Give a Gift To Our Economy: Shop Locally Owned This Holiday Season

I wanted to share with you this compelling piece by Stacy Mitchell.

This article is reprinted here with permission from Stacy Mitchell, a researcher with the New Rules Project and author of Big-Box Swindle : The True Cost of Mega-Retailers and the Fight for America's Independent Businesses.

Whether to patronize a chain or a locally owned business is not top of mind for many holiday shoppers, but it should be. It's a choice that has profound implications for our economy.

If you shop at an independent toy store, such as Be Beep in Annapolis, Maryland, you will likely see products made by Beka, a small toy manufacturer in St. Paul, Minnesota.

A family-owned business, Beka has opted not to sell to chains like Target and Wal-Mart. Doing so, explains co-owner Jamie Kreisman, would require moving production to low-wage factories overseas, which would eliminate what he and his brothers most love about the business: their relationships with their employees and working hands-on with their products.

Beka is healthy, but its future depends entirely on the survival of independent toy stores. Over the last decade, Wal-Mart and Target have aggressively overtaken this sector and now capture 45 percent of U.S. toy sales.

If you buy groceries for your holiday meals at an independent grocer, like Catalano's Market in Fresno, California, you will find lots of food produced by small-scale, local farmers, such as Paul Buxman.

A second-generation grower of peaches, Buxman nearly lost his farm selling to supermarket chains, which demand cutthroat prices and truckloads of perfect-looking, though often flavorless, fruit that only industrial farms can supply.

With bankruptcy looming, Buxman dropped the chains and forged relationships with independents like Catalano's. He works hard to give them the best fruit and they honor this by paying a fair price and accepting the natural ebb and flow of supply.

Today, Buxman's farm is back on track. Catalano's is doing well too, but owner Michael Catalano worries about Fresno approving still more chain supermarkets and recently a Wal-Mart. Since 1998, the top five supermarket chains, led by Wal-Mart, have doubled their market share and now capture nearly half of all grocery spending.

Patronize an independent CD store, like Waterloo Records in Austin, and you not only support a business owned by a music aficionado, but help to ensure opportunities for new artists. Many beloved bands got their start when a few store owners fell in love with their first albums and began recommending them.

That does not happen at Wal-Mart, Best Buy, and other mass merchandisers, which now account for more than half of all album sales, but stock only chart-toppers and have no room for unknowns.

Chain retailers have expanded dramatically over the last two decades. Home Depot and Lowe's, barely a blip on the radar screen in 1986, control half of the hardware and building supply market. Barnes & Noble and Borders account for half of bookstore sales. Every sector is now dominated by a couple of chains, and Wal-Mart dominates them all, capturing one of every ten retail dollars we spend.

We assume that the chains represent economic progress, but in fact they take far more out of our economy than they contribute.

As the chains have expanded, tens of thousands of independent retailers have lost their livelihoods and laid off hundreds of thousands of employees. A study by David Neumark at UC-Irvine found that every new Wal-Mart store actually eliminates many more retail jobs than it creates.

The expansion of the chains has triggered a cascade of losses in other economic sectors. Some three million U.S. manufacturing jobs have been eliminated since 1990, in part because the chains have pressured companies, including Black & Decker and Levi's, to slash costs by moving overseas.

The chains also return very little of what their stores take in back to the communities where they operate. A study in Maine by the Institute for Local Self-Reliance found that only 14 cents of a dollar spent at big-box store remains in the state's economy.

In contrast, the study found that independent retailers spend more than half their revenue locally. They bank at local banks, hire local accountants, advertise in local media, and require many other local services that chains do not. For mid-sized and smaller cities especially, this is a vital source of economic activity and jobs that pay a middle-class income.

In exchange for all the businesses and jobs they destroy, the chains offer us employment in their stores. Wages for most of these jobs are so low that many big-box employees rely on Medicaid, food stamps, and other taxpayer-funded programs to get by.

None of this looks much like progress. In fact, what the big-box model most closely resembles are the old colonial economies of the European superpowers, which were organized, not to improve the lives of the local inhabitants, but to extract their wealth.

