The Business section of last Sunday’s (March 23) Democrat & Chronicle included a front page article on the problems faced by Main Street businesses in a retail economy dominated by Big Boxes and other chains.
I was pleased to see it. As the article pointed out, with some choice quotes from Geneseo’s Louise Wadsworth, Main Streets are struggling to find their place, their market niche, as centers of value, service, and specialization, in a shopping landscape of malls, strip malls, plazas, and power centers.
Yet, I came away from the article with a sense that it was a story only half told. While we all recognize the appeal – nostalgic, quaint, attractive, authentic, human-scaled – of Main Streets, and while we all root for their success, their value is far more than just to our senses. Main Streets and locally-owned businesses are a critical cog in a healthy and sustainable local economy.
To draw some attention to this other half of the story, I wrote the following letter to the editor:
Sunday’s article, “Village stores struggling,” was a welcome reminder of the costs that Big Boxes and retail sprawl have on Main Streets and locally-owned businesses. I’m sure many of us feel a sense of loss at the closing of these businesses.
Missing from the article, however, was a consideration of just how great an economic loss this represents. The value of Main Streets is not simply the authentic alternative they provide to chain stores or the nostalgic longing that they satisfy.
Money spent in local businesses is more likely to stay in the community, to pay local workers and suppliers, earn interest in local banks, pay for local advertising, be counted by local accountants, and support local charities. This “local premium” pays significant dividends not paid by chain businesses.
Local businesses deserve our patronage. They also deserve the support of lawmakers. Zoning that limits store sizes and discourages sprawl, limits on subsidies to retailers, and efforts to insure that developers bear the costs they impose on infrastructure are a good place to start.
The “local premium” that I refer to is real and quantifiable, though rarely do we go to the trouble. Research by Civic Economics, the state of the art practitioners of economic impact analyses, has found that local businesses “generate more than three times the local economic activity of their competitor chain stores on equal revenue.” I expect to hear more about this at next week’s APOG conference on economic development.
Though the economic impact analysis that has been conducted for the proposed Geneseo Lowe’s is a great step forward in the thorough local review of development proposals, it does not consider the local premium. Rather, it includes only the most easily quantified impacts: on jobs and taxes.
Even there, it tends to favor positive impacts, measuring the new property and sales taxes that will be provided by the Lowe’s store, but not measuring the property taxes that will be lost by residential properties devalued by traffic and commercial properties – throughout the county – devalued by excess capacity. Likewise for jobs, with new jobs and wages easily measured, while jobs and hours worked that are lost and wages that are held down are harder to measure.
Patronizing Main Streets is not simply an exercise in nostalgia or a way to find that hard-to-find item. It is an investment in our communities. Without that investment, the community, in the many senses of the word, will be lost.