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Thread: Local vs. Chain Retail

  1. #1
    Cyburbian Cardinal's avatar
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    Local vs. Chain Retail

    Let's assume that every shopping district has an ideal blend of local and chain retail. Naturally, this blend will be different from a traditional downtown to a neighborhood strip to a regional mall, to.... You get the idea. Chains can serve to signal to visitors the character of a retail area. They tend to advertise heavily and draw in customers, who support the independent stores as well. Unfortunately, they vary little from one location to another, and can make a district monotonous. On the other hand, the independent retailers are unique. They may carry items you won't find in chains. They help to establish a sense of place. BUt their selection is often limited, their prices often less competitive, and they do not usually have much drawing power.

    A shopping district that is both economically healthy and still reflects a true local character is going to have a blend of national and regional chains and local businesses. What is the proper balance between the two? How do you prevent one type of business (chains, most likely) from coming to dominate the district and ruining its special character? Or should you?
    Anyone want to adopt a dog?

  2. #2
    Cyburbian Plus
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    I tried starting a similar thread with 5 responses:
    http://www.cyburbia.org/forums/showthread.php?t=12800

  3. #3
    Cyburbian boiker's avatar
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    I don't think this is something that can be addressed through local planning. The economy's structure and transportaton costs allow chains to exist. The only reason 'local flavor' develops is because products are produced, sold, used locally. That, I believe, is what established the identity of different cities and regions.

    A mix of chain and local stores could be forced through leasing requirements or special use requirements, maybe covenants or other agreements, but it would be a management and enforcement nightmare.

    The ideal blend would be like a conventional mall in what products are offered. A couple of well known, large anchors to draw customers and tens of small, locally owned specialty shops. The ratio of chain owned vs. locally owned stores would be 5-10% chain, 95-90% locally owned.
    Dude, I'm cheesing so hard right now.

  4. #4
    Cardinal,

    You might be interested to hear about the fascinating debate curently ongoing in Vancouver, BC about placing a cap on retail floorspace. This measure is currently before City council, and is aimed squarely at blocking big box stores from intruding into built up urban areas. The argument for placing on this cap is squarely aimed at preserving diversity of the small, local, independent stores. Unfortunately, the link to the newspaper no longer works so please bear with the copious text as I post the entire originating piece here, plus a supplementary article.

    ===

    Vancouver council limits retail space in Broadway-Arbutus

    VANCOUVER(CKNW/980)--Vancouver city council has approved a cap on retail space in the Broadway-Arbutus neighbourhood with a couple of changes.

    The majority of local residents asked council to reduce the limit on retail space in the original proposal from 40,000 to 10,000 square feet.

    Council listened for 2 days to that argument and has agreed.

    A cap for basic retail will be 10,000 square feet, with an exception for grocery and drug stores of no more than 30,000 square feet.

    A current proposal for a London Drugs at Broadway and Vine which is set in the final stages of permit approval will be exempt from the new policy. This policy will likely put an end to Home Depot's plans to put one of their locations at Maple and Broadway.

    ===

    That boxed-in feeling
    A Vancouver councillor argues that juggling various needs to ensure a livable city will protect business owners as well as homeowners

    Anne Roberts
    Special to the Sun

    Monday, July 26, 2004

    How big is too big? Should stores be allowed to expand to whatever size the market will bear? How can smaller, existing retailers be protected? How can Vancouver's unique neighbourhoods avoid the homogenization caused by the unprecedented expansion of chain big-box stores?

    Those are some of the questions Vancouver city council wanted answered when it voted to study whether retail caps -- across the city or applied neighbourhood by neighbourhood -- might be a useful zoning tool.

    The Vancouver Sun reacted as if city council had unleashed a vicious campaign against business, branding retail caps as anti-development and claiming the new zoning would drive away, or scare away, badly needed businesses.

    Business interests might view city hall's every action as either supporting business or attacking business, but the reality is that municipal government is engaged in a much more nuanced, multi-faceted task: building a livable city that is prosperous, yes, but also sustainable, inclusive, attractive and caring.

    It's all about choices. Land could be developed with a 70,000-square foot Home Depot carrying lumber and hardware, or, with a 10,000-square foot retail cap, it could be seven to 15 or more smaller stores selling vegetables, fish, clothes, shoes, toys, kitchenware and vegetables, and providing a range of services from dry cleaners to restaurants.

    Each choice has implications for the kind of city we are trying to create. For example, 10 smaller shops with doors and windows along the block creates a more pedestrian-friendly environment. Ten smaller shops attract neighbourhood residents to walk to shops on a daily or weekly basis. Ten smaller shops are likely to be locally owned and money spent there is likely to re-circulate throughout the local economy.

