October 16, 2009

A Little Knowledge is of Questionable Use

Do you know, I was two classes short of having a minor in economics but I still didn't understand until THIS WEEK that one of the arguments against chain stores is that they send the community's money elsewhere. I got that a few days ago in a flash of insight (or possibly from a commercial on the radio I didn't know I was listening to) as I was driving along mulling. I am in my MID-THIRTIES.

I think part of the problem is that when there are so! many! emotional! arguments! against something, it distracts from the PRACTICAL stuff---and if I hear too much emotional stuff, I generally start assuming there ISN'T much of a practical angle. Like, I am actually NOT sympathetic when I hear that the chain stores are going to put "the mom-and-pop stores" out of business. I think "mom and pop" is an excessively provocative term, considering that chain and non-chain businesses alike are owned by all kinds of people, some nice and some not, some parents and some not, and their motivations tend to be the same: make money.

I DON'T feel like making voluntary donations to keep a smaller company artificially profitable when a larger company can do the same thing more efficiently. And in my experience, small-business customer service varies just as much as chain-business customer service: some are great, some are crap, and not much seems to have to do with whether they're owned by "mom and pop" or by an international conglomerate. Sometimes you get a jerk, and sometimes you don't; sometimes a company has good policies, and sometimes they don't.

But finally I heard it in more economics-minor terms: that all the money the citizens spend at the chain is therefore going out of state. If it were spent at a small, local store, the money would presumably be spent by the local owners at other local establishments; then those other local owners would spend THAT money at other local establishments, and thus the money goes around and around, profiting the locals and also profiting the local government as they take their cut with each changing of hands. OH! I see!

It's not so clear-cut even then, of course. For one thing, the branch of the chain is still located HERE, so they have to pay taxes here. I think. Don't they? Or is there something about paying income taxes only where you're incorporated or whatevs? Still, property taxes, surely. And of course they employ local people, which means the company takes some of their out-of-state money and spends it back HERE. But still, I GET IT: I am in my mid-thirties and I see why smaller local stores can be better for a community.

What I DON'T get yet is how "seeing why smaller local stores can be better for a community" makes any difference once the chains are already here and the local stores are already gone. At THAT point---and that's the point most of us are at---it's hard to know what use this knowledge is.

I AM willing to pay a small/reasonable "tax" to shop "a better way" (which is why I'm willing to consistently pay $1.99 at Target for something that is $1.87 at Walmart, or buy the $4.75 partially recycled paper instead of the $3.50 non-recycled), but I'm looking around and I don't see many options for the "spend local" idea. Non-chain groceries? Only from the farmer's market, and that's only certain things and only a few months a year. Non-chain Tylenol? Nothing but a overpriced-beyond-small/reasonable convenience mart, and also of course most of the money still goes TO TYLENOL, which is NOT local. Books? YES! But...again, much of the money still goes to the out-of-state publishers/authors, and also, the difference between local and Amazon goes beyond what I am willing to pay in the "small contribution to the larger good" category. Gifts? YES! But that's a small part of the budget, and also what about Etsy? I love Etsy. Most of Etsy isn't local.

You can see how all this might make a Target girl feel...compromised.


Jess said...

My mother owns what can only be called a mom-n-pop (literally--it's her store but my dad does a ton of work for it too) store. I like supporting small businesses just to keep variety in there. But I won't support a business just BECAUSE it's small. I try to support businesses that offer good products, and operate on a good model, and provide good service. And sometimes that's a bigger store too. And that's OK. Size is a factor in my decision, but it's only a small part of the company profile. That's why I shop at Target but not Walmart. And, you know, my mom shops at Target too.

The Gori Wife said...

Businesses do pay state taxes when they have a physical presence in the state, so companies like WalMart and Target pay taxes in all states where they have a physical store, warehouse or other physical presence based on what percentage of their business was done in that state. It's called apportionment.

Regarding the rest of your post, I went to a school that shoved economics down EVERY student's throat - it was a mandatory part of almost every class and certain econ-only classes were required - and I'm still no closer to understanding all this stuff. Kudos to you for your high level mulling!

Jen said...

Here's my thing, which makes me feel better. I at least seek out and try the local place first (if it exists). Then if it is significantly different in price or lacks good customer service, I'll go elsewhere.

But just the other day I tried a new local place for dog food and although the brand I normally bought at Whole Foods was significantly ($10) more expensive there, they had another comparable brand that was less expensive ($10) than the brand I previously bought. AND they carried the bag out to my car for me!

