Big Box Swindle – Masonite Monster Mall

The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses

4/1/09 Ukiah, North California

Excerpts from the Introduction

[I didn’t move to this beautiful valley to shop. -Guiness McFadden]

The economic structure that mega-retailers are propagating represents a modern variation on the old European colonial system, which was designed not to build economically viable and self-reliant communities, but to extract their wealth and resources. Yet many cities eagerly usher in these corporate colonizers.

Some envision a tax windfall, only to discover that these sprawling stores impose a significant burden on public infrastructure and services. Or worse, after their local economies have been bulldozed, they find that they are utterly dependent on a few big boxes that might raise prices, lay off employees, or threaten to move to a neighboring town if they don’t receive a tax break…

As retail sprawls outward, running errands entails more driving. The 1990s saw a jump of more than 40 percent in the number of miles driven by the average household for shopping—which translates into an increase of almost 95 billion miles a year for the country as a whole. Mega-retailers are thus fueling smog, acid rain, and global warming. Retail sprawl has also emerged as a top threat to our rivers, lakes, and estuaries. The specific culprit is pavement, which does not allow rain to soak into the ground, but sends it, loaded with oils and other pollutants, rushing into nearby bodies of water. No other category of land use creates more pavement and polluted runoff than big-box stores and shopping centers…

Local retailers breathe life into our downtowns and neighborhood business districts. They provide a setting for casual socializing with our neighbors—standing in line at the bakery or walking along the sidewalk—which builds a sense of camaraderie and responsibility for one another. This kind of informal interaction has a tangible impact on community health. Studies show that people who live in places where a larger share of the economy is in the hands of locally owned businesses take a more active role in civic affairs. These communities come out ahead on various measures of social well-being. They have lower rates of poverty, crime, and infant mortality, and are more resilient in times of adversity. Their citizens are far more likely to attend public meetings, volunteer, and even vote than those living in areas dominated by big corporate chains…

Although individually they are considerably smaller than their big-box retailers, collectively, independent stores stock a much wider array of products. This is because they each make their own decisions about what to carry, while at the chains these choices are determined by a handful of buyers at corporate headquarters. This is especially important with regard to books, music, and movies. Independent retailers in these categories play a much larger role in introducing and promoting new writers and artists than their relatively modest market share would suggest. Many acclaimed authors and bands insist that no one would have heard of them had it not been for enthusiastic independent merchants putting their books and albums into customers’ hands…

As shown in this book, many chains rely on sophisticated pricing strategies to foster a perception among consumers that their prices overall are lower than they actually are, and they often enter new markets sporting steep discounts only to raise prices once rival businesses have closed. The only way to ensure vigorous competition and protect consumer welfare over the long term is to maintain a market with numerous competitors.

There is nothing preordained or inevitable about the rise of mega-retailers or about their continued dominance. We could change course. When American colonists forced their way onto three ships docked in Boston harbor in 1773 and dumped more than ninety thousand pounds of tea into the sea, their actions were as much a challenge to global corporate power as they were a rebellion against King George III. The ships were owned by the East India Company, a powerful transnational corporation. The company had recently suffered losses, in part because of an American boycott of its merchandise. In response, the British parliament passed the Tea Act, which exempted the East India Company from paying taxes on tea it sold in the colonies. The aim was to enable the company to undercut small competitors, all of which were subject to the tax, and drive them out of business.

The British government and the East India Company were betting that the lure of cheap tea would overpower any sense of principle. But they misjudged. The colonists continued to support independent merchants and boycott East India tea. The Boston Tea Party, and the British retaliation that followed, ultimately led to an organized American boycott of all British goods—homegrown and locally made became the fashion of the day—and, two years later, to the Declaration of Independence. Local self-reliance and dispersed ownership, the colonists judged, were essential to political freedom and democratic self-government.