    Each choice has more than private consequences for business owners. They determine the public realm, the place where we meet our neighbours and create our communities.

    We are all consumers who want low prices and great choices at a convenient location, but we are also residents who want to live in safe, attractive neighbourhoods where people have a sense of belonging.

    Contrary to being anti-business, retail caps have been used in the United States, Ireland, Norway and England to protect the economic viability of existing commercial areas, including both downtowns and local shopping areas, and to prevent retail sprawl. It's a tool designed to ensure other businesses will not be overwhelmed by the large scale of big-box stores and to protect the unique character of local shopping areas.

    A growing number of smaller businesses across North America are levelling accusations against government policies that all too often favour large-scale production, long-distance transport lines and absentee ownership.

    Stacy Mitchell, researcher with the Institute for Local Self-Reliance in Minneapolis, says it's important to realize that economic consolidation is not simply the result of market forces. "It is a trend that has been driven in no small part by public policy. At the local level, land use and transportation policy often encourage and underwrite chain store development on the outskirts of town while undermining downtowns and local businesses."

    Mitchell concludes that "the future of local business will depend not only on the decisions that we make as consumers, but also on the decisions that we make as citizens."

    It's not always obvious what is good for our economy. Some people supported a Wal-Mart on industrial land on Southeast Marine Drive because they said it would bring needed jobs. But John Regis, owner of Regis Pictures and Frames, told me that his light manufacturing firm and retail outlet and other businesses located on land adjacent to the Dueck site also purchased for the Wal-Mart development, employed more people (and at much higher wages) than would be employed in a big-box store.

    Now, Vancouver has lost those light manufacturing jobs. Unable to find a site in the city, Regis Pictures and Frames, with its 25 employees, has relocated to Burnaby.

    Decisions about the kind of city we want to live in should be made as democratically as possible by the people who live and work here. Business people I talk to aren't scared away by the prospect of discussing the pros and cons of a retail cap. In fact, many businesses are as interested in exploring how to do good urban planning as anyone else. After all, business people live here, too.

    Anne Roberts is a Vancouver city councillor.

    ===


    To further add my fifty-four Canadian cents to your dollar, let's say for instance that you have a street that is doing quite poorly economically, but has all the signs of prospects for being successful - and the only block is a perecption problem, of crime, drugs, whatever. I'm sure you know of many a district that fits in that category. Now, were you to lure a Starbucks or a Gap to locate in that area, you could argue quite convincingly that what you have done is demonstrate that retail can have confidence in this street, and encourage more visitors to come and grow the area and increase the prosperity of the local businesses. The Starbucks/Gap then becomes something of a seed that spreads its influence and through name-recognition, attracts visitors who might not otherwise have ventured.

    Somewhere (I don't know where) there is a magic threshold of confidence - magic in the air perhaps - and boom, now people want to live in the area, shops are opening and sprucing up, rents are increasing, and we're going to town. As foot traffic increases, other chain stores might be inclined to come in (Club Monaco, Roots, La Senza etc) and use their economic muscle to buy out the independent hat seller for their own storefront. Does this harm the street? I don't know. One of the great ironies that I have in dealing with Business Improvement Associations is that they work very hard to generate economic prosperity on their street, but then the first stores to get booted out are the very members of the BIA (and often the most vocal) who suddenly find themselves faces with skyrocketing property values and rents, and increased competition beyond their ability to deal with.

    Could you do this kind of transformation without a chain store as the catalyst? Maybe, probably. But I argue that the name-recognition factor of a chain has quite a lot of wieght in drawing people out to an area they've never been before, acting basically as a traffic generator, while hopefully the other shops will be able to catch the spillover. Anyways, even if the chain stores do move in and push a lot of the other shops out, my feeling is that they won't go far if the opportunity is there. Many shops may move to the second floor of buildings, further increasing the liveliness. Some shops may skip around the corner, and begin to extend the commercial prosperity octopus-like along side streets. Others may figure out how to revamp their business and explode like never before. Finally, others may quietly fold up and die - the bargain shops, pawn outlets and whatnot.

    I think you'd better be pretty confident in the health of your commercial sector before you throw a chain store out on its *behind*, or place restrictions on fair competition for space along the street.
    Last edited by NHPlanner; 28 Jul 2004 at 9:12 PM.

  5. #5

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    Interesting article re Vancouver. Thanks for posting it.

