Breaking Down the Big Box

Josh Stephens feels driven to bring attention to last year's Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses by Stacey Mitchell. The book argues that mega-retailers have not only drained the American economy of much of its entrepreneurial spirit, but also have contributed to the degradation of the social fabric, intellectual life, and built environment of cities and towns across the United States.

Photo: Josh Stephens

I originally read Big Box Swindle out of curiosity and latent disgust. I review it out of moral obligation.

Author Stacy Mitchell takes aim at Walmart (neè Wal-Mart) and its fellow mega-retailers, whose transgressions – from dubious labor practices to borderline price-fixing to aesthetic atrocities – she describes in harrowing detail. Those stories have been told before, but rarely in such a measured, comprehensive fashion. The chair of the American Independent Business Alliance, Mitchell is a practical crusader. Her lament is not as politically charged as those of Naomi Klein or as sappy as those of Barbara Ehrenreich but is every bit as affecting. These virtues, plus the widespread backlash against big box, might have been enough to vault Mitchell on to the best seller lists, were it not for a twist that has nearly ensured her own obscurity.

The benevolence of bookstores may seem obvious compared to that of omnivorous retailers, but in the course of picking apart the chain-store economy, Mitchell argues that Borders and Barnes & Noble are themselves no strangers to cutthroat capitalism. They may hide behind caricatured faces of literary greatness, but like any common purveyor of pop culture, their inventory relies not so much on intellectual depth and creative fervor as on profit. Mitchell accuses the big book boxes of ignoring small publishers, avoiding risks on new authors, hiring semiliterate employees, and giving favorable placement in their stores to sure things.

So Big Box Swindle itself is not likely to appear on one of those special tables at Borders, because any chain that puts it within easy reach would sow the seeds of its own destruction. (An appropriate, if nonsensical, analog would be for McDonald's to put Fast Food Nation on the Super Value Menu.) Big Box Swindle's relatively poor sales to date prove its own thesis: challenging, subversive discourse cannot thrive in a hypercapitalist world. Of thirty-two Borders stores in the Bay Area -- hardly infertile ground for anti-establishment critiques -- a grand total of four had paperback copies in stock recently. They probably had to make room for Gossip Girl.

This is a tragedy that transcends aesthetics. Bookstores are not just purveyors of knowledge; they are regulators. Ideally, they should distribute the best ideas -- such as, for instance, those that rail against purposeful blight.

Though not all of big boxes' offenses involve land use – some include trifles like human rights or antitrust violations – Mitchell analyzes the toll that chains and big boxes have taken on almost every corner of America. Big Box Swindle aggregates all the familiar anecdotes into one nationwide narrative in which these megamarts have caused the evacuation of downtowns, created nonplaces along highways and backroads from small towns to suburbs, and degraded even the most remote corners of the American landscape.

Mitchell does not take direct aim at planners, but her argument begs us to wonder what was going through the minds of the planners who signed off on all of these stores – if planners aren't supposed to prevent this sort of thing, what good are they?

Granted, some jurisdictions' land-use controls are strong enough to hold big boxes at bay, and some well intentioned rubes may have fallen prey to Walmart's folksy ruthlessness. Walmart dazzles them with promises of jobs and sales tax revenue, but it does so with scant mention of the jobs and revenues of existing businesses whose demise is all but assured when Walmart sets up shop. Towns are duped into thinking that they represent limitless consumer markets and have residents content with minimum-wage jobs.

Photo: Inside Walmart

Photo courtesy of Flickr user Eric Alan Marx.

Mitchell even reports that big boxes' prices, far from being "always low," vary little from those of smaller competitors and often apply to goods of lower quality (Mitchell cites one critic who says that Walmart sells not bikes but rather "bicycle-shaped objects"). Compare prices at any of San Francisco's independent coffee houses with those of Starbucks (not a big box, but a chain nonetheless): hippies and yuppies pay the same as soccer moms.

Mitchell also contends that while America hangs on every tick of the Wall Street tape, local multipliers generate truer wealth than does the gamesmanship and speculation of the stock market. They subvert what Mitchell describes as the intimate, direct connections that ought to fuel local economies and, by extension, ought to concern local planners.

