Tuesday, March 17, 2009

Book Review: Big-Box Swindle (a second opinion)

Big-Box Swindle by Stacy Mitchell is a revolutionary book in the style of Omnivore’s Dilemma. Mitchell investigates the effect of big-box stores on the economy and her discoveries range from illuminating to infuriating. Big-Box Swindle covers about 100 years of retail business history. I am too young to remember a time before there were malls, but I found Mitchell’s observations to be fascinating since I live in a place that perfectly illustrates many of her points. She traces the history of retail sales from the time of "Main Streets" lined with locally-owned shops, to the addition of strip malls farther away, to the development of shopping malls, to big-box stores, to bigger-box stores and malls of big-box stores. At each stage, the retail business moves farther out from the city center and customers move from the previous stores to the newest stores, leaving empty stores behind. Each stage also requires a longer drive to get there. This book goes a long way towards explaining why our lifestyle uses so much more oil than that of the Europeans.

Big-Box Swindle covers what has happened to our country and briefly touches on how the big-box retailers have moved into other countries like Mexico. This section left me livid since I can imagine the suffering Wal-mart, particularly, has caused to the indigent cultures. Even Costco, who I’ve always regarded as one of the "good" boxes because they pay their employees better, ought to be ashamed of itself. Beyond that, Mitchell writes about how the big-box stores treat their domestic and overseas suppliers (not good). The way they use predatory pricing to drive their competitors out of business should be illegal and the laws should be enforced. I don't know how these people sleep at night.

The last part of the book concerns how our government at all levels has actually helped the big-boxes take over. The short-sightedness is so bad it’s baffling. But then Mitchell outlines strategies that cities have used to successfully take back control of their communities and she devotes a chapter to successful strategies that independent retailers are using to fight back. I think this book ought to be required reading for all members of city councils and planning commissions. It might even help the officials in my own city understand why they’ve been unsuccessful in their numerous attempts to revitalize downtown.

So I thought the book was really valuable and important. It’s well researched with a blend of facts, figures, legalities and case studies. It’s a little thick, but it's readable and it kept my interest. All the way through, though, I kept thinking it was missing something. I could summarize the whole book in four words: Chain = bad, Independent = good. I think there's a lot of middle ground that is completely overlooked. Mitchell isn't just against Wal-mart, she's also against shopping malls, Starbucks, and every chain business from the beginning of time (somewhere in the early 1900's). She gives illustrations so I will, too.

Case 1: One of the biggest criticisms of chain stores is that the dollars don’t stay in the community. My son’s first babysitter was a highschooler who happened to be one of my students. I was aware that her father owned several fast-food franchises here in town, but it wasn’t until we visited her house one day that I realized how well off they were. I didn’t even know that such a mansion, on such an estate, existed in my town! I don't mean to endorse fast-food chains -- I ususally avoid them because of where they source their food -- but believe me, in this case a lot of the profit stayed right here.

Case 2: Mitchell praises communities that put limits on the size of stores and limit the numbers of "formula (chain) businesses." One of my favorite grocery stores is over 100,000 square feet, a size condemned in the book, and it is an employee-owned chain. My town's beloved hardware store is locally owned, and bigger than a Home Depot. For nearly everything else, I shop at Bi-Mart, a box chain here in the pacific northwest. Bi-Mart was acquired by an out-of-state developer a while back, but the employees banded together to buy it back and now it's employee-owned, which means a couple family friends are part owners. My favorite restaurant is Burgerville, a pacific northwest fast-food chain that works hard to source their ingredients from local farmers. By Mitchell’s logic, all of these businesses are bad. Maybe I'm being a little too hard on her, but she never acknowledges a case where a box store or a chain might actually be good.

Case 3: About seven years ago, our out-of-work next-door neighbor went to a garage sale and inquired about a double-wide refrigerator. He was told that it was being sold with the business, an independent restaurant that happened to be on our neighbor’s speed-dial. So he bought the restaurant. How local is that! He changed the location and business took off. So he opened another, and another. Some are in other communities and often someone asks him if they can purchase a franchise. If he becomes a chain, does that make him a Bad Guy?

These are some of the questions that bothered me as I read Big-Box Swindle. So yes, I thought it was good and I got a lot out of it. I already knew many of Wal-mart's transgressions, but now I will also avoid Target and the like (although I'll still shop at Staples since it's so much more pleasant than being stared at by the people in the local stationery store). And I agree with most of what Mitchell said. I encourage everyone to read this book, but consider that life might not be quite so cut-and-dried as the author makes it out to be. I’ll give it 4 out of 5, and I’d love to hear some more feedback. If you'd like to read another review, check out Green Bean's right here.


Chile said...

So maybe she should have concluded "locally owned = good" not necessarily just independent.

Thanks to the two reviews, I'd like to read this book as soon as I get some free time. But I say that about almost every book reviewed here. :)

Green Bean said...

Fantastic review, Donna. I do understand what you mean about the book. Certainly, there are exceptions to the chain=bad but they are exceptions, not the rule. An eye opening book. Glad you read and reviewed it.

Kale for Sale said...

Okay, I'm curious, why should Costco be ashamed of itself? I know why I think they should be but I'm curious as to what the author thinks.

Another great review. I love reading different takes on the same book. They give the book more depth. I'm definately going to check this one out. Thank you.

Donna said...

JAM: I hear you! I buy my son's shoes on sale at Penny's, which I consider to be better than Target, but Mitchell would rank as the same since they're both chains. My best find was a 10 cent pair of sneakers at a garage sale. They were the same style as my son's current sneakers, but they were one size larger. :)

Chili: I think "locally owned=good" is good -- it more closely matches my own philosophy. The author pretty much condemned anything that wasn't independent main street, so I think she missed some things. Good luck with that reading list!

Donna said...

GB: Glad you liked my review, since I gave BBS a somewhat lower score than you did. :) I agree about the exceptions, but there are an awful lot of exceptions where I live -- not as many as big-box, but a lot.

kale: Cuernavaca, Mexico used to be a bustling older-style Mexican town and it contained an historic old hotel surrounded by acres of gorgeous trees. I've been there, and I think I know the place. The city planners sold the hotel and trees to Costco. According to Mitchell, when the locals found out, 15,000 rallied to save the property, but Costco bulldozed it anyway, trees and all, and put in a standard Costco store complete with acres of parking. It attracted more big boxes, decimating the local economy.

Yes, I think you'd be very interested in this book!

Anonymous said...

I'm curious how you would define predatory pricing? Is it predatory pricing when a larger store sells a product for less than a smaller store? When the price at one store is more than two times lower than that of the other store? One-and-a-half times? How you would like it to be enforced and by whom? Should you decide? How about me? I don't know about you, but I prefer consumers to choose which businesses succeed or fail and not some arbitrary person like you me or, even better, politicians.

Are all consumers now destined to pay higher prices because you are bothered by lower prices? You are perfectly free to choose the store with the higher price, but so should everyone else be free to choose the lower price.

Also, I'm not quite sure why you think "keeping money in the community" is a benefit to you, me or any other person. This phrase is easy to throw around, but difficult to explain in concrete terms.