Let’s Shop Mom and Pop

Consumers should go out of their way to shop at small independently run stores instead of big-box retailers such as Home Depot and Wal-Mart. Pro or con?

Pro: Buying Locally Makes You Happy

The tangible benefits of shopping Mom and Pop are well documented: You skip the drive to the mall or superstore, hence saving carbon emissions, and those fruit-stand peaches use about one-tenth the energy to produce than the ones shipped across the globe to the Wal-Mart (WMT). A study by Chicago retail-industry tracking firm Civic Economics indicates that local business owners keep more profits in the community. But independent stores also offer better service and build communities. Plus, shopping there is fun.

Tony’s Hardware in Boerum Hill, Brooklyn, is an old-fashioned shop with worn wooden floors. Its very presence is an argument for local character over the bland big box. But the real advantage is that owner Tony Gonzalez knows the neighborhood, knows that the plaster-and-lathe wall you’re mounting a shelf on needs a certain kind of wall anchor. Standing before the vast expanse of fasteners at Home Depot (HD), you’re lucky to find a clerk, let alone someone who knows what your walls are made of.

Another Brooklyn retailer, Lara Fieldbinder, who owns the clothing shop Dear Fieldbinder, remembers what customers purchase and like, and you can count on her to tell you that a coat with many tiny buttons isn’t good for a harried working mother. Fieldbinder may carry fewer styles of jeans than Gap (GPS), but you leave feeling certain you’ll wear the item you bought.

Studies show shoppers at local produce markets have many more conversations than shoppers in chain supermarkets. Besides being less lonely, it’s surely more relaxing when your kid is munching on a carrot proffered by the farmer instead of screaming for Starbursts at the superstore checkout.

Working at a Mom and Pop is an education in itself. This writer delivered prescriptions for a small independent pharmacy in Cincinnati while in high school. When the pharmacist would explain to me that the Rx he was filling was for severe morning sickness, I understood something of the desperate-looking and grateful woman who answered the door when I rang.

Local shops do give cities and neighborhoods their uniqueness. So, yes, enjoy the quirky sign and the coffee drink not made from a trucked-in mix. But take pleasure, too, in being well taken care of.

Con: Giants Help Mom and Pop Survive

Mom-and-Pop stores add character and diversity to the community—there’s no denying that. What most consumers don’t realize is that by frequenting big-box retailers, they actually help small businesses and the local economy thrive.

Suppose that Gigantic Big Box Home Improvement opens a new store in Small Town, U.S.A. Yes, nearby independent hardware stores will lose a big chunk of business and may ultimately sink. But suddenly, the independent gas station down the street has a line of cars, the local café is jam-packed with lunch-goers, and a few hundred people move into the neighborhood—some of whom will start their own small businesses.

What’s more, the Mom and Pops will start to buy their hammers and nails from Home Depot because it’s cheaper than going to Grandpappy’s Hardware.

Most other consumers also have an obligation to their own budgets to seek out the least expensive merchandise available. Sure, Grandpappy’s Hardware may offer more and better advice about the choice between a chain saw and a jigsaw. But shoppers in need of a large quantity of nails, a heavy-duty tape measure, or a replacement for a stolen lawnmower should not be faulted for buying from a big box that offers the lowest price.

The giant stores might just offer more than bargains, too. The most successful big-box chains, such as Whole Foods (WFMI), are the ones that practice good social responsibility. In addition to buying from local organic growers, the retailer makes $10 million in low-interest loans available to small farmers. Whole Foods and other chains are dependent upon the small-business community, so they’re taking steps to ensure its survival.

After traveling cross-country to talk shop with Mom and Pops for their 2005 film Independent America, Heather Hughes and Hanson Hosein discovered a relationship of interdependence between big boxes and the little guy. “We didn’t condemn corporate chains in our film,” Hosein told BusinessWeek in December. “There are relationships between independents and corporate chains that you can’t deny. We’re more looking for the healthy balance where the corporate chains don’t become the dominant institution or retailer in a town.”

Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.

Reader Comments

Nick

Yackity yack. Everyone shops where the prices are the lowest on merchandise that offers acceptable quality. People talk about what other people should do, but amazingly, they never do, just talk.

Anonymous

Obviously, Mom and Pop can't compete with big business. Aren't monopolies the issue here?

A relatively recent UN report highlighted the importance of recognizing the political implications of American and European takeovers of Third World companies, which created private monopolies and oligopolies that sustain local price gouging, degradation of living standards, suppression of local independent innovation, and the maintenance of great disparities of wealth.

