Tuesday, November 28, 2006

Chain vs. independent stores in Houston

Virginia Postrel has an interesting article in The Atlantic titled "In Praise of Chain Stores" (the link will only work for another couple days for non-subscribers). First, excerpts, then my thoughts on Houston.
Every well-traveled cosmop­olite knows that America is mind-numbingly monotonous—the most boring country to tour, because everywhere looks like everywhere else,” as the columnist Thomas Friedman once told Charlie Rose. Boston has the same stores as Denver, which has the same stores as Charlotte or Seattle or Chicago. We live in a “Stepford world,” says Rachel Dresbeck, the author of Insiders’ Guide to Portland, Oregon. Even Boston’s historic Faneuil Hall, she complains, is “dominated by the Gap, Anthropologie, Starbucks, and all the other usual suspects. Why go anywhere? Every place looks the same.”

Stores don’t give places their character. Terrain and weather and culture do. Familiar retailers may take some of the discovery out of travel—to the consternation of journalists looking for obvious local color—but by holding some of the commercial background constant, chains make it easier to discern the real differences that define a place: the way, for instance, that people in Chandler come out to enjoy the summer twilight, when the sky glows purple and the dry air cools.

Besides, the idea that America was once filled with wildly varied business establishments is largely a myth. Big cities could, and still can, support more retail niches than small towns. And in a less competitive national market, there was certainly more variation in business efficiency—in prices, service, and merchandise quality. But the range of retailing ideas in any given town was rarely that great. One deli or diner or lunch counter or cafeteria was pretty much like every other one. A hardware store was a hardware store, a pharmacy a pharmacy. Before it became a ubiquitous part of urban life, Starbucks was, in most American cities, a radically new idea.

Chains do more than bargain down prices from suppliers or divide fixed costs across a lot of units. They rapidly spread economic discovery—the scarce and costly knowledge of what retail concepts and operational innovations actually work. That knowledge can be gained only through the expensive and time-consuming process of trial and error. Expecting each town to independently invent every new business is a prescription for real monotony, at least for the locals. Chains make a large range of choices available in more places. They increase local variety, even as they reduce the differences from place to place. People who mostly stay put get to have experiences once available only to frequent travelers, and this loss of exclusivity is one reason why frequent travelers are the ones who complain. When Borders was a unique Ann Arbor institution, people in places like Chandler—or, for that matter, Philadelphia and Los Angeles—didn’t have much in the way of bookstores. Back in 1986, when California Pizza Kitchen was an innovative local restaurant about to open its second location, food writers at the L.A. Daily News declared it “the kind of place every neighborhood should have.” So what’s wrong if the country has 158 neighborhood CPKs instead of one or two?

The process of multiplication is particularly important for fast-growing towns like Chandler, where rollouts of established stores allow retail variety to expand as fast as the growing population can support new businesses. I heard the same refrain in Chandler that I’ve heard in similar boomburgs elsewhere, and for similar reasons. “It’s got all the advantages of a small town, in terms of being friendly, but it’s got all the things of a big town,” says Scott Stephens, who moved from Manhattan Beach, California, in 1998 to work for Motorola. Chains let people in a city of 250,000 enjoy retail amenities once available only in a huge metropolitan center. At the same time, familiar establishments make it easier for people to make a home in a new place.


Contrary to the rhetoric of bored cosmopolites, most cities don’t exist primarily to please tourists.


The contempt for chains represents a brand-obsessed view of place, as if store names were all that mattered to a city’s character. For many critics, the name on the store really is all that matters. The planning consultant Robert Gibbs works with cities that want to revive their downtowns, and he also helps developers find space for retailers. To his frustration, he finds that many cities actually turn away national chains, preferring a moribund downtown that seems authentically local. But, he says, the same local activists who oppose chains “want specialty retail that sells exactly what the chains sell—the same price, the same fit, the same qualities, the same sizes, the same brands, even.” You can show people pictures of a Pottery Barn with nothing but the name changed, he says, and they’ll love the store. So downtown stores stay empty, or sell low-value tourist items like candles and kites, while the chains open on the edge of town. In the name of urbanism, officials and activists in cities like Ann Arbor and Fort Collins, Colorado, are driving business to the suburbs. “If people like shopping at the Banana Republic or the Gap, if that’s your market—or Payless Shoes—why not?” says an exasperated Gibbs. “Why not sell the goods and services people want?”
Even though I think this article mounts an admirable defense of chains (and I have nothing against them), it's still nice to have a lot of independents mixed in for variety - and I think Houston actually does pretty well with independent stores, especially restaurants. Sure, plenty of the most successful independents grow up to be chains (Pappas, anyone?), because if you can succeed in Houston's super-competitive market, you can probably succeed anywhere. Our lack of zoning creates an easier environment for independents by enabling plenty of affordable retail space (yes, usually in the much-maligned strip center). In other cities, two forces work against independents:
  1. Zoning constrains available retail space, and chains can generally pay a lot more than independents can, so they squeeze out independents.
  2. Permitting boards fear empty retail space, so they're more likely to approve developments anchored with stable, national chains that aren't likely to go out of business.
So I think we end up with the best of both worlds in Houston - plenty of national and regional chains, plus a healthy mix of independents. If readers who've lived elsewhere have anecdotal or comparative thoughts, I'd love to hear 'em in the comments.


