Letter to the Editor: New Downtown Kroger Would Harm Royal Oak

This following was sent to Royal Oak Patch on behalf of Auday Peter Arabo of the Associated Food & Petroleum Dealers:

The Associated Food & Petroleum Dealers (AFPD) —  founded in 1910 — represents more than 4,000 independent supermarkets, convenience stores and gas stations in Michigan and Ohio. We strongly believe that the independent entrepreneurial spirit of our small business owners is what gives special communities like Royal Oak its individual identity and helps keep dollars and jobs local.  Royal Oak is a very special place with its own ambiance and and have served the Royal Oak Community and its citizens for more than 40 year; the two stores are significant aspects of that special fabric. 

For more than 40 years, these two stores have been the provider of healthy fresh food and service for the families of Royal Oak. These two independent markets have served the community through thick and thin; through good and bad economic times; always with the best service, prices, community pride and involvement.  They have sponsored endless activities in the community and really care about their customers.

Now, you face what may be the biggest issue Royal Oak has seen in years; whether a national retail chain, Kroger, who is based out of Cincinnati, Ohio really belongs or fits within the confines of Royal Oak.  The decision to allow Kroger to open in Royal Oak will forever save the culture of this city. Do we want follow the foolish trend of other localities who have been enticed by national retailers dollars and empty promises to open up within their jurisdiction, only to regret it after all the small businesses around the city have close their doors? Just go ask the people in New Hudson, Michigan what has happened to the small businesses once Wal-Mart opened its doors. 

This is a fight over Royal Oak and its quality of life.  Today, the City of Royal Oak is smaller than it was ten and twenty years ago and residents will not buy more groceries just because a Kroger opens their doors in the community.  The pie does not get bigger, but the big guys from Cincinnati with all their marketing dollars will make money off the hard working backs of this community and send it to Ohio and its shareholders!

So the issue of denying this location to Kroger is all about fairness and doing the right thing.  We cannot afford to sell out to the big guys from another state!  The traditional notions of fair play and substantial justice require denial of this Kroger location in Royal Oak.  Fairness and respect for the independent grocers like Holiday and Hollywood-and all they have done and continue to do for the Royal Oak community should be embraced, not forgotten about. 

Legally speaking, the planning commission must deny any plan that is “detrimental to the economic welfare of the city”!  There is plenty of prima facie evidence and research which shows that a Kroger in Royal Oak would definitely be detrimental to the welfare and economy of this City and its residents.  Some localities fearing loss of independently owned businesses in their communities and an increase in traffic congestion have required national retailers to conduct an economic impact study on their dime before any commission can even hear their case.  With marketing giants like Kroger, talk is cheap because they have limitless resources compared to independents like Holiday and Hollywood Markets.  They need to prove this Kroger would actually help the City with empirical data, because other localities clearly are indicators of what happens to independent family owned businesses when a national retailer comes into town.

Furthermore, a 2004 study in Chicago looked at 10 locally owned-independent retail stores and restaurants and compared them to nationally recognized retail chains competing in the same neighborhoods. The researchers concluded-that for “every $100.00 spent at one of the independent businesses, $68.00 of additional economic activity was created. The study concluded that spending the same amount at a “retail chain” generated only $43.00 in additional economic impact. (The Andersonville Study of Retail Economics, 2004)

The research is overwhelmingly and clearly establishes that national retail chains tend to harm the economy of a locality that already has developed independent retail providers-by eliminating 1.4 jobs at other independent retail stores.  (The Effects of Wall-Mart on Local Labor Markets, Economist David Neumark, University of California, January 2007).  In other words, a Kroger “down” the street from the independents like Holiday and Hollywood Markets will NOT create jobs overall, but will cause a job loss for the community!  Simply put, jobs will be eliminated. Don’t let Kroger fool you, their number one grocery competitor nationally is Wal-Mart! 

The sales gains at a “national retail chain” results in the significant drop of revenue at existing independent businesses, resulting in layoffs or even closure!  In other words a Kroger down the street from the Hollywood and Holiday Markets will definitely cause over saturation rather than an increase in the money that residents spend.  As we previously mentioned, Royal Oak has less population now than before.  Where are Kroger’s sales supposed to come from, neighboring cities?  Don’t be fooled, the average grocery customers come from only a two mile radius.

This proposal places public safety at risk.  How will a fire truck get through traffic generated by this new Kroger location if there is an emergency?  This Kroger will not even have enough parking spots for their customers and employees.  Where will the overflow of cars go? 

The AFPD strongly believes that fear of competition does not demand the denial of this Kroger store, but the overall loss of jobs, the detriment to the existing economic environment, and detriment to the very fabric of Royal Oak does cry out loudly for a denial!  In terms of keeping money in the Royal Oak Community, nothing beats the independent grocer.  Please realize the grass is not always greener on the other side.  This commission needs to stay true to the citizens of Royal Oak and its existing businesses that have been here and love to serve the community.  Please do not focus or be mesmerized by corporate dollars and names, because at the end of the day, Royal Oak and the State of Michigan will only survive and prosper if we stay local and support one another!  

– Auday Peter Arabo is the president and CEO of the Associated Food & Petroleum Dealers.