Staples), Sporting goods (Sports Authority), Warehouse stores (Costco, Sam's), which offer goods at wholesale or near-wholesale prices. Smaller chains including clothing stores (Gap, Banana Republic), restaurants / coffee shops (Arbys, McDonalds, Pizza Hut, Starbucks), drugstores (Walgreen, Rite Aid), bookstores (Barnes & Noble, Borders) have also expanded rapidly.

As chain stores have multiplied, they have captured a larger share of retail sales, and tens of thousands of locally owned businesses have closed. More than 40 % of U.S. restaurant spending is captured by the top 100 chains. Wal-Mart captures 7 % of ALL U.S. spending with $220 Billion in revenue and more than 4 500 stores worldwide.

Although popular with many shoppers, chain stores have faced growing opposition to their expansion plans in recent years. In Cities and towns, citizens have organized grassroots protests, boycotts, petitions to block the arrival of NEW chain stores.

Chain retailers argue that they have created an efficient and INNOVATIVE method of retailing. By buying in large quantities, dealing directly with manufacturers instead of going through wholesalers, operating their own warehouses and distribution systems, adopting sophisticated information technology, and centralizing many management and accounting functions, large retail chains have reduced costs. Supporters also point out longer hours and "one-stop" shopping convenience. These features have made chain stores extremely popular.

Critics argue that chain stores harm local economies. When a chain store comes to town, they typically force locally owned businesses to close, thereby eliminating as many jobs and tax revenue as they create. Considering what happens to a dollar spent at a locally owned business. Not only do the profits stay in the community, but local retailers support a variety of local businesses. They bank with local banks, advertise with local newspapers, hire local accountants and printers - each of which in turn spends that revenuewith other local businesses. The Multiplier Effect sustains a wide variety of jobs in the local community and generates, through every transaction, new tax revenue to support schools, libraries, parks, and other public services.

In contrast, much of a dollar spent at a chain store leaves the community IMMEDIATELY. Because they are not LOCALLY owned, chains do not keep profits in the local economy and have little use for local goods and services. As a result, when chains displace local business, many communities experience a DECLINE in local economic activity and overall tax revenue. Corporate retail chains undermine the vitality of HISTORIC DOWNTOWNS and exacerbate SPRAWL and TRAFFIC by building massive stores on the outskirts of towns and cities. A typical, single big box store consumes 12 acres of land, requires a thousand parking spaces, and generates 10 000 car trips daily.

In the U.S., the Constitution prohibits cities from BANNING or discriminating against businesses based on whether they are locally owned or part of a chain. But, communities DO have the authority to determine what TYPES of development are appropriate in different areas of town and to set basic parameters on the size and character of that development. These rules are written into the City's comprehensive plan and zoning code. Some communities have encouraged the construction of BOXES and SHOPPING MALLS by zoning for large-scale retail development. Many have used public resources to actively recruit chain stores. Others have adopted planning and zoning rules that prohibit retail development on the outskirts of town. New stores must instead be located IN or NEAR the DOWNTOWN and be in keeping with the community's existing scale and character. Some cities and towns require detailed studies of the potential environmental, economic, and community impacts of any proposed retail development and allow only those stores that bring substantial benefits with few negative impacts.

Many of these communities are also investing public resources into rehabilitating their DOWNTOWNS and helping locally owned businesses survive and thrive.


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CONTRIBUTOR INFORMATION

DR. SEAN REIF D.C.

THORNTON , CO

DR. SEAN REIF D.C. has posted 997 stories and 1147 comments since joining on 9/14/2005. DR. SEAN REIF D.C. 's average story rating is 3.08.
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