The ante-Walton economy worked something like this: The local hardware store gets a loan from the local bank and rents a downtown storefront. It then retains the local advertising firm. The advertising firm gives the artistic high school student her first job. The student deposits her wages into the bank, and she buys supplies from the hardware store. And the cycle continues. Nowhere does Adam Smith say that a single cent has to go to Bentonville or that the marketplace of ideas must be limited to that which will enrich Borders.

Mitchell could have played it safe and limited her grievance to retailers that do not hold her fate in their hands. Instead, she fell on her sword, and her intellectual honesty deserves acclaim. In promoting Big Box Swindle I am not implying that one impassioned review will correct the injustices of the supposed free market. But it's a big world that needs saving. Mitchell has done her part. I only wish to do mine.


Josh Stephens is a former editor of The Planning Report and the Metro Investment Report, monthly publications covering, respectively, land use and infrastructure in Southern California.

Comments

Comments

How to frame the debate

First let me say that I agree that we have to change the form of retail development in this country. But any argument based on the idea that big boxes are too successful will just not resonate in an avowedly capitalist country. Being sentimental for the old days and complaining about low wages and poor quality products will likely fall on deaf ears. Industry scale, wages, and product quality are all widely perceived to be the domain of "the market", which is held to be the best arbiter of these matters. I'm afraid this is especially true for arguments based on aesthetics, which opens up anti-big box advocates to charges of elitism and not recognizing people's (legitimate) desire to buy low-priced goods. We have to recognize what is it about big box stores that has made them so successful. Is it just because they run by a particularly soulless group of people? I think the truth is more complicated than that. They offer unparalleled convenience and value for the money. This is in large part due to their leveraging of global supply chains and economics of scale, both of which are not going away. So the questions we have to answer are: 1. Does big box retail development as it is practiced actually distort the outcomes of a "free" market? 2. Does the development create large enough externalities to merit government intervention? 3. Can downtown, independently owned retail successfully compete with the big boxes after correcting for 1 & 2? By engaging with these issues we can hopefully move beyond some of the useless sentimentalism and contempt for the rural poor that mark the current debate, and figure out how our preferred style of retail actually makes more sense economically than the status quo.

Dscheltz: I hope you'll take

Dscheltz: I hope you'll take a look at the book because I think you are making an incorrect assumption about my argument and how I frame the issue. In fact, the three points you make are pretty good map for what the book does.

My core argument is that the chains have imposed a variety of hidden costs -- economic, fiscal, social, environmental costs that don't show up on their price tags but are borne by all of us nevertheless. I also argue that the chains have benefitted from a shocking array of public subsidies, tax advantages, and other policies that have effectively tilted the playing field and undermined the competitive viability of independent retailers.

The second half of the book describes how independent businesses can and do thrive with changes in public policy, particularly planning and economic development policy, as well as wholesale cooperatives, independent business alliances, and other collaborations that give local retailers economies of scale and strength in numbers.

Stacy MItchell

Stacy, My intent wasn't to

Stacy,
My intent wasn't to presume your line of attack against big boxes, but in re-reading my post I could see how you would interpret it as such. My point was that a lot of the sloppier arguments against big box development actually work against us, so my post was more a reaction to that than your work. From what you describe though it sounds like you approach the issue in a way that's definitely worth reading about.

Best,
Dave

Dave, Thanks -- Yes, I

Dave,

Thanks -- Yes, I agree about the sloppy arguments.

all best,
Stacy

good framing and questions

I think you are framing it exactly right and asking the the right questions.

Q1. the practice may not distort the free market, but their existence and proliferation is probably the result of some distortions like a street pattern that rewards arterials, tax abatements, no pricing of infrastructure or externalities

Q2. I don't think the presence of big boxes alone merit government intervention, but again, see #1, pricing of infrastructure and externalities would indirectly negatively affect big boxes. Drving would be penalized, land would probably me more expensive so it would be harder to do the large stores with so much parking, etc.

Q3. Some of them might be able to - the only way to find out is to do the first two and see what happens.

not such a poor seller at independent bookstores

Josh: Thanks so much for reading and reviewing the book. While it hasn't been a run-away bestseller, I wouldn't say its sales have been poor, either. It's done reasonably well, thanks to independent bookstores. If they didn't exist, I doubt this book would have made it into print, much less into readers' hands. I think a bigger challenge for the book has been capturing interest in the media, in part perhaps because it doesn't argue that the problem is one bad apple (Wal-Mart), but rather that Wal-Mart is the leading example of a destructive business model. That's more complicated to wrestle with. So, I much appreciate you giving it some ink.

