Unchained in America

When it comes to shopping, most of us Americans see ourselves as consumers instead of members of a community. And as consumers, we’re interested in buying things at low prices — not in helping our town or city to survive economically. A recent online article in The Boston Globe about a 16-year campaign in St. Albans, Vermont to stop a WalMart from opening illustrates this attitude.

Chain Stores vs. Local Retail Stores in St. Albans, Vermont

The debate in St. Albans over WalMart pits the big-box giant against the local retail stores. If you’ve read my blog posts about Frito-Lay’s “Lay’s Local” marketing campaign, you can see that the issue between Frito-Lay and local retail stores is similar to the issue between WalMart and local retail stores in St. Albans. Throughout the country, Frito-Lay, which is the multi-billion-dollar snack food division of the global food conglomerate Pepsico, is undermining local economies. And throughout the country — as personified in St. Albans — the global chain store WalMart is undermining local economies.

In St. Albans, WalMart wants to build a 160,000-square-foot Supercenter in a corn field. That 160,000 square feet, by the way, is around twice the size of a football field, not counting the acres of paved-over parking spaces that will go with it. One of the opponents says that if WalMart had agreed to go into a 75,000-square-foot store in the downtown area, it would have had its store long ago.

But WalMart didn’t want that concession because supposedly it would cost too much to build underground parking. Instead, WalMart insists on building its 160,000-square-foot Supercenter in the cornfield. What WalMart doesn’t say, though, was that a small downtown store doesn’t fit its business model of building gigantic Supercenters outside downtown areas, which forces people to drive to them do do their shopping.

What the WalMart Supporters Claim

In the article, The Boston Globe says that the WalMart supporters labeled the opposition “as elitist for keeping jobs and cheaper goods out of a county that could use them.” A constant refrain all across the country from people who support opening a WalMart in their communities is that the WalMart store will let them buy things more cheaply than they could from local retail stores. The article quotes Bibbi Jo Magnan as saying — hopefully, with some exaggeration:

You can’t even buy a pair of underwear here. Well, you can, but it’ll cost you $30.00.

The WalMart supporters also claim that the 6,000 residents in the town need the jobs — despite the fact that, if WalMart opened, twelve local businesses would close and forty townspeople would lose their jobs. After all, says one supporter, “The need for employment outweighs the need for a cornfield.”

The developer, Jeff Davis, maintains that the WalMart supporters’ concern for low prices is a reasonable one:

If they can save a few bucks at a store like Wal-Mart, that’s a serious concern to a lot of people.

And WalMart spokesman Keith Morris labels the WalMart opponents as Luddites:

You can’t live in the past and say people should ride horses and grow their own vegetables. People are shopping, and if you don’t provide the opportunities, they will travel elsewhere to find those opportuities.

At least one supporter, Ron Vincent, seems to be conflicted when he says that he wants “to see the downtown do well, but we need to have that store.” Apparently Vincent hasn’t read studies that indicate how opening a WalMart generally kills a town’s downtown area. It seems, too, that many of the WalMart supporters don’t know about the economic analyses that show that when a WalMart opens, it often replaces higher-paying jobs that the defunct local retail stores supported with lower paying jobs in its own store.

Stacy Mitchell gives a good example of this in her book Big-Box Swindle. She talks about the Huffy bicycle manufacturer in Celina, Ohio that sold its bikes to WalMart. Every year, though, WalMart kept pressuring Huffy to lower the price of his bicycles. Finally, in 1998, Huffy had to close down its fifty-acre factory and relocated to China in order to keep selling bikes to WalMart. Huffy paid its 650 union workers $11.00 an hour plus benefits.

A few years later WalMart opened a Supercenter in the same location where Huffy had been. The town fathers were thrilled that WalMart had chosen Celina for its big-box store. And plenty of people in Celina wanted WalMart jobs that paid $7.00 an hour — $4.00 less than what Huffy had paid.

The WalMart supporters also don’t realize that, except for loss leaders such as half of the items in its grocery department and its entire CD department, WalMart’s prices are usually just as high as those of the independent stores — and, in some cases, even higher. WalMart can afford to sell groceries and CDs below cost because it can make up for the losses in the other departments. But a local grocery store or a local CD store can’t afford to sell its products at a loss. Oftentimes, too, WalMart will under price products a local retail store is selling until the store goes out of business. Then WalMart will raise the prices of the products to what its now defunct rival was charging.

You might think that consumers would compare costs and notice the higher prices of the products big-box stores like WalMart and Target and Home Depot don’t use as loss leaders. However, the chains’ pricing experts know that most consumers are familiar with the prices of just a few products such as diapers, bannanas, CDs and other commonly bought items. So the chains price those items under cost and increase the prices of the other products they sell. Because consumers know they’re getting a good deal when they buy the items used as loss leaders, they assume — wrongly — that all the other products in the store are cheaper, too.

