Is big-box bad for the Modern Family?

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Professor of Urbanism at the University of Pennsylvania, Canadian-American architect Witold Rybczynski, has this interesting slide show at Slate titled Ordinary Places. He subtitles it “rediscovering the parking lot, the big-box store, the farmers market, the gas Station” and observes:

At first glance, the big-box store doesn’t foster sociability. The no-frills environment sends the message that “we are doing everything possible to keep our prices down,” and the assembly-line atmosphere encourages speed and efficiency.

Everyone is absorbed in the serious business of finding what they’re looking for, a task the long, identical aisles don’t make easy. This is the exact opposite of shopping-as-entertainment that characterizes most malls.

He’s not the only one to characterise big-box retailing this way, but why on earth would it really matter if a big-box store does or “doesn’t foster sociability”?

As it happens, my wife and I bought eight new dining chairs on the weekend from a big-box store. We parked in a large, central parking lot surrounded on three sides by furniture and electrical stores and on the fourth by an arterial road.

We didn’t go there to socialise – we went there to buy some utilitarian items. I don’t actually go to big-box stores for sociability any more than I go jogging to meet people. Some activities are best done alone or with intimates. When I’m in the mood for sociability, I might go to a party, to dinner, to the football, to a market, walk the neighbourhood, pick up my daughter from school or go to any of the thousands of opportunities for meeting and seeing people offered by a big city like Melbourne.

But I do want to improve my social welfare! So being able to drive to a store and park directly in front saves me valuable time. I can immediately bring the items home in the back of the car, thus saving on delivery cost and getting a welfare-enhancing charge of instant gratification! But most of all, big-box stores give me choice and lower prices. As Cameron says in the second season of Modern Family “I’m sort of like Costco. I’m big, I’m not fancy, and I dare you not to like me”.

I’d be pretty confident that people on an average income, or less, would appreciate the lower prices and convenience of a big-box store much more than they’d feel one lost opportunity for sociability out of many. They’d probably think someone who tells them big-box makes them worse off is a patronising wanker. The savings in time and money afforded by big-box mean they’ve actually got more resources to socialise in a meaningful way at a time and place of their own choosing.

The benefits for customers of big-box retailing are significant. The Financial Review reported on Saturday:

In the DFO Homebush, an old industrial building opposite Sydney’s Olympic precinct, the retailer sold $200 million worth of stock last year. That equates to $11,400 for every square metre of shop – a figure equivalent to that of Chadstone in Melbourne. Yet occupancy costs paid by tenants in the DFOs of about 8% are much lower than the costs of around 15% in traditional centres

In fairness, I should add that Professor Rybczynski doesn’t in any event think big-box is completely devoid of social opportunities. He goes on to say:

Yet utilitarian big boxes can be important information exchanges. Do-it-yourself centers, especially on weekends, are where homeowners find out about lawn care and paint sealers or how to repair leaky faucets. In the far-flung suburbs, big boxes also serve as community meeting places. In this Nevada Home Depot, for example, a FEMA worker hands out forms to people affected by local flooding.

I know what he means. Lots of schools and community groups raise money by running sausage sizzles outside big-box retailers like Bunnings. The standard of urban design around any Bunnings may be appalling (in my opinion – that’s a very subjective matter), but there’s surely no doubting that people like them.

Melbourne has already well and truly caught the big-box disease (DFO was started by Melburnians). I acknowledge that it has real downsides. It is a product of car dependency and hence is implicated in the costs imposed on society by oil depletion, pollution, emissions, noise and accidents. Most of them are ugly. However the focus of policy should be on addressing these substantive issues rather than on imagining problems.

15 Comments on “Is big-box bad for the Modern Family?”

  1. TomD says:

    Way too sensible a perspective and outlook on life’s daily matters! But dead accurate!!

  2. TomD says:

    … Accurate about the way people in general use and value big box stores, but in the US their establishment is often opposed in smaller communities (sometimes successfully) because the downside is that they can effectively kill off lots of smaller local stores, often with work cultures and employee practices!

    • Alan Davies says:

      In some parts of the US (I’m thinking here of examples I’ve seen in Washington State) there are standalone big-box stores in the middle of nowhere beside freeways exits. You don’t tend to find that in Australia.

      I’m not saying big-box doesn’t have its costs, just that the “sociability” argument is a crock. It’s a big call to say residents should forego the benefits of a Costco (say) in order to protect those smaller stores. I’d like to see those smaller stores innovate and come up with new commercial uses that big-box can’t do. My local village still seems to be thriving despite competition from the regional hard-top and big-box retailers. The hardware stores gone but there’re more personal services, specialist book shop, organic food, cafes, boutiques, etc.

