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Point/Counterpoint: Cut red tape, not big box stores

Point/Counterpoint: Cut red tape, not big box stores

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Some urban planning professionals seem to view the everyday business of buying household goods as a quaint folk activity. They lose sight of the fact that the world consists not of so many Colonial Williamsburgs created for their amusement, but of real people satisfying their evolving needs and preferences.

Recently, yearning for an idealized past that they see slipping away, these planners have bemoaned the displacement of mom and pop businesses by "big box" megastores. On the surface, the movement to protect small businesses has a homey feel. Independent stores are owned by people who live in the community; they may even be friends and neighbors. Big boxes are seen as sterile, alien invaders from corporate headquarters far, far away.

But no mom and pop store was ever put out of business by a commando raid from Wal-Mart or Home Depot. Instead, small businesses that suffer do so because big boxes offer some combination of service, prices, choice and convenience that lure customers away from the competition. As John L. Gann, an urban planning consultant based in Illinois, told Reason magazine early in the big-box war: "When Wal-Mart or whoever opens a store … [t]hey don't have one customer. Every customer they get, they have to win. And then they have to persuade people to keep coming back."

All of which is to say that efforts to bar chain stores from opening new locations are aimed less at supposedly unstoppable juggernauts posing doom for small businesses than at locals who might choose to spend their shopping dollars at large, national retailers if given the choice.

But a movement that admits that it wants nothing more than to keep people captive to established businesses is likely to run short of popular support pretty fast. So the anti-big-box movement has adopted new tactics. Where once chain stores were portrayed as invulnerable commercial menaces, now they're painted as fallible and fickle retail dilettantes. Why, sometimes they even leave buildings empty when a few outlets inevitably fail and when others move into larger spaces in response to consumer demand. The abandoned shells of one-time Wal-Marts and Home Depots then dot the landscape, presumably for all eternity, or so it's hinted.

So superstores' latest sin is to not be unbeatable, as was once claimed. And they sin doubly by adjusting to meeting consumers' needs. In response to the dread menace posed by chain stores coming to town and occasionally changing addresses, groups such as the Boulder Independent Business Alliance have proposed legislative solutions.

BIBA, which consists of local business people who have adopted the language of community values in order to ward off competition, wants to ban new chain stores from opening their doors. People who prefer personal decision-making over mandatory quaint shopping habits will just be out of luck; the sort of stores allowed to compete for shoppers' dollars will be determined by fiat. Locals will be treated as play-actors in living museums, rather than as participants in a dynamic society.

It's not that chain stores are entirely without sin. Often they receive tax breaks and subsidies that aren't available to smaller businesses that wield less clout. Also, the Competitive Enterprise Institute noted last year that the Federal Trade Commission has perversely reversed its old prejudice against large discounters and now sides with big boxes against specialty stores. In particular, the CD and toy businesses have been hit by antitrust decisions that bar creative arrangements between retailers and distributors.

Local governments deserve plenty of blame, too. Well-meaning regulators create webs of rules that are more easily negotiated by a legal team from the home office than by local entrepreneurs. In a recent study of business regulations by a coalition of think tanks, the authors found that "regulatory barriers thwart new small business development, especially affecting those low-income groups most needing help — minorities, new immigrants and single parents." When those barriers go up, a company with dozens of outlets can more easily afford to challenge red tape than can a local store. This suggests that there's plenty of room for local outfits to compete — if regulatory barriers are lowered, special favors are dropped, and entrepreneurs are permitted to expend their resources on innovation rather than pleasing bureaucrats.

Small storekeepers and nostalgic city planners might pine for the days of mom and pop businesses and limited competition, but banning people from shopping at big boxes is no different than forcing tourists to settle permanently in Colonial Williamsburg. If "quaint" small retailers are to realize their real future potential, it will be through their efforts to satisfy customers. Fans of local stores can do their part by clearing away the barriers to doing business rather than expending effort on outlawing consumer choice.

J.D. Tuccille is a Flagstaff-based senior editor of The Henry Hazlitt Foundation's Free-Market.Net ( The Daily Sun asked Tuccille to write this column in response to the Milchen-Mitchell column at left.

— Arizona Daily Sun


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