Another example, the local nursery was fantastic. They helped me choose plants, loaded them into my car for me, etc. I didn't even bother comparison shopping that one because the customer service got me.

But you are right, you can get good customer service and bad customer service anyplace. And nothing really replaces Target.

And as another example, my husbands corp (large but privately held) just recently built a store and the city council was seriously dragging their feet on it. I couldn't understand why because my husband's company was going to 1. provide jobs 2. provide competition to another large company that had NONE and 3. build a nice new store in a vacant lot that had been vacant for the past ten years. So there are definitely good aspects to large companies too.

Jen said...

Oh, sorry to have been a comment highjacker there!

Tuli said...

I gave up regular trips to WalMart a few years back. My chains of choice are Target, or even better, Michigan based Meijer.

My real preference, though, is to shop local. While it's important for me to support my local economy, it's more important for the convenience -- the stores are closer to me and to me it's worth it to pay a bit more to NOT be in my car so much.

Allyson said...

I have a BA and MA in econonomics. And you know what? I'm going to shop where I can get the best balance of value, quality, and service, whether it be at Target or a local place. A lot of local business where I am haven't survived the latest economic downturn. Sad? Maybe, but what it tells me is these little stores either weren't running efficient businesses or weren't providing goods and services that were in high enough demand. Also- Target donates money to local schools, as do some other chains stores.

Becky said...

The Gori Wife is right - businesses pay taxes to the states and towns they are located in.

I struggle with this a little too, but like Jess, I let it be a part of my decision making, but not the biggest part. I like Target a lot (and it's a MN based company, so I feel like I kind of am supporting a local company), but when we were scouting for cakes and tuxes and stuff for our wedding we went with small local places because they were less expensive or the same price as others and I knew that we were getting good, personal service. It made me feel good that I knew they were local companies.

Allyson said...

Ha, I misspelled economics. <---not an English major, obviously.

Megan said...

Oh I can help with one! On etsy you can shop "local" ish by selecting your state and looking at vendors from there first. I like doing that anyways because otherwise I get overwhelmed. I was surprised to find one seller from my (very small) town and several that were closeby with nice things.

kakaty said...

Here's how I handle this without feeling like too much of a schmuck...it shop local when I can. When we needed a dishwasher last year, I got it a a locally-owned appliance store. I always check the local hardware store before going to Home Depo. Locally owned bookstores over B&N or Amazon. But the things I would get at Target (for me mostly household supplies and clothes for my girl) don't have real local alternatives. We do have a local grocery store, but it's not a supermarket so they don't have everything I need. I do my big shopping 2-3x a month at the big chain and do the little pick-ups at the local place.

When it comes to eating out, however, I'm a locally-owned-and-operated ONLY kind of girl. Yes we get McDonald's once in a while, but 95% of the time there is a local joint that offers better food at similar or lower prices then a chain. I wouldn't take my kid to the Baskin Robbins around the corner when there is an amazing local ice cream store that makes it's own treats just a little futher down the road.

Celeste said...

If everything we buy is made in China, who gives a damn if the retailer is local or not? It's not like that many local retailers are out of work, compared to manufacturers. Every time a manufacturing plant shuts down, a place dies a little more. By then everybody is used to buying dirt-cheap stuff made by essentially slaves, so the idea of Americans actually paying another American what they need for a salary to make their things is just not going to happen.

Be glad for the tax base the big retailers pay and let it go. Otherwise all you can really decide to do is buy and live off of as little as possible, and that is its own crazy no matter what your family size. Who wants to live like the Unabomber just to keep from sending money outside the community?

-R- said...

What about when a local store becomes a huge company? I know a few people who don't like to get coffee at Caribou Coffee because it's a corporation, but it's HQ is local and it started out as a local chain, so unless there was a drastic change in company policy, I don't get it. I'm simplifying the issue by not considering a huge corporation like Best Buy or Target (also local), but I still think it's a bit odd.

Katy said...

I'm pretty sure you can search on Etsy for artisans located within a certain area.

Carolyn said...

Yes! You can shop local on Etsy-- check out http://www.etsy.com/shop_local.php

Marie Green said...

I'm sorry, I didn't take time yet to read all the comments (I'll come back later and do that). But here's a few things we consider:

1. We try to get local food, when possible. The CSA and farmer's markets are the main source of this, but also, I check the labels at the store, particularly on produce. Chilean grapes have VERY HIGH amounts of pesticides used on them, for example.

