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Big Box Retail: Why Are They a Problem?


By

From 2004 till 2007, while I was a senior planner for Gainesville FL, I was given the task of preparing regulations to better manage what is commonly called “big box retail.” I conducted several months of research. The following is a summary of the problems I uncovered.

America is under siege by an epidemic of Big Box retailers (that is, retail giants such as Wal-Mart, Target, Costco, Home Depot, etc.).  Some of the many reasons why Big Box retail is deadly for communities and should be aggressively controlled by  local governments include:

Category-Killing Cannibals

Research shows that Big Box retailers do not create an improved retail environment for a community or result in a net increase in jobs. Instead, they tend to cannibalize existing, in-town retail sales and in-town (often locally-owned) jobs. This is true at both the local level and the regional level. No net increase in retail sales or jobs. Just a geographic shifting from existing businesses to the Big Box (a reason why Big Box is sometimes called a “category killer,” as all other retailers selling similar products are often wiped out because they are unable to compete).

Retail Shifts to Community Periphery

Healthy communities have traditionally had their retail activity sprinkled throughout the community. Such a pattern promotes transportation choice and builds a sense of community. Because the predatory nature of Big Box kills off most or all of the smaller retailers in a community, and because the Box needs high-capacity highway access to serve regional markets, the number of retail outlets in a Big Box community shrinks and moves to the periphery. Such a location promotes car dependence.

Breeds Car Dependency

Big Box retailers promote extreme levels of car dependency for those who live in the region—which is a lethal, downwardly spiraling trend. Excessive car dependency destroys community quality of life; significantly harms community sustainability; increases our dependence on oil, outside corporations, and foreign nations; bankrupts households and local & state governments; wipes out our downtowns; transforms us into an “anywhere USA” kind of place that eliminates civic pride and a unique community character; and ruins our natural areas. Such retailers are typically placed in peripheral locations (and have site design) which makes it impossible to travel to the store without a car. As a result, an increasing proportion of residents in a community must now make an increasing number of trips by car (thereby increasing car dependency). In part, this increased car dependency is caused by the fact that the Big Box wipes out in-town businesses that were accessible by means other than the car.

Loss of Retailers and Choices

Big Box retailers, by extinguishing local businesses, reduces consumer choice in products, since increasingly, the only products available are those that are sold by the Big Box.

Dollar Drain

Big Box retailers drain dollars from a community. Instead of cycling those dollars within the community, Big Box steadily impoverishes the community by forever draining wealth from the community and pouring it into the bank accounts of out-of-town executives who have no allegiance to the community where the Big Box resides—nor any care for the welfare of the local community (since they don’t live in the community being drained).

Encourages Sprawl

By being so excessively car-dependent and designed to serve a regional “consumer-shed” of motorists from up to 10 (or more) miles away, Big Box retailers enable a sprawl lifestyle. That is, life becomes more feasible, and therefore induces more sprawl households because sprawl is now more attractive.

Short-lived

Big Box is infamous for abandoning their boxy buildings after only a few years, typically leaving a site with a building and enormous surface parking lot that is difficult and expensive to use for another purpose. Many communities have responded to such a problem by requiring the Big Box to sign an agreement that requires that, for example, the site be restored should the Big Box decide to abandon the site.

Large, dangerous roads, parking lots, intersections

To survive and thrive, Big Box must be designed and located to efficiently serve a regional consumer market that extends several miles from the Big Box. This requires the construction of extremely large roads, intersections and parking lots. Communities often make the critical mistake of obligating large roads, intersections and parking lots for the prospective Big Box, naively thinking that such infrastructure will lessen the undesirable impacts of the Box (or even discouraging the Box from locating in the community).

Unfortunately, large roads, intersections and parking lots are precisely what the Big Box needs to thrive, and they are more than happy to either provide these facilities themselves or, better yet, have public tax revenue subsidize the construction of such facilities. These over-sized roads, intersections and parking lots that serve the Big Box end up worsening the situation, because they end up promoting the further proliferation of Big Box retail and strip commercial development. Huge roads and parking also reduce transportation safety and transportation choice, and often end up congested despite their large size (because the roads and parking are free to use).

Ugly, “Anywhere USA” appearance

Big Box is notorious for “boxy,” national formula building designs that ignore local character and tend to look identical throughout the nation. Left uncontrolled, this can lead to a significant loss of unique community character and decline in civic pride.

In sum, Big Box retail is a menace to communities – economically, aesthetically, and in terms of quality of life and sustainability. Fortunately, there are many tools that can be employed to lessen the undesirable impacts of the Box and communities must get ahead of the curve and have such regulations in place before proposals for Big Box are submitted to local government officials.

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2 Responses to “Big Box Retail: Why Are They a Problem?”

  1. Eva Kosinski says:

    The one thing that this article leaves out is the incredible level of temptation our elected officials are subject to. Big box stores do the carrot and stick thing. Let us into your community and just THINK! how many sales tax dollars we could garner for your budget. We’re BIG, and we can make more sales in a day than the little guys can in a month, and you get all that extra sales tax money. SO, what kind of breaks will you give us on property taxes/sales tax grace period/other perks, to come into your community?

    As communities hire “business retention” and “development specialist” consultant types (most of whom charge enough money to offset the new income, sigh), communities vie with one another to give ever deeper discounts to the big guys, upping the ante so that whichever community gets them is already at a disadvantage. Then when the breaks expire, the big guys go fish in someone else’s pond for good deals, and any money they lose by leaving comes off their tax returns. A win(they win) lose (we lose) situation. We need win-win strategies in this economy.

    Our councils and commissioners have to be a lot more hard-headed about who they let in and what they are willing to offer. Let the other communities get their extra sales taxes from the big guys (for as long as they last) without getting jealous enough of the extra tax money to be foolish enough to let the same thing happen on their watch. Let those other communities end up with empty store front windows and parking lots with weeds growing up through them, as they remain empty for month after month, with no new owners/renters on the horizon.

    If the community is solid enough, the retailers that are in for the long run will come. BUT they won’t if they see an environment where the newbies get all kinds of advantages and those who actually want to become long term members of the community have to compete with newbies that have been given special treatment (no matter what their size).

    Corporatism starts at the local level, by falling prey to these big promises of tax wealth. The same is true of developments that require Tax Increment Financing to be built, but that’s a longer and uglier story, but corporatism all the same. Note to our elected officials: Don’t be fooled again!

  2. […] of Boulder, Colorado, were dealing with the influx of Big Box retailers in 2011. This insightful article from former city planner Dom Nozzi talks about why the massive retailers are a bad idea for any […]

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