Tuesday, March 14, 2006

This is a little piece inspired by the earlier entry about cheap suits. That entry - like this one - was inspired by a Guardian article. This time the impact of supermarkets on local retailers is up for discussion.

Although its a 2004 article, the supermarket piece also rubbished customer loyalty programs. Which of course pricked my ears as the loyalty aspect of ShoppingFix will be of more than a little significance. The article laments that establishing supermarkets leads to a "reluctance to buy at the corner shop that starves local economies of life-blood". A Bromley, Greater London survey found that a Tesco planned for the town will result in 24mil quid LESS being spent at high street stores by 2015. And that, my friends, is the point I want to address.

I'm lucky on two counts. One, I live in Wellington where there are none of those "modern-under-one-roof" malls. Two, I don't live in Christchurch (although I did grow up there). Christchurch is a big town rife with massive malls. They all include supermarkets. Small retailers have been clobbered - with the central city retail lobby being especially vocal. Northlands Mall (pictured here courtesy of the mall owners website) is case in point. 41,000 sqm of shop space and 1,800 car parks. Enormous. Is this good for the community?

I know for sure that locally owned business is good for the community. I read somewhere that $1 spent "local" has the equivalent of $2 in local economic benefit. This multiplier effect is not nearly as strong for
spending at "non-local" stores. In some industries they call what happens to spending at "non-local" businesses "leakage" - for obvious reason. Large format retail tends away from local ownership. Where large format retail uses local suppliers the relationship is often oppressive (especially in the case of supermarkets). Large format also demands that customers drive to the shop. So not only do the goods and profits travel for miles, you've done so too.

When Labour performed the customary post election haggle, they agreed with the Greens that a "Buy Kiwi Made" campaign be initiated. As pointed out in a DomPost article last week, this makes sense on several
counts. Including a natural inclination toward "Buy Kiwi Owned". Although we're yet to see how "Buy Kiwi Made" will eventuate lets not sit on our hands. Making the multiplier effect work in your 'hood means some of the benefits of buying local are your benefits...

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