By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
By Jesse Marx
By Maggie LaMaack
By Jake Rossen
Stacy Mitchell is the author of Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses. The book is the result of nearly a decade of work Mitchell has done as a researcher with the Minneapolis- and D.C.-based Institute for Local Self-Reliance, where she's helped independent businesses survive the ever-increasing dominance of retailing behemoths like Wal-Mart and Home Depot. Mitchell marshals remarkable statistics (between 1990 and 2005, for example, the amount of retail space per person in the United States doubled) and telling anecdotes to compellingly document the nefarious impact of mega stores. A Macalester College grad, Mitchell lived in St. Paul for nine years. She spoke to City Pages last week by phone from her current home in Portland, Maine.
City Pages: You make the case that the consolidation of the retail sector is a fairly recent phenomenon. For instance, in 1996 the top 10 chains accounted for 15 percent of consumer spending, while a decade later they take in almost a third of all dollars spent. Has there ever been a time in the U.S. where retail was consolidated in so few hands?
Stacy Mitchell: The last 15 years have been unprecedented in history in terms of the level of consolidation. There's nothing like it. You can find the roots of these trends going back to the late 1950s and the beginnings of the mall boom. But the acceleration of corporate retail market expansion is just dramatic and beyond anything we've ever seen.
CP: Half of Americans now live within five miles of a Wal-Mart. Don't we reach a saturation level at some point?
SM: Wal-Mart captures one of every 10 dollars we spend nationally at retail stores. That's one out of 10 dollars of everything—groceries, books, hardware, clothing, jewelry, furniture, everything. That's just staggering.
In Arkansas, Wal-Mart gets almost 20 percent of retail spending. I believe that half of all Wal-Mart Supercenters are in just 13 states. Wal-Mart wants to have 20 percent of the market nationally, which means essentially a doubling of its current footprint. I think people really underestimate the degree to which these companies have a carpet-bombing mentality.
CP: You don't really differentiate between Target and Wal-Mart in terms of their business practices. Yet Target has not suffered the kind of backlash that we've seen against Wal-Mart in recent years. Why do you think that is?
SM: It's more of a style than a substance issue. They have done a good job of associating themselves with certain kinds of ideas and values that are appealing to urban liberals. Unfortunately, there are a lot of urban liberals who have been taken in by that. It's very frustrating to me because there is virtually no difference between these two companies, other than the fact that Wal-Mart is larger. [Target] plays the same game of sending suppliers overseas. It has the same poor wages and benefits. It does the same thing to locally owned businesses. It has the same kind of predatory tactics. All the way down the line it's the same company. By focusing only on Wal-Mart the danger that we face is we're going to wind up with exactly the same problem but there's going to be a different name on the box.
CP: Can you point to an example of how Target has ingratiated itself to urban liberals?
SM: Some of it comes out of their corporate giving, which they're very good at marketing. They have been running full-page ads in the New York Times, and I imagine in other newspapers in big cities that they're trying to enter, where they really tout that corporate giving. Basically they're trying to buy their way into those cities by associating themselves with causes that people hold dear.
CP: You document how big-box retailers often get massive government grants. One particularly jaw-dropping example is Cabela's, which received $92 million in grants and tax breaks to open a store in West Virginia. What is the justification for these handouts?
SM: Local governments believe that these stores are going to create jobs and economic development and tax revenue—and it's a myth. We know conclusively at this point that these stores eliminate more retail jobs than they create. We also know that the cost of public services for these stores—all the road maintenance and the police services for these big, sprawling stores—are really quite high. And we also know that these stores drain money out of the local economy, because they don't buy goods and services locally the way a local business does. [With] a big-box retailer, about 85 cents out of every dollar you spend there leaves the community immediately. They just suck dollars out. So you end up giving a subsidy to a company that's going to take far more out of your local economy than put back in.
The metaphor that I use in the book, that I think is quite apt, is one of colonization. This is very much like what the European superpowers did in Africa and other places, where the goal is not to enrich the local population but to extract and appropriate their wealth. That's what these big-box chains do.