Monday, December 18, 2006

The loss of neighborhood culture

Our friend Mary Ann lives on the Upper East Side of Manhattan. She's a block from Central Park and the Metropolitan Museum of Art, and across the street from the Czech embassy. (Strangely, there was a twelve-foot inflatable rat on the sidewalk in front of the Czech embassy. I can't say that I fully understand the cultural implications of that.)

She's on the corner of 83rd and Madison Avenue, and along Madison Avenue there are many tiny little retailers: butchers, bakeries, delis, wine stores, shoe and specialty clothing stores, on and on. Gina and I spent a few afternoon hours exploring some of these little nooks. We noticed, though, that there were large Banana Republic and Gap stores in the neighborhood, as well.

That evening at dinner, Mary Ann complained that, as rents increase, the small shopkeepers were being forced to move out and were being replaced by large chain retailers. The independent commerce that made this area unique is dying, being replaced by the same products that anybody can buy anywhere. This is why I have a big problem with franchise or chain restaurants, and I avoid patronizing them.

Now, I'm a big fan of small business owners, and I recognize that many local franchises are owned by local businesspeople. For instance, I have a friend that owns a Quizno's and another with several Supercuts stores. I also recognize that large national chains became successful because they have a product or service that works and that people want.

But because of their scale, when Macaroni Grill enters a local neighborhood, they have such large economic advantages over the little family Italian restuaurant that it becomes nearly impossible for the local restaurant to compete. A high volume restaurant, like Chipotle, has supply cost leverage that an independent local restaurant can't match, allowing them to, say, have a person that does nothing but make salsa, so the salsa you get is always the freshest possible. A small, independent family Mexican restaurant can't do that and still maintain the same profitability.

A couple of years ago, Tucson recognized that they were losing their local restaurant base and its associated culture, so the mayor formed a buying cooperative for independent restuarants. The cooperative allowed the independents to get some supply chain economies and helped improve their competitiveness.

The bottom line is that, unless the chain restaurant gives me something I can't get at the independent, I'm going to keep going to Murphy's or the Golden Lotus, rather than Red Robin or PF Chang's. I don't want to live in a world without the independents. Small is beautiful.
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