What if the giant stores were required to provide rent-free space for Mom and Pop? Then if a shopper is in a hurry, the superstore is right there, but if a shopper is looking for bargains, the "subsidized" local store is around back.

Shakir Rahim

Consumer choice, as these articles correctly identify, is driven by a variety of factors including price, service, and quality. Katz and MacMillan both assume, however, that these factors are constant at Mom-and-Pop stores and big-box establishments. On the contrary, there are certainly rude Moms and Pops, and conversely, caring employees at big-box stores. Furthermore, different consumers respond differently to the factors at play in a store. One may prefer a hardware store in which he can visualize his kitchen by way of a floor display, while another may be more enticed by the worn wooden floors of Tony's Hardware. Regardless, the many variables in the shopping experience certainly don't lend universality to either big-box or Mom-and-Pop stores. There are benefits to both, and every store is different. Frankly, I'm a bit surprised a magazine of BusinessWeek's esteem is having this debate. Consumers should choose whatever they feel is right for them depending on the good or service they are purchasing. What is far more pertinent is the economic debate at play (vaguely referred to in MacMillan's article) concerning whether or not the net effect of big-box stores is a positive one.

Oh, and last I checked, kids can scream for carrots, too.

Mary Schmidt

And, then there are the super Wal-Marts with gas stations, in-store restaurants, etc. Not good news for that independent gas station or local cafe.

(You also can't lump Whole Foods into the same category as a Wal-Mart--different culture and business model. Not to mention that WF stores are considerably smaller than those of Wal-Mart.)

I believe there is room for both--however, some of the big boxes practice a distinctly predatory strategy and then sprinkle PR fairy dust over it. (You also have to factor in how the big companies treat their employees. Of course, Mom and Pop can also be terrible bosses, but the sheer depth and breadth of big-box mistreatment is not only reprehensible but also has implications far beyond the local communities--for example, Wal-Mart's factories in China.

Further, studies show that more of your dollar spent at locally owned businesses stays in the community, which is great news for job creation and a healthy, sustainable economy.

Nick, I respectfully disagree. There are many of us who put our wallet where our mouth is. And "acceptable" is increasingly unacceptable. We make a point of shopping at independent businesses and do our best to promote our fellow independents. Check out the American Independent Business Alliance. (I'm a member of the Albuquerque Independent Business Alliance. "Keep it querque!")

Alec

To respond to Nick's assertion:
Some of us actually shop according to our conscience, which is why I steer clear of Wal-Marts and such.

As far as the entire idea of consumers saving from national or multinational mega retailers, the pro essay brings up the side of the argument that the business community intentionally ignores. When consumers buy from a big-box store, they generally buy goods from overseas, ostensibly to save the consumer a few pennies even though I haven't seen any prices dropping in quite some time. So with none of that money recirculating back into the community, the consumers on the whole are poorer. In fact, the only time big-box retailers offer truly superior pricing is when they first arrive in a new community. And that of course is just to drive the local Mom and Pops under.

And after taking away the livelihoods of the locals, these big-box retailers turn around and offer them jobs at $10 an hour. Then they can accurately say these people demand their low prices, because the big-box retailer just made them poor.

Joe

It is a cultural thing. Brooklyn is a very different urban environment from most of America. The key is service and employees who are proud of their jobs (Whole Foods vs. Wal-Mart for example). The size of the store is not really that relevant. Cost is important, but it is not the only thing.

tiddle

One aspect with which big one-stop shops can't compete with Mom-and-Pop shops is the personal touch. But how much value do consumers actually attach to that personal touch, and what premium are they willing to pay for that (assuming Mom-and-Pop shops can't compete on price or variety)? The answer seems to be that consumers like to talk one thing (that they value Mom-and-Pop shops), but act with their feet (and shop at the big box). It's a pity, since once the diversity dies out in the ecosystem, it's gone. Consumers will be stuck with the big box. Mom-and-Pop shops have to reinvent themselves in order to compete in this highly globalized environment. As it is now, the odds look stacked high against them, and I don't see any turnaround on the horizon.

Jeff

Mr. MacMillan's retort that other indie businesses benefit from chains' growth is flatly wrong. Independent businesses rise and fall together, because they do so much business with one another. All of the supporting services for a business that indies employ locally are centralized at corporate headquarters with chains, which is why each dollar spent at the local independent returns about three times as much to a local economy. The book Big Box Swindle details the economic arguments superbly.

As Mary noted, independent businesses are fighting back successfully with Independent Business Alliances in many communities (AMIBA.net). The big-box era may be in its twilight.

