Megaretailers and Local Economies: Oil and Water?


The Oakland Institute’s report on the impacts (read: evils) of supermarket consolidation on local economies, called Facing Goliath, has just broken water (the Oakland Institute is a California-based policy think tank). The report is, to be sure, punctuated with left-leaning rhetoric—not that I really have a problem with that, just pointing it out—but some of the points writer Katy Mamen makes are startling indeed: 

  • A study of several industries in the Maine economy revealed that for every dollar spent at a chain, only 14 cents were then spent by that chain in the state’s economy, whereas for every dollar spent at a local business, 53 cents were put back into Maine businesses.
  • For many decades, the top five food retail firms in the US controlled less than 20 percent of the market. From 1997 to 2000, the top five firms (Wal-Mart, Kroger, Costco, Supervalu/Albertsons, and Safeway) increased their market share from 24 to 42 percent of all retail sales.  By 2003, they controlled over half of all grocery sales.
  • Wal-Mart grew from selling no groceries in 1987 to becoming the leading food retailer shortly after 2000, now outselling second-in-line Kroger by almost a two-to-one margin in groceries alone.

While my intentions when it comes to spending my dollars always start out snow-white, sometimes reality—in the guise of the impractical juncture of my broke-ass bank account, weak time-management skills, and inconvenient location—intercedes. I must confess to having shopped at all five of those gigantic retailers before. Sometimes the farmer’s market just isn’t open at three a.m. on a Tuesday night!

Small retailers needn’t despair entirely (it’s an easy first reaction, but doing so errs on the side of the cowardly and risks the self-fulfilling). Shops that offer services the big chains lack—incredible service, for instance, or superior products, or a charming ambiance—can thrive in spite of higher prices. Those things are still important to people.  

The megaretailers aren’t ALL bad.  But consumers (myself included) should know what they’re getting themselves into when they spend their dollars at a megaretailer’s. Buying artificially cheap groceries means we’ll be paying for them later somehow.

Nathalie Jordi's appetites keep her bouncing between between County Cork, New York, London and the French Alps.  When not slinging curd or interviewing farmers, she writes for Travel&Leisure, Conde Nast Traveler, Gastronomica, and her blog at www.autobiogeography.com.  Her dreams of a life spent baking, drinking margaritas, and sitting in the sun are gathering steam during her current stint as a waitress in New York City.

 

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