    I think there is a factor missing when the analysis is boiled down to chain v local. The character of the shopping district, which is largely though not exclusively, determined by public or quasi-public investment, is a major factor in the draw for a retail district. Shade, places to sit, whether streeet vendors are allowed or not, the signage, public restrooms, etc., are all important factors in whether and how a shopping district gets used. Likewise events, like a farmer's market, contribute. I am thinking of downtown Takoma Park, MD, which had no prominent chains the last time I was there and seems very successful. I think that the huge farmer's market there is a big factor in drawing people and in raising the visibility of that downtown, even at times when it is not operating (which is just one day a week).

    Church St. in Burlington has lots of chains (Pier One, Old Navy, Borders, Ann Taylor, Eddie Bauer, etc, etc, and manages better than most places to combine the attractions of a mall and of a traditional downtown. The chains do not seem to me to diminish the local flavor. There are street performers, colorful characters, traditional architecture, and excellent local merchants to counterbalance the chains. It might be a good field trip for people from Boulder who are debating this issue.

  6. #6
    Cyburbian Budgie's avatar
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    Quote Originally posted by Spatial_Monkey
    You might be interested to hear about the fascinating debate curently ongoing in Vancouver, BC about placing a cap on retail floorspace. This measure is currently before City council, and is aimed squarely at blocking big box stores from intruding into built up urban areas.
    I believe that Bozeman, Montana considered a similar measure about 4 years ago. I think they may have also been considering requiring a performance bond to require redevelopment of big box sites in the event that the box is vacated.

  7. #7
    Member japrovo's avatar
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    Portland's city-funded neighborhood associations and neighborhood business associations sometimes work very closely. I've interviewed locally- owned small businesses that point to this as a source of strength---an intensely personal marketing tool. Some of these business districts have developed very clear identities and healthy market shares absent chains (e.g. http://www.thinkhawthorne.com) and have with the support of neighborhood associations waged diverse and ingenious campaigns to discourage chains from entering their neighborhoods. That said, while I recognize in many places (including some In Portland) the evolution you are talking about, I'm not sure I accept the premise of the question, that is either an inevitable progression or a magic formula to what are very diverse market processes.

  8. #8
    Member Wulf9's avatar
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    If you have a strong and vital district with local businesses that now attracts chains which would displace local business, pass an ordinance to prohibit chains.

    If you need chains to bring credibility, allow chains. You can define how you want to do this (usually square footage, design, and use requirements) that help chains look and act more like local businesses.

    If you have a mix you like and don't want any more chains, you can describe the mix you like and pass an ordinance which has an annual review and prohibits new chain stores if the chains exceed the mix and allows them if chains do not exceed the mix. (I have not seen this done, but it seems doable).

  9. #9
    Member japrovo's avatar
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    Quote Originally posted by Wulf9
    If you have a strong and vital district with local businesses that now attracts chains which would displace local business, pass an ordinance to prohibit chains.

    If you need chains to bring credibility, allow chains. You can define how you want to do this (usually square footage, design, and use requirements) that help chains look and act more like local businesses.

    If you have a mix you like and don't want any more chains, you can describe the mix you like and pass an ordinance which has an annual review and prohibits new chain stores if the chains exceed the mix and allows them if chains do not exceed the mix. (I have not seen this done, but it seems doable).
    What does it really mean to "ban" chains? What is a chain anyway---an out of town corporate entity? What about local franchises? What about "chains" that are regional or local in nature? If you are limited to regulations of certain physical forms, e.g. prohibiting large square footage or drive-thru that undermine a district's character, then what do you do when chains adapt as Home Depot and others are starting to? I suppose you might have some limited flexibility to affect the retail mix with certain incentives or business assistance programs----although depending on the specifics that can be a questionable road to go down for other reasons.

    I suspect the bottom-line is that some places are going to be supportive of entrepreneurship and local ownership and some are just going to be hungry for chains. Consumer education/marketing and organizational support and market research for neighborhood business associations might level the playing field somewhat. Regulation of physical form might level the playing field for a time, and I don't mean to say those ideas are bad. I'm just not wowed by the idea that you'll pass an ordinance and then you're done. In the long run people are going to decide the mix for themselves.

  10. #10
    Cyburbian JNL's avatar
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    Interesting what a local town is doing:
    Mall owner opposes 'big box' plan
    Dominion Post
    WEDNESDAY, 04 AUGUST 2004

    By BERNARD CARPINTER
    A big property company that has just invested in central Napier is calling on the city council to reject plans for a "big-box" retail development in Ahuriri.