What the WalMart Opponents Claim

The WalMart opponents want to maintain the viability and character of the St. Albans downtown area. Right now, only four WalMarts operate in Vermont. Three occupied existing stores and are 75,000 square feet. The fourth is a 115,000-square-foot Supercenter build on open land.

The opponents in St. Albans fear that if WalMart succeeds in opening the Supercenter in the cornfield, it will mark the beginning of the “WalMartization” of Vermont and the disappearance of the state’s green fields and hills. They’ve also seen how WalMart impoverishes and kills downtown areas, and they don’t want that to happen to their town — or any other part of Vermont. The WalMart supporters, they say, “are being materialistic in forfeiting natural resources and the downtown for inexpensive wares.”

The PR and Marketing Campaign That Turned Us into Consumers

Our focus on low prices is what makes big-box stores such as WalMart, Target, and Lowe’s so successful — especially in difficult economic times. As consumers, though, we haven’t always been so conscious of low prices. In fact, not so long ago, we didn’t even see ourselves as consumers but as members of our local communities. According to Stacy Mitchell in Big-Box Swindle, the change in how we perceive ourselves is a fairly recent phennomenon that began after World War II in response to — guess what? — an anti-chain movement!

When I read about the “first anti-chain movement” in Mitchell’s book, I had a sense of dejà vu. Perhaps you will, too. Here’s what she says.

America’s First Anti-Chain Movement

Although chain stores developed in the U.S. before World War I, they began to really thrive after the war. The Great Atlantic & Pacific Tea Company (A&P) was the largest chain store of the pack. It sold 11% of the nation’s groceries and was responsible for 2.5% of all retail sales in the country. That 2.5% figure might seem small to us today, but back then it was a lot. A&P was yesteryear’s WalMart. (In 2006, when Mitchell’s book was published, WalMart sold 10% of all retail sales.)

In the 1920s and 1930s, most people identified themselves primarily as members of their communities and were interested in the welfare of those communities. They saw all these chain stores moving into their cities and towns and putting the local retail stores and local grocery stores out of business. They also saw how the chain stores hurt the community. Just like today, the money shoppers spent in the chain stores left the community to go into corporate bank accounts in some other part of the country. And the CEOs who ran the chain stores weren’t interested in the communities in which their stores were located, but only in the money they could make from shoppers.

Gradually, a huge groundswell of popular opposition arose agains the chain stores. A lot of the slogans people used to protest the chain stores — such as this one from Missouri — seem familiar to us today:

Keep Ozark Dollars in the Ozarks.

Cities, towns, and states began passing laws against chains to prevent them from killing local businesses. States even began taxing chain stores. Finally, Congress got involved. In 1938, a group of congressmen sponsed a tax bill that would put the chain stores out of business. The chains fought back with a massive PR and marketing campaign that was aimed at changing the perceptions of the chain’s

• Employees
• Farmers and other suppliers
• Communities in which the chains were located
• Customers

How the Chain Stores Changed Their Employees’ Perceptions

In the late-19th and early-20th century, company owners saw their employees as automatons. Consequently, managers called their employees by their employee number. But now — under orders from corporate headquarters s– managers began using the employees’ names when speaking to them. Up till then, the employee also received low wages. Now the chains raised their employees’ pay. The employees also had their workloads decreased.

To win over organized labor, A&P and the other chain stores finally allowed their employees to form unions — something they had long fought against. But union recognition came at a high price: the American Federation of Labor agreed to oppose the congressional anti-chain legislation.

How the Chain Stores Changed The Farmers’ and Other Suppliers’ Perceptions

A&P and the other chain groceries bought their produce from farmers. If the farmers had a bumper year, they’d be paid lower proces for their goods and so lose money. Now the chain stores made the farmers think they cared about them by purchasing their surplus crops of oranges, walnuts, turkeys, and and other items. The chains lost money in those deals, but they gained the support of the farmers.

The chains treated their other suppliers the same way.

How the Chain Stores Changed the Perceptions of the Communities’ in Which They Were Located

Corporate headquarters ordered the managers of their various stores to join the local chambers of commerce. By joining a chamber and showing up at its meetings, chamber members began to think of the chain stores as caring members of their community. Corporate headquarters also sent out a bevy of public speakers to go to civic functions and clubs and talk up the great things the chain stores were doing for the community.

How the Chain Stores Changed Their Customers’ Perceptions

The biggest change came about in how customers saw themselves. Through radio and newspaper ads and public speakers, the chains began focusing on how they saved people money by bringing them quality goods at low prices. The media blitz avoided any mention of how the stores affected the communities by putting local retail stores out of business. The more the customers saw themselves as consumers, the less they saw themselves as citizens of their town or city or as workers, farmers, and manufacturers.