  3. Joseph says:

    I think you are spot on with the benefits of big-box retailing. It does make me wonder why the discipline of Urbanism is so paternalistic. Why is there the need to dictate where people should live and shop and how they should travel? Fields such as healthcare clearly need experts to make decisions for uninformed patients but living / shopping / travelling are areas where most are capable of making their own informed decision. Sure there is a need for planning but shouldn’t this be to facilitate rather than dictate? Isn’t it possible to facilitate both big-box retailers and environments for smaller stores? If some consumers are willing to pay the premium for less efficient more sociable smaller stores then fine.

    • TomD says:

      Not disagreeing with you generally, but the ‘premium’ you speak of (in relation to small stores’s ‘higher’ pricing)- in the USA at least- has to be viewed in the context of big box business chains like Walmart (the world’s biggest) applying employee conditions that are not exactly admirable.

      Union organizing and membership is banned, thus eliminating the ‘right’ to collective bargaining. The ‘squeeze’ is also put on all suppliers to supply on the basis of almost unworkable margins for themselves or otherwise all (MOST) goods are made in China … with again often questionable labour and safety practices in place.

      Look at Coles and Woolworth’s ‘monopolies’ in Australia and their basically very uncompetitive pricing policies. (The arrival of Costco should finally help here, unless they join this game too.) Are the farmer’s getting their fair share of their huge ‘monopoly’ profits? I think we all know the answer to that question only too well. Think milk and dairy farmers by way of example. Poor bastards work their butts off and are tied to their daily milking routines forever (no vacations there!) and just how fairly have they traditionally been recompensed by the supermarket DUO?

      Walmart, following exposure of their methods in recent years, are claiming to have picked their game up in a few areas, like moving towards organic produce and green energy products (but this is also a smart response to an existing major shift in buyer behavior)and somewhat improving their conditions for staff.

      When many such big box stores move into an area, you would be naive to think that in the past they haven’t applied specific (highly questionable and secret, if barely legal_ pricing strategies and more to deliberately put small competitors out of business.

      Costco has a much better reputation, supporting progressive causes in politics and superior practices in many areas than e.g. Walmart. But then again who knows what occurs these days behind the scenes and away from the incessant PR campaigns they all run.

      Alan is right, smaller shopping centres and old mainstreets are fighting back with new approaches and that is certainly what they need to do.

      • Joseph says:

        I don’t think it is valid to assume that anywhere near the worst employee conditions in Australia are in Coles and Woolworths. In terms of compliance with regulation and health and safety requirements the worst offenders will always be small businesses, part because of ignorance and part because they can get away with it. Also if there is an issue with exploitation allowable under employment law then surely it is for the government to address it.

        As for the ‘huge monopoly profits’ at Coles and Woolworths I think there is an area where your average Australian is deeply misinformed. If you look at Coles results for FY10 they made an EBIT margin of 3.7% and this was their best result in years. So if they cut prices by 3.7% they would have made no profit at all. So let’s say you’re being overcharged by 1-2%, I don’t think this can fairly be described as gouging. Woolworths indeed do better but only since they have been able to run supermarkets more efficiently than anyone else.

  4. Ian Woodcock says:

    If the State Government took its own rhetoric on activity centre development seriously, ‘out of centre’ development would be regulated and big box retailing, business parks, stand-alone shopping malls and other forms of car-dependent urbanism would cease to flourish.

    It will be very interesting to see how popular all these places are when petrol hits $2 a litre, never mind $5. Freedom of choice! Humbug – all premised on cheap oil.

    • Alan Davies says:

      An interesting find. Only grabbed a really quick glance. It seems to compare high value specialty stores with big-box. Perhaps a bit like comparing Glenferrie Rd with the Northland Homemaker Centre?

      They’re not competitors so I’m not sure what it demonstrates. But at least it shows that up-market speciality retailers are not at risk from big-box.

      • Moss says:

        Yes, I wasn’t looking for it, and one must be cautious about drawing parallels with Aus, but it is interesting (just wading through the actual report now).
        I do agree that these big box stores are very convenient – but lets face it, so is fast food. The question we should be asking is whether they are sustainable in the long term (good for local economies, communities, the environment etc.)? And I would argue that broadly they are more sustainable in Australia than in some parts of the US.

  5. Mahyar says:

    I’m not sure that Melburnians invented factory outlets. The US had them decades ago.