    The Christchurch-based National Property Trust two months ago bought the Ocean Boulevard mall, which runs between Emerson St and Dickens St in the heart of the cbd.

    It has also shown interest in a large new building that could be built on the council-owned Dickens St car park next to the mall.

    Trust executive chairman Paul Dallimore said yesterday that the application by Corunna Bay Holdings to build a large-format retail centre on 5.5 hectares of land on Pandora Rd, Ahuriri, ran counter to council plan requirements and its retail strategy.

    That strategy, devised after extensive consultation, calls for retailing to be based in and around the cbd, rather than suburban centres like Ahuriri.

    Mr Dallimore said the Corunna Bay application was for a zone designated for mixed use.

    The council's requirements for this area, he said, included the following restrictions on retailing:

    * The articles sold are manufactured, processed, repaired or serviced on the site.

    * Retailing must at all times be incidental to the principal use of the site.

    * Retailing is limited to 20 per cent of the gross floor area.

    The proposed development met none of these criteria, Mr Dallimore said.

    The council plan also stipulated that the existing character of Ahuriri should be retained, and recognised the rights of existing industries in the area. New industries should be encouraged to move to the Ahuriri industrial area, the plan said.

    "The National Property Trust has a significant interest in maintaining the integrity of the inner-city retail precinct and we support the council's planning initiative," Mr Dallimore said. "The Napier City Council has a clear mandate to protect the inner-city retail precinct, having spent several months developing a clear and precise retail strategy.

    "We trust the council will see fit to treat this application in the appropriate manner," he said.

  11. #11
    Cyburbian SW MI Planner's avatar
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    Quote Originally posted by japrovo
    What does it really mean to "ban" chains? What is a chain anyway---an out of town corporate entity? What about local franchises? What about "chains" that are regional or local in nature?
    That's exactly what I was going to ask - how would you define a 'chain'?

  12. #12
    Cyburbian H's avatar
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    Quote Originally posted by SW MI Planner
    That's exactly what I was going to ask - how would you define a 'chain'?
    I consider a 'chain' any rest. that is not locally owned and operated.

    maybe 'corp. chain' is a better way to put it. If a local person has several rests. around the area then it is a 'local chain' amd I still consider it a 'local' rest.

    City Grocery in Oxford MS or Scotty's in Miami, FLA = Local Rest.

    Buddy's BBQ in Knoxville or the Varsity in Atl. = Local Chain

    Chile's or Applebee's in Anytown USA = Corp. Chain

  13. #13
    Cyburbian Plus
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    Quote Originally posted by SW MI Planner
    That's exactly what I was going to ask - how would you define a 'chain'?
    Check out the San Francisco Ordinance on
    Formula Business

  14. #14
    Member japrovo's avatar
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    Quote Originally posted by JNA
    Check out the San Francisco Ordinance on
    Formula Business
    "The ordinance defines a formula retailer as one of at least a dozen outlets in the U.S. that share common features such as a standardized array of merchandise, trademark, architecture, or décor."


    That is interesting. Some chains are willing to negotiate standard architecture when they're pushed or really want into a market. I can't imagine that some of these other elements wouldn't be negotiable as well in the right circumstances, then where are you? I also have to think that there's got to be a basis for a legal challenge there, particularly in some parts of the country.

  15. #15
    Cyburbian SW MI Planner's avatar
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    Quote Originally posted by H
    I consider a 'chain' any rest. that is not locally owned and operated. Maybe 'corp. chain' is a better way to put it. If a local person has several rests. around the area then it is a 'local chain' amd I still consider it a 'local' rest.
    That's what I was looking for - how to differentiate between "corp. chains" and "local chains". Thanks!

    Quote Originally posted by JNA
    Check out the San Francisco Ordinance on
    Formula Business
    The 'magic number' here is 12 - twelve or more chains and you would be considered a 'formula business' (aka corp chain).

  16. #16
    Suspended Bad Email Address teshadoh's avatar
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    I'm a bit mixed concerning local vs national retail. Sometimes a Ghetto Burger at Ms. Ann's Snack Shop in Atlanta hits the spot, but other times a Jack In The Box Ultimate Cheeseburger handles my appetite better (though we have no JITB ). As well as an all natural pair of khaki's locally made with hemp, they're nice, but I would have prefered a pair of Dockers.

  17. #17

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    There was an interesting article on the "Reverend Billy and his Church of Stop Shopping" in the New York Times Magazine. He is an "artist" who parades around pretending to "preach" against the evils of Starbucks and homogenization.

    http://revbilly.com/index.php

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