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Sales & Promotion

Stacy,

Thanks for your comments! Rest assured, I did not mean to imply that sales were abysmal, and I took it as a given that I revere independents. I apologize for the implication.

However, what struck me is that BBS should, I think, rank up there with Fast Food Nation, and the way that books like that make it up the bestseller list surely depends on promotion by the big books stores -- which, we can only presume, they are loath to do. And I'm sure you're right about the media: stories need antagonists, and a class of chains isn't as sexy as a single chain.

Cheers,
Josh

Essential economies of scale...

Here are a few arguments as criticism of Big Box stores:

1) Mass production and distribution reaches maximum efficiency at the 'regional' and 'state' scale of economy. With national and global economies, production gains are lost in costs of distribution. Local economies are important, but too small to take advantage of mass production techniques.

A big part of the distribution cost (transport) is the consumer driving. It's least able to take advantage of mass distribution systems.

A busy Costco may attract 5000 motorists daily averaging 10 mile drives. That's about 2000 gallons of gas. Were Costco's to become distributors to local merchants using a small fleet of vans, the same goods could reach local merchants using less than half the gasoline. This is an extreme example of Big Box retail.

2) Economies of scale vary from local to regional to state to national and global. All are important to maintain, but national economies make states compete, and the global economy impairs and even disables lesser economies.

The global economy is like urban transportation systems: When a city plans only for automobiles and neglects walking, mass transit and bicycling, even travel by automobile fails to function optimally. So too the global economy, by disabling lesser economies, fails to function optimally for those goods which must of necessity be transported globally.

Today's global economy is akin to subservient colonialism, awarding the transport interest (middle men) and the largest manufacturers undue control over commodities and consumer goods. The global economy is monopolistic and imperialistic.

A problem of the big box or the big chain?

Is the problem here the large scale of the corporation that may hire other large national firms as opposed to independent retailers that tend to keep their hiring of other firms more local? Or is it a problem of the size of the box that requires extensive driving and free parking that partly subsidize the cost of development and contribute to declining downtowns?

While these two have gone hand and hand in America, Europe has seen a different result. Western Europe has stricter land use controls. Thus, the built form of major chains such as international clothing retailers H&M or Zara, Media Markt (the Best Buy equivalent) throughout Germany or drug stores such as Schlecker and Rossmans that are based in Germany and seen in other countries, are often in busy downtowns with excellent transit infrastructure. I generally defined the extent of downtown shopping districts by the number of H&Ms - which often goes up to 3 or 4 depending on the city. Like the size of the Mall of America with a Gap on each side, but with much better urban form.

I think we need to consider the differences between the need for better planning controls and the need for independent business to exist since they do not have to be related problems.

Private-public, who's at fault?

In many ways its difficult to criticize chains because redevelopment doesn't tend to attract entrepreneurs until well after its established. As such, the public usually seeks chains to "anchor" their retail investments, and even the private brokers will have run out of time waiting for independent owners to jump in. In a way, chains are loved and loathed, they're usually a guaranteed bet.

I will read this book but I'm afraid Mitchell will focus too much on the chain model itself which is only important to an extent. How much has the entrepreneurial spirit been extinguished not by Walmart but by trends in culture and education? We urge children to get a decent job, raise a family, and no less. We purposefully scoff at independent coffee shops and even assign cultural stigmas and labels to those who patron them. We smirk at those who rise against the tide of global corporations. The divisiveness of America is inherent right now, between "get a job and be quiet" and those who want the world to change for the better.

On another front, how well are our communities communicating within if developers have absolutely no foresight to creating sustainable retail. Similarly, how well we are indoctrinating our children into the big box model if we as adults do not guide them to "life as it was before." Demand and supply of outdated suburban retail models is essentially induced and fabricated. People must shop at big boxes sometimes because there is no alternative to choose. Developers see this ease of cost and return and continue proliferating the model. The cycle is locked.

As such we can no longer only blame Walmart for all the woes of community. We must separate the business model discussion and the discussion of business itself in order to move forward in our cities.

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