Anonymous

Personally, I'm all for government intervention designed to protect the little guy from big business. The term "anti-trust" says it all.

Of course, unemployment in the USA isn't particularly high, so it's not like Mom and Pop are going to starve.

On the other hand, most small businesses go out of business anyway, but certainly the general trend is for government to cater to big business--at the expense of the little guy.

Really, how much sense does it make that a company can move lock, stock, and barrel overseas, in order to save on labor costs, etc. and then still do business in America, without any sort of "compensation"?

Once upon a time, Gerald Ford declared inflation "public enemy No. 1," and he introduced Whip Inflation Now (WIN) as a series of proposals for public and private steps intended to directly affect supply and demand.

And after all, that's what government's for--to protect us.

Hanson

Although I'm pleased to see mention of our film Independent America in this debate (www.independentamerica.net), I would have expected to have seen it on the "pro" side.

Certainly, the point of our film is not to paint corporate chain retail in a negative light (as some anti-Wal-Mart documentaries have done, for partisan reasons), but rather to point out how absolutely essential independent small business is to our communities and economy.

Indeed, an "independent business alliance" in Santa Fe extols the merits of its "10% solution"--if residents put just 10% of their shopping budget into independent businesses, the local economy will benefit exponentially.

We continue to shop at chain stores when necessary, but it is the exception. We'd rather 90% of our purchases go to our local businesses, turning the 10% solution on its head. It's all about promoting economic diversity and diffusing the immense power of companies such as Wal-Mart and Starbucks.

So this is not the end of Mom and Pop and the "buy local" movement. From what we've seen since we finished shooting our film, it's just the beginning. And this debate on BusinessWeek.com is testimony to that.

Terrie

I agree with the anti-big box sentiments that other commentators have expressed, but I have to admit that I'm a hypocrite. The Wal-Mart and ShopRite in my neighborhood are simply so convenient--not only in terms of location, but their business hours and the variety of goods that they stock--that I just can't justify running all over town (burning fossil fuel all the way) to pay more and not necessarily find what I'm looking for. And my family and I rarely make a trip to Wal-Mart or ShopRite without seeing at least a few people we know; in my community, it's like the town square. I definitely have a love-hate relationship with Wal-Mart. Socially conscious consumer and busy working parent are the two sides of my coin, and unfortunately, the coin usually ends up going in the big box.

swimmer

"The giant stores might just offer more than bargains, too. The most successful big-box chains, such as Whole Foods (WFMI), are the ones that practice good social responsibility."

Wrong. Wrong. Wrong.

Whole Foods plans to build their Brooklyn store in a wetlands. The worst of it is that this retail space will be dug deep into the wetlands--the whole thing will be a legal cellar to avoid getting a special zoning permit for this oversized store. On top of that, the site is also a brownfield and under the cleanup plan. Whole Foods is not removing any more of the contamination than is needed to build the cellar retail space.

There is no social responsibility going on here, and the scale of this building is the problem. A smaller store located within our residential commercial streets--like Smith and Court streets--would be a better solution to food distribution.

There.

Anonymous

Our government has been bought off by big business: 70% of the economy is controlled by the Fortune 1000 companies.

A good example is the Bush Administration's 2003 push to cut $4.7 million in MSHA's (Mine Safety and Health Administration) coal enforcement program. Bush wanted a reduction of 65 MSHA employees, elimination of the chest X-ray program, reduction in technical inspections, ect.

Pertinent here is the infant-industry argument: Nascent industries need to be protected until they can attain a scale that allows them to compete successfully.

Trade barriers have been implemented to combat foreign "dumping" of steal and micro-chips on the American market. The same protectionism needs to be implemented to stop big business from beating up Mom and Pop.

Warren

I would shop at either if I knew that I was supporting the American economy. Unfortunately, we do not have the choice of buying American anymore.

The big-box stores are the worst offenders when it comes down to supplying Chinese goods. Of course, they are answering to shareholders.

I won't shop at Home Depot because of the whole Nardelli affair.

I do shop at M&P's out of convenience.

Finding what you are looking for in a big box takes too much time and frustration.

nflA

Talk about your mom and pop...that's fine; there is nothing wrong with that. You should shop there. However, when I need a product at a late hour or I can only afford the least for my family on my income or I need to return something, I have to rely on the store that can provide. That is what I have to do--provide for myself and my family. Times change. There is freedom of choice. Choose where you would like to shop. I will choose myself. I don't need people to choose for me because they don't like the store or folks that shop there.

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