The campaign worked. Not only did Congress not pass the bill in 1939, but people in towns and cities throughout the country no longer saw themselves as members of the communities in which they lived. No longer were people concerned that the money they spent at chain stores left the community. They cared only about getting things at lower prices than before. And no longer were people troubled because local retail stores and local grocery stores were being put out of business by chain stores. All they cared about was buying things more cheaply than before.

People had become consumers.

The Second Anti-Chain Movement

Today citizens are formenting a second anti-chain movement. The reasons for their “revolt” are similar to the ones in America’s first anti-chain movement.

Chains Don’t Care About the Community

Chain stores such as WalMart and Target try to make everyone think they’re concerned members of the community. The chain stores give donations and grants to local communities — often after corporate approval. And, based on a business decision at corporate, chain stores often engage in cause branding — associating themselves with a particular cause, such as cancer or diabetes. By linking itself to a cause, the chain makes consumers think it cares about that cause. But the chain doesn’t really care. The corporate honchos hire a marketing company such as Cone that specialize in cause branding to develop a strategy they can use to gain consumers’ loyalty by supporting a particular cause. After all, as Cone says on its website:

Today, a company that directs its unique assets to have a significant and sustainable impact on society will strengthen reputation, employee morale and stakeholder loyalty in an engaging and authentic way.

For chains, supporting a cause is just another business decision.

Even when a chain donates money to a community, studies indicate that locally owned stores actually donate more money to their communities than chains do. The reason is because the owners of local retail stores and local grocery stores see themselves as members of those communities. The people who run the chain stores are absentee landlords who don’t care about the community.

Chains Drain Money from the Community

No matter how much a chain extols its virtues, the fact still remains that the chain store drains money from the local community and sends it to some far-off corporate headquarters. Money spent at a local store stays in the community and helps the community.

Chains Pay Low Wages and Encourage Part-Time Work

Chains tend to pay low wages. Anyone who’s read Barbara Eherenreich’s Nickel and Dimed: On (Not) Getting By in America, has read first-hand accounts of how chains don’t pay living wages. Chains also rely heavily on part-time workers to avoid the costs of paying them health care. Some chains now are reducing the numbers of full-time workers to save money and reduce costs.

Local businesses often pay better wages than chains. They also care more about their employees’ welfare. In hard economic times they either lay people off unwillingly or try to work out ways to avoid layoffs.

Chains Create a Large Carbon Footprint

Chains create a large carbon footprint because they were designed to make people drive to them. That’s why chain stores like WalMart are located outside the downtown area and are surrounded by acres of paved-over parking spaces.

Downtown retail stores are walkable because they’re located along sidewalks. People who shop at them don’t leave a large carbon footprint.

Chains Create Water and Air Pollution

Because the acres of parking spaces around chain stores and malls are paved over, there’s no soil to absorb rainfall. As a result, the runoff goes into nearby streams, rivers, and lakes, creating water pollution. The necessity of driving to the chain store — either a free-standing one or one that’s in a mall — increases air pollution.

Chains Discourage a Sense of Community in Shoppers

Shoppers often need to drive miles to reach a chain store or shopping mall. That distance makes shoppers leave their communities, which reduces their sense of being part of those communities.

Local retail stores do help develop a sense of community. The owners generally are actively involved in their community and know many of their customers by name. Shoppers often know other shoppers they meet downtown. The people know one another and care about one another.

Chains Don’t Sell Quality Items at Low Prices

Before we stopped shopping at chain stores, Lisa and I were constantly frustrated by the Mr. Coffee coffee maker that we bought at WalMart. It constantly broke and we had to keep replacing it. So even though the coffee maker was cheap, we ended up paying more because we had to buy several of them instead of just one.

What’s the moral of this story? Chain stores such as WalMart and Home Depot and Lowe’s offer low-priced items. But often, to keep the prices low the manufacturers use low-quality parts. A similar item — a lawn mower, say — in a local hardware store might be more expensive than a similar one at WalMart. But chances are that the parts used in the lawn mower are of higher quality than those in the WalMart mower. Consequently, the more expensive lawn mower will last longer. So which lawn mower actually costs more: the cheaper one that will break down sooner and need to be replaced sooner or the more expensive one that will last longer?

By the way, if you see two similar products at a chain store and at a local store, compare the model numbers. Chances are the numbers are different. One was made specifically for that chain store and the other for the local store.

Community Members First — Consumers Second (or Third . . . or Fourth . . . )

America’s second anti-chain movement is about the same issues as the first movement. It’s time we begin seeing ourselves once more as members of our towns and cities instead of as people whose role is to buy things at low prices.