At 9:11 AM, November 29, 2006, Anonymous Anonymous said...

It's interesting that Postrel mentions local/regional businesses that became chains (Borders, CPK). Because those are precisely the businesses that are less likely to succeed in most places with chains dominating. It's not as obvious in a place like Houston, which supports a lot of local options, but the restaurant business in particular has become brutal - the efficiencies of chains make it much harder for independents to compete, and while the best will manage, it's also quite possible that the CPK of the 2020s will die stillborn on a streetcorner somewhere in the middle of America.

Which means, of course, that the idea of innovative businesses rising up from local environments will be less common, and we're more likely instead of get what a national marketer has decided is the right new trend.

I'm not one to go on an anti-chain crusade, but Postrel seems to be bristling at the idea that something is indeed lost from a culture when it's dominated by large national businesses. Probably because it's hard to put a precise economic value on regional variation, which makes it a rather uncomfortable idea for someone with her political leanings.

The bookstore examples are also quite interesting. LA didn't have good bookstores before Borders? Huh?

Having experienced Boston and Cambridge in the 80s - a bookstore utopia if ever there was one - I can tell you that yes, something has been lost. There may have been other gains in other places, it may just be economic reality, but something has been lost.

At 10:08 AM, November 29, 2006, Blogger Tory Gattis said...

Something may be lost, but wouldn't it be fair to say that 'something' was less valuable than what the chains had to offer, or people wouldn't have picked the chains over the independents? If that 'something' is valuable enough, the independent survives, just as Powell's books has in Portland. The mediocre independents get weeded out. And I think the next CPK will thrive just fine if it can offer something good and novel vs. the chains. Examples from Houston include Berryhill and Mission Burrito, which have been able to grow into small chains despite stiff chain competition.

At 6:30 PM, November 30, 2006, Anonymous Anonymous said...

There is no arguing that the bookstore experience in this country has declined tremendously with the growth of chains. Powell's and The Book People are extraordinary examples of places that fought tooth and nail to survive - most independents were beat out by aggressive tactics on the part of the chains (not because they were mediocre), and most price advantages that the chains offered their customers disappeared after the independents were gone.

The saddest loss has been in the used bookstore market, where people who shopped for books in Houston just ten years ago can remember many wonderful places that are now history. They've been replaced by Half Price Books, and this is definitely NOT a case of mediocrity being replaced by excellence!

What you have are uniquely arranged bookshops of carefully selected books being replaced by emporiums of junk. Whereas before, the bookshop's owner was usually a guy who had spent a career in the business, knew a good book when he saw it and would pay you what it was worth, not to mention making special housecalls for large collections or estates, now you have guys in their twenties who know nothing about books, offering the same poor price for quality items as they do for the Wal-Mart junk that most of their store is filled with. Books are practically purchased by weight - somebody selling their grandfather's library, who was a professor at William & Mary, is likely to get offered the same price as somebody bringing in boxes of crossword puzzle books, paperback romances, dieting books, obsolete computer programming, etc.

The result is that in 2006, I can count on two fingers the number of decent used bookstores in the city limits, and I generally save my money for the next trip to Boston or Chicago, although they too have suffered. I won't say that Half Price is the only culprit - abe.com, the nationwide increase in rents, and a general dumbing down of the population have contributed their share - but where Half Price has made its appearance, the effects are devastating.

At 9:00 PM, November 30, 2006, Anonymous Anonymous said...

Ten years ago a friend at college told how a family friend in his native Costa Rica bought 140 acres of beachfront property for $7K. As a tourist location Costa Rica was off the map. No one but rugged hikers and mission trips went to Costa Rica. Now it's hip. Hippies are replaced with Yuppies. Soon the middle class with embark en masse and they'll tell their friends how Starbucks has two different drinks you can't get here. Then cheap tacky hotels and pick pockets will leave it ignored again like Acapulco.

We all wish the best things in this world wouldn't change, but I suspect that our grandkids will complain about how the behemoth Ethiopian chain restaurant is driving out the local ones, while they sip Uzbek tea and ski the new pristine resorts on the Kamchatka peninsula.


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