Letter to the Editor: Kroger's Plan Short-Term Gain = Long-Term Drain

This letter was sent to Royal Oak Patch by Royal Oak resident Sue E. Fabian in response to the previous day:

I thank Mike for his concern about the welfare of Royal Oak.  I have read well-researched material, however, showing that big box retailers actually siphon dollars out of the local economy.  Certainly, in the short run, sales tax helps city coffers. But I'd like to offer the following research by Dan Houston for consideration.

Dan Houston who owns his own company (Civic Economics) states: "Spending that same $100 at a mom and pop store [vs a big box store] can benefit the local economy up to 3 1/2 times more than spending it at a big box store." He calls it the "multiplier effect. In many small communities, the issue comes to a head with the imminent arrival of a large discount store ... the desperate quest for sales tax revenues places public officials squarely on the side of national merchants ... In many cases these stores expand consumer choice and offer good consumer value ... [however] local merchants generate substantially greater economic impact than chain retailers." He has researched this multiplier effect in Austin, Chicago and San Francisco when a big chain retailer was about to move in.

These are vitally important facts.  Let's base our decision on facts, not rhetoric and sounding-good theory.  For instance, I challenge Mike when he says, “a small minority of citizens” oppose Kroger’s entry and that the commissioner “supports this small minority.” How does he know this?  Only a local referendum could establish the will of the community.  He also states: “Experience has shown them that placing their store close is for good reason.”  What experience?

While Mike’s concern for tax dollars for local economics is laudable, Houston’s research suggests that looking at only generated sales taxes sacrifices long-term gain for a short-term uptick only to be followed by long-term drain. 

As for the “eyesore,” let’s be careful what is done rather than hastily fill it with a big box retailer who siphons off local dollars to corporate headquarters.  Local independents tend to hire more locals, especially in accounting and bookkeeping, and profits are recycled through the local economy.

I therefore support local merchants. One idea is an artisan's mall as done in Livonia with great success. Local artists rent small spaces to pedal their work. Check out the Town Peddler. It's really cool!  Having an artisan's mall would bring 'em in from out-of-doors where they only have the outdoors at the Farmers Market, and give them an ability to test out a "mini-store" by way of a rented cubbyhole in such a mall. It would be an incubator for more small businesses. This would also allow local farmers to bring in more produce because of having more market floor space. This makes sense as locally grown produce is a growing phenomenon given increasing food quality problems with Big Agriculture.

Check out Houston’s research, e.g. Economic Impact Analysis: A Case Study; Local Merchants vs. Chain Retailers. 

Whatever we do with this real estate, time is needed for considered thought. Let’s make Royal Oak unique through independents — it’s better economically and aesthetically.

– Sue E. Fabian, Royal Oak resident