Posted on 8-3-2003

Breaking The Chains

When you spend $100 at the chain Borders Books & Music, your purchase
creates only $13 worth of local economic activity. That same $100 spent at
a locally owned book or record store generates $45, or more than three
times as much local economic activity.

That's the conclusion of a new study conducted by Civic Economics and
published by Liveable City in Austin, Texas. The study, "Economic Impact
Analysis: A Case Study," examines the local economic impact of two of
Austin's venerable independent businesses---Waterloo Records, widely
considered to be the best music store in the nation, and Book People, a
beloved, 32-year-old bookstore.

The study compares their contributions to the local economy with the
economic return the community would receive from a typical Borders store.
The study was prompted by plans to develop a retail complex that will
include a 25,000-square-foot Borders outlet and a Whole Foods store at the
same intersection where Waterloo and Book People are located. The
development is slated to receive $2.1 million in public subsidies. "This
analysis demonstrates a clear failure of public policy to steer desirable
development at the site in question," the study concludes. "As presently
configured, new development at the corner will yield a net loss to the
local economy. Moreover, previous decisions have placed the city in the
position of subsidizing such an outcome.

The study concludes that a typical Borders store generates $820,000 in
local economic activity, compared to $2.8 million generated by Book People,
which is roughly the same physical size as Borders at 22,000 square feet.
Waterloo, which is smaller but has higher sales per square foot, pumps $4.1
million into the Austin economy. Finally, the study looks at the likely
competitive impact of the proposed Borders store. The study estimates that
half of Borders' sales will be siphoned from Waterloo and Book People.
"Redeveloping this corner is important, but it must be done without hurting
the economy and nearby local businesses," declared Bill Spelman, chair of
Liveable City. The group hopes the study will persuade Austin to withdraw
public subsidies for the project.

For a copy of the Austin study, go to Liveable City at www.liveablecity.org


Buy Local Campaign Goes Political

The Greens will be launching a "Buy Local" campaign in April. The first
public meeting will be held in Auckland, 12th March, followed by a tour to
various locations throughout the country.

12 March - Auckland - 7:30pm - Fickling Convention Centre, 546 Mt Albert
Road, Three Kings, Auckland. Queries phone 361-5925 Speakers: Green MP
Mike Ward & Warren Snow - Envision New Zealand

To find out more details about the public meetings in the following
locations (see next page - there are more locations that will be added)
contact: Mike Ward 04 470 6891 mike.ward@parliament.govt.nz Green's Buy
Local Campaign Tour: 14 April-Te Kuiti, 15 April-Morrinsville , 22
April-Tauranga, 23 April-Rotorua, 24 April-Taupo. For more information
about the Green Buy Local vision: www.greens.org.nz/campaigns/buylocal/



UK Govt Rejects Big Box Stores

In a move that could derail big box development projects throughout
England, Deputy Prime Minister John Prescott has rejected a bid by the
furniture chain Ikea to build a 300,000-square-foot store (seven times the
size of a football field) outside the city of Stockport. Deputy Prime
Minister Prescott said the proposed store violated several provisions of
both national and local planning policy. Major factors included the store's
impact on the vitality and viability of Stockport's downtown and other
nearby town centres, and the fact that it would foster increased automobile
usage.

Mr. Prescott declared that local authorities had not conducted a
"sufficiently rigorous assessment of the likely economic impact of the
proposed store." He said that Ikea's claim that the store will bring more
traffic to Stockport's town centre was probably overstated and unlikely to
offset the store's negative economic impacts on the downtown and other
smaller towns nearby. Mr. Prescott suggested that Ikea substantially
reduce the size of its stores and locate them in or adjacent to town
centres. He said the company's approach to retailing---building massive
out-of-town stores primarily accessible by car---ran "counter to the
Government's objectives to ensure sustainability and promote social
inclusion."

Before approving out-of-town retail projects, local planners must consider
the development's impact on the downtown's economic vitality, potential to
attract new investment, mix of goods and services, visual character, and
"role in the economic and social life of the community." Ikea plans to
appeal the decision through the courts. Sprawl opponents, including the
Council for the Protection of Rural England, hope the decision will be
upheld and herald a stronger national commitment to maintaining vibrant
local economies.



Big Boxes Trying To Swallow Pharmacies

The Retailers Association of New Zealand has mounted a fresh campaign to
overturn pharmacists' control on owning chemist shops. The country's
largest general retailer, The Warehouse and supermarket heavyweight
Progressive Enterprises will be among submitters arguing for a change to
the bill removing chemist shop ownership. The retailers claim they will
offer consumers lower prices. However three recent surveys in the US (see
links below) have found that independent pharmacies had lower prescription
drug prices compared with chain drugstores, supermarkets and mass
merchandisers like Wal-Mart.

A submission by Envision NZ was made to the Select Committee on the Health
Practitioners Bill asking that the committee consider the wider impacts of
allowing big chains to have in store pharmacies. Key points in the
submission were as follows:

§ Pharmacies contribute to the overall health of the community by being
local and providing services that chains never provide. Local ownership
strengthens local economies. Economic decline leads to social decline,
which in turn leads to the decline of people's health.

§ If the local pharmacy closes it will be the final deathblow to many small
community shopping centres because they are very often the anchor business
that keeps the other businesses going.

§ Claims by big chains that they will deliver cheaper prescription drugs
are incorrect. Three recent surveys in the US have found that independent
pharmacies had lower prescription drug prices compared with chain drugstores.


"Why don't young people open up shops anymore?" Peter Kenyon, Australian
Development Expert presentation to the Town Centre Association New Zealand
Conference - Invercargill Dec 2002.

"People don't shop anymore. They go to The Warehouse. The whole idea of
going to town has just gone out the door. I know people who treat it as
entertainment. Instead of doing things on the weekend they just go to The
Warehouse." Violet Hogan, Whangarei

"We seem to have got ourselves into an awful muddle. The local service
station cannot fix a puncture but does offer hot bread, the chemist offers
pickles and the supermarkets are going to sell petrol. Efficiency comes
from division of labour. This is the rationale behind specialist shops.
One has a wide range of choice and assistants who are sufficiently
knowledgeable to be able to give advice. However, soon we will be limited
to warehouses, with just a couple of leading brands of best sellers of each
particular product. The consumer will be denied both choice and advice.
While such stores may be profitable, they are ultimately not efficient from
the consumers' point of view." Maureen Coxhead - Manurewa, Auckland
(Letters to the Editor - NZ Herald)