This holiday season, we can declare our independence and begin building a more prosperous economy by forgoing the chains and seeking out locally owned businesses.

Book Recommendations: Who Needs Them?

News Item: Sometime this spring, the Los Angeles Times is expected to announce that it is folding its highly esteemed Sunday book review into a new section that will combine books with opinion pieces...Jeffrey A. Trachtenberg in the Wall Street Journal.

Where does one go to get critical reviews of current books? Who decides which books get reviewed? Even I don't read the New York Times Book Review every Sunday. We have patrons who do, and others who read the New York Review of Books. We even have one patron who picks up the London Review of Books and the Times (of London) Literary Supplement.

But for most of us, we rely on the Courier-Journal's book articles, overseen by editorial page editor Keith Runyon...and most of those are syndicated wire service pieces. Do we really care to hear what others have to say about books, or would we rather stumble upon them and rely on the pretty cover and the dust jacket notes? Do we pick a few favorite writers and stick with them until they die?

Granted, if you're reading a daily books blog, you are faced with a gargantuan problem: there are simply too many good books out there to spend much time chasing down new books. We can't read every one we'd like to.

For example, I just finished reading Blood and Thunder by Hampton Sides...four months after it came out. I stared at the book for 17 weeks before starting it, even though I knew I wanted to read it. It's a story I knew little about, the tale of the American conquest of the Southwest and the indigenous Indian tribes, most notably the Navajo. It's a compelling history that begins in 1846 with the Mexican War (a rather bloodless thing in New Mexico, though the bloodiest war the U.S. ever fought on a casualties-per-troop basis) and extends through the Civil War to the "Long Walk" that finally subjugated the nomadic Navajo units. Kit Carson plays a central role, in flashbacks to his journeys along the Santa Fe Trail and his scouting for the Fremont expeditions along the Oregon Trail, to his service as an officer in the U.S. Army throughout the 1860s. I recommend it, but I digress.

The decline of full-fledged newspaper book review sections is attributed to "not enough ads." A recent Chicago Tribune weekend edition went out with zero publisher ads. Why?

In an era of targeted marketing, publishers say the best time to reach readers is when they are in the stores with money in their pockets looking to make an immediate purchase. But with a sea of titles in the stores...the only way for publishers to stand out is to pay for real estate in the front and pile those books up high.

"You want to see your books in prominent places," says Tom Perry, associate publisher of Bertelsmann AG's Random House Publishing Group. "Such co-op advertising is where marketing dollars are going that might otherwise have been spent on advertising."...One publisher says that chain bookstores can charge $1 or more per book to stack titles in desirable locations, such as on a table at the entrance or in a display featuring new nonfiction titles.

One last pull-quote from the WSJ article: "I don't understand why newspapers, when they want to cut space, they immediately think of depriving people who like to read." (Frank Wilson, book-review editor at Philadelphia's The Inquirer.

As an independent, I lament the slow disappearance of book reviews, but the article is right. Publishers won't pay. When you see a bookstore advertising a book, there might be a token fee kicked back to the store by a publisher, but it is nominal. The most generous one will pay us $50 for a significant advertisement, which won't even buy one ad in The Tribune, much less help us pay for a campaign.

I also take note of where the money is going - to the chains. Read Stacy Mitchell's The Big-Box Swindle to see what kind of leverage the chains have on the publishers. A few years ago, the American Booksellers Association filed suit to level out the playing field, but the muscular response of the chains has once again cowed the publishers. Barnes and Noble is bigger than the top ten publishers put together, after all.

Now imagine this world, one where Wal-Mart orders 100 copies of a book per store at a discount of 55%. They don't pay for them until they've sold, and if Wal-Mart has to mark them down, they simply pay the publisher 55% of whatever price they sell it for. Oh, and if it doesn't sell, Wal-Mart just sends it back for 100% credit against the still-unpaid bill. Imagine what kind of store we could have if we only paid for books after they sold, could mark them down whenever we wished, and still make the same profit margin!

Listen to this posting

powered by ODEO

or download BookRecommendationsWhoNeedsThem.mp3