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Author Of The “Big Box Swindle” Makes Case For Towns To Keep Out Major Chain Retailers

Tuesday November 4, 2008

By Ed Barna

    It’s a pretty safe bet that Stacy Mitchell’s latest book hasn’t sold a lot of copies in Wal-Mart.

    A researcher with the Institute for Local Self-Reliance (ILSR), Mitchell had previously authored “Hometown Advantage: How to Defend Your Main Street Against Chain Stores and Why it Matters” in 2000, and co-authored “Toward Sustainable Communities: Resources for Citizens and Their Governments” with Mark Roseland  2005. Last Wednesday, she was at Middlebury College, speaking on the subject of her November, 2006 book “Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses.”

    Controversial as Mitchell may be in some quarters, she found a warm welcome from about 100 people, divided between college and community. Originally her powerpoint presentation with Q&A session was slated for the Robert Jones House, much farther from downtown, but was moved to Twilight Hall—the former town elementary school near the town offices.

    Noted author and Ripton resident Bill McKibben had blazed part of the trail that Mitchell followed, as had Preservation Trust of Vermont head Paul Bruhn. But with big box development still a hot local issue, she had the close attention of her audience, which had many general impressions quantified as well as confirmed.

    Does a Wal-Mart bring new jobs to a community, or decrease the total by putting small stores out of business? Mitchell said that was studied by University of California-Irvine professor David Neumark: looking at 3,000 Wal-Marts, he found an average of 150 jobs were lost on a county basis, and retail payrolls shrank $1.2 million.

    Does it make any difference to the surrounding area which store is making money? Mitchell said it does, because 54 percent of local sales receipts gets turned around and spent locally, but only 14 percent of big box receipts, according to research in Austin, Chicago, San Francisco and her own state of Maine.

    But the main point Mitchell wanted to make was that a historic shift of power has taken place. Manufacturing, a sector that has seen steady job losses and companies going out of business, is now dominated by the retail giants, whose larger orders are too important for the manufacturers to lose.

    Too often, Mitchell said, Wal-Mart and others say that products have to be made cheaply enough to reach certain price targets. The only way is by substituting inferior designs, materials and workmanship, or especially by outsourcing the manufacturing jobs overseas, she said.

    Many people don’t realize the extent to which a few companies dominate many retail areas, she said. In the area of building supplies, Home Depot and Lowe’s together have about a 50 percent share. Wal-Mart has become the nation’s largest grocery store chain, she said.

    Mitchell showed a slide of a painting of the Boston Tea Party, which signaled American colonial grievances that helped bring about the Revolutionary War. That protest, which sent about 45 tons of tea into Boston Harbor, was as much against the bullying of the East India Tea Company as it was against the British colonial administration, she said.

    In fact, a rebellion of sorts is taking place, she said. She recommended going to the website for The Hometown Advantage, at www.newrules.org/retail, and described some of the strategies that are found there.

    Capping the size of stores helps, she said, naming three communities with 35,000 or 45,000 square foot limits. She may not have known about Middlebury’s 50,000 square foot cap.

    Farmers’ markets have increased 35 since the year 2000, one recent study found, and now number 4,385. Here in Vermont, the Agency of Agriculture, Food & Markets lists them online, and works to promote other programs like using food stamps for farm products, or getting them into restaurants.

    Do “buy local” campaigns work? Mitchell said most of the evidence is anecdotal, and answers “yes,” but a survey in Bellingham, Washington found that 70 percent of respondents recognized the local logo and more than 60 percent said the campaign had influenced their shopping habits.

    Work against the use of subsidies to promote big-box development (one study a few years ago found Wal-Mart had gotten over $1 billion of them) and work against state tax policies that favor big boxes but aren't available to smaller businesses. Mitchell summed up: “We really need to level the playing field.”

    In the questioning, one person wanted to know whether big-box imposition of product specifications on manufacturers meant some things carrying the same brand might have different, less durable parts in some stores? “There’s certainly evidence that the products are not necessarily the same,” she said.

    The degree to which the “buy local” movement is having an impact can be gauged by the way bigger companies are using words like “local” and “independent” to describe their branches, Mitchell said. If you can believe it, HSBC, one of the world’s biggest financial institutions, is now “the world’s local bank.”

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