2. When I need a gift I try the local shops first- we have lots of antique/gift shop type stores around here- they sell both old and new stuff. I love Etsy too, and that's a good 2nd choice. AND you can "shop local" on Etsy by clicking "look for local shops" option. (But if it can't be local, I think homemade is a noble vocation to support).

3. Restaurants are a great way to keep it local. We don't eat out much, but when we do, I'd much rather go to the local greasy spoon or local mexican restaurant than McD's. And they don't have any "toy prizes" at these places either, which I love. (I HATE marketing that's directed towards kids. HATE.)

4. Our main focus is environmental impact (and shipping things here- food, clothing, anything- has a carbon footprint). So if I can get it local, I do. We have converted to buying SO MUCH of what we used to buy at Target at local thrift stores and garage sales. It's waaaaay cheaper too.

5. I still go to Target for cleaning supplies, pull-ups, and such. But I buy much less there than I used to.

6. Some "chain" stores are better than others, obv. For example our local grocery (besides SuperWalmart- BARF) is employee owned and run by a union. They are better employers to the people that work there than the OTHER option. Same with Target vs. Walmart. Target treats it's people waaaay better.

I think just being mindful and going a couple of extra steps (or paying a couple of extra dollars) can go a long way when done consistently. It's about finding a balance, you know? And ANY local is better than none at all...

Marie Green said...

OH! Also, I think that many times, the reason small businesses don't make it is NOT because they are not providing good, quality, serives or products, but because they don't have the marketing budgets that the bigger places do.

My husband owns a local computer shop, and their computers are by and large cheaper than Best Buy. But Best Buy advertises a super-low priced option to get people into the store. Then they hook you and add on tons of "extras" that takes your cost HIGHER than the local place. Since local place don't spend so much on marketing, most of their dollar value they take in goes to quality products and TIME (in service etc) than ads.

Also, the advertising makes people "brand loyal". So if you're hungry for ice cream, you go to Dairy Queen, even though there is a better, cheaper, and closer-to-your home option. Most people don't even compare the two, they just have been programed to think DQ is better, even if it's not.

Anonymous said...

A lot of the big box superstores get local tax breaks - sometimes for years at a time. When the tax breaks are up, they move out of the community leaving a glut in the job market. I feel great about shopping at local businesses, but only if their customer service is good. Without strong, positive customer service I won't bother to shop regardless of local or big box. Also, I heart Target and shop the clearance just like Swistle (great blog!)

Mimi said...

I like to shop locally because I like the variety that big stores can't always provide. The thought that we might someday have no choice but one giant store where we can buy anything makes me sad. I like boutique stores and will pay more just to have something that isn't exactly what everyone else has.

Choosing to shop at a Wal-Mart or wherever is a valid choice that we can all make for ourselves, but eventually that may mean that we will have fewer choices of places to shop, if that makes sense.

My grandparents started a grocery store, which has turned into a chain of grocery stores, which my parents still run from our small town. When a small business is doing well, they will donate to their local schools, hospitals, sponser youth sports teams, etc. The benefits of keeping money local go on and on.

But on the other hand, I do love Target. I think they are an example of a big corporation that has done it right and should be supported too. Just spread the love (money) around and don't spend it all in one place, I guess my point is.

pookahs said...

Sorry, at work and can't take time at lunch to read all the comments in detail. But scanned a little and sounds like folks have some great ideas!

I always try to eat at local restaurants. Not hard where I live, but can be a little bit more of a challenge. I personaly would rather eat awesome Italian than sauce from a bag at Olive Garden so that choice isn't hard for me.

Gifts or even hardware that I need for simple home repairs I look for locally or at least to share the wealth with small business (like Etsy). I always try local bookstores first if possible. Amazon is local here, and I do utilize it for some stuff.

We have several regional chain grocery stores which I enjoy shopping at, and I know they at the very least take good care of their employees which is important to the community as well.

Local Produce. I don't have a CSA but I have local organic produce delivered and also shop the farmers markets, which we have several year round ones.

I also shop Target, Costco and Starbucks without any guilt. They all put money back into the community locally. They treat their employees well and offer good benefits.
(Although, Costco and Starbucks are also local here in Seattle)

I will not shop at Walmart for many reasons, ranging from it being a really unpleasnt experence to I completely disagree with many of their business tactics, but I also have the economic liberty to do so.

Cagey (Kelli Oliver George) said...

My grocery store does feature local farmers, which I really appreciate.

I do shop at Target and the like without (too much)guilt, but I also do not mind spending an extra buck or two, if it is for a local business and yes, I will go out of my way if it is feasible and reasonable (I shop quite a bit with local merchants in downtown Lawrence Kansas, but my parents LIVE there and I have access to free babysitting!)

Ironically, my husband's new business was created with local business in mind. These sorts of posts are near and dear to me because it only serves to remind me that is a need and desire for folks to WANT their money to benefit their local community.

Overall, folks need to remember simple local sale taxes help their community. I may shop Target, but I really try to keep it to my own town - that is a 7% benefit to my own community, right?

Anonymous said...

Keep in mind that businesses may have a physical presence in a community, yet are incorpated in another state - thus giving themselves a huge tax break and keeping money out of the local economy. Microsoft does this in Washington - they are incorporated in Idaho (they keep an office of 4 people there to quailfy)...and thus rob Washington millions of millions of dollars each year that would go to the state (schools)...and I see Bill Gates in People! magazine talking about how important good schools are...it drives me nuts. Anyway, sometimes what you think is local, is not.

Now lets go to Target!

Celeste said...

I don't see what's the problem with shopping online for Etsy, eBay, or any other thing you want but can't find locally. Where is is written that your shopping money belongs to your community? Obviously you will get your shopping for consumables, durable goods, and real estate done locally. Those all account for yor major spending. I see nothing wrong with shopping online for unique things you want. You would never skip travel because you could be spending that money at home in your community.

That said, I hate Wal-Mart and do my best to avoid it. Don't hate me, but Target does nothing for me and I don't even go once a year. It figures that I live within walking distance or a two minute driving distance of a Target right now. This is the perversity that is my life.

Sooboo said...

I try to shop local when I can mainly because I like the variety and because I get tired of seeing my beloved Target clothes everywhere I go. That being said I also shop at Target whom I mostly think is a good corporation. They donated a huge amount of money to my local art museum (L.A. County Museum of Art) to make it free for everyone after 5pm every day. Also, they give money back to local schools. I think small businesses can be reliable and good and so can large. It's not clear cut to say corporations are evil 100%. Thanks for addressing this. I think about it a lot.

Anonymous said...

Great blog? Yeah right.

Laura said...

Hey Swistle, remember a couple of weeks ago when you did a post abour bullies and said that you get them as commenters? Well Anonymous (above me) is one and deserves to be banned. This person does nothing but throw stones, adds nothing to the conversation, and doesn't even have the guts to have an identity. If you can, you would be doing all of us and yourself a favor by banning him/her.

TJ said...

Sometimes I think that I would really like to be one of those people who "shops local," because it seems so much like the thing to do. However, I'm not living in Scranton, PA anymore, where there was a convenient non-chain for so many different things.

I live in a suburb of Phoenix, AZ, and while I could, if I so chose, buy vegetables on the side of the road, my shopping and dining and convenienceing are largely limited to big chain stores.

While I understand, on some level the true benefits (not the emotional arguments) of attempting to shop local, I don't understand how much I am to allow it to hurt me for the good of the community. Farmers markets are so far out of range, it's an expenditure in time and money. I could try to shop at small stores, but we're living on one military salary right now, and shopping on the base is cheaper and... well, it's tax free. I could shop at a small, non-chain type store, if I could find one, or I could even shop at a big chain grocery that would be paying local taxes, but... well, those pennies matter to me, you know? Sometimes I wonder if shopping local and supporting the community is something that only rich people can do and I feel a bit helpless and selfish, but when things are already cut pretty close to the bone, it's hard to justify the added expensive being supportive of small business requires.

When I win the lottery, I will support my little tush off. Until then, though, what's a girl to do?

(Be honest, have I completely missed the point here? Y'all were all sayin some smart wurds.)

Stacia said...

Living in a small town makes it hard to find the stuff I want. We buy from Amazon and Drugstore.com all the time because local stores don't carry things we need, or are a lot more expensive.

You are so right that "mom and pop" stores aren't often run by nice people. A few weeks ago I discovered the only local grocery chain in town is owned by my former doctor and his family. This doctor was absolutely nuts, you wouldn't believe it. And there is no way I will go to the local grocery chain and put money in that family's pocket. So even if it's a local place, you can still have reasons to not go there.

honeybecke said...

I always look around the big chain stores and see all the locals working there, earning their paychecks and spending it locally. That makes me feel better. The big chains do bring in jobs for a lot of people.

Swistle said...

Laura- I know, right? The only way I can do it is ban all anonymous comments, and I hate to do that because there are so many benign anonymous comments (like by people who don't have blogs).

Laura said...

Yes but...don't you just need an e-mail address to have an identity? An e-mail address that is revealed to the blog owner but not the rest of the cyber universe? If I'm right about that, it seems like it's not much to ask of people, in order to insure that you don't have to deal with this sort of crap. Just my opinion - your call of course. Maybe it takes a tipping point of assholes you've been lucky enough to not have reached yet.

Black Sheeped said...

I didn't read the other comments (I'M SORRY), but I can point out that in some areas, bigger chain stores will locate themselves to avoid paying certain taxes. In Jut's hometown, big chain restaurants and stores starting popping up right outside city limits to avoid paying the city property taxes. That area has exploded, and thousands of people are shopping there now, traveling from other towns to shop there, and it really seems too bad the local schools and residents don't get any benefit from it at all--they seem to have to deal with all the cons the crowds bring, and none of the pros. I don't think the crowds go into the town and shop local there--the retail areas inside city limits have suffered considerably.

I'm not offering anything helpful, I guess, but I like knowing my tax money is helping our schools.

willikat said...

Target is HQed where I live, and they give a LOT back to the community. So. Maybe that will allievate your Target guilt? Because the school's in Willikat's state get some good stuff...and I thought they donated locally to each location too?

Leslie said...

In late 2005, *Forbes* said Target was the highest U.S. cash-giving company by percentage of income (a minimum of 5 percent of its pre-tax profits), and it gives $3 million weekly to the communities in which it operates. People with Target Visa cards can specify schools for percentage donation; $150 million has been given in this manner.

So, as Mr. Pickles would say, there are worse places to spend your money (he's very well spoken).

Kelsey said...

You know what else is frustrating? For us local restaurants can be tricky because of the food allergy stuff - many big chains have allergy info available online and I can check places out ahead of time. Small local places are, in our experience, less likely to have good info/policies/procedures for that sort of thing.

As for non-food items, most of our "local" shops are boutique type places which cost an insane amount more than places like Meijer or Target - part of the problem is that we live adjacent to several very affluent areas, but are not very affluent ourselves.

This might be an area where I, personally, try not to over think it, because I don't feel like there are many good "local" options.

Swistle said...

Laura- I think the trouble is that Bad People have no problem getting fake accounts with disposable email addresses and using them to leave mean comments, and that Good People don't realize it's easy to register or are nervous about giving out their email addresses to register (and don't realize they can get a disposable one). So I'd end up putting up a fence for Good People, while giving Bad People an exciting challenge.

Laura said...

Ah. Well that's a bummer. So, to the "Anonymous" jerk who prompted this exchange: If you don't like it, don't read it. Nobody who IS reading cares what you think about this blog.

Alias Mother said...

Over the years, I've developed almost a hierarchy of where I spend money and where I don't. Sometimes I'm really local: I get all my summer vegetables through the CSA of a local farm. It's good stuff, it's a good deal, and it makes me happy. Out of season, I get them at a grocery store that's internationally-owned. Not ideal, but they have headquarters in my state so I feel like at least I'm helping that way, you know? Sometimes I just need stuff that can only be found at a chain store. In those times, I choose the one that I feel is better environmentally, or treats its workers better, or offers more products made in the US. We've gone so far down this road, and are so disconnected from our suppliers, that it can be very, very hard to do what's "best." Sometimes we just have to do the best we can.

I just finished reading Barbara Kingsolver's "Animal, Vegetable, Miracle" and if you can get beyond the CRUSHING GUILT of her message, it's a great read with some great thinking behind it.

marybt said...

I understand what you're saying.

But isn't the United States also your community? So if you support an Etsy seller (which I do farrrr too regularly - lol), you are supporting your larger community.

Does that help alleviate some of your guilt? lol.

Anonymous said...

Love this post and the comments too. Don't have an account by wanted to say thanks for this post.

I try to shop locally as much as possible, but I'm lucky in that I live in a small town where I can walk to a good number of family-owned businesses and restaurants. There's a farmer's market right in town for half the year too.

Other than that, I shop at a unionized grocery store -- I like knowing that the workers are getting better pay and health care.

I also try to just buy less "stuff" overall. Less stuff manufactured in China and shipped all around the world, just to end up in a landfill. Buying less frees me up to spend a little more on the rest.

I freecycle or give as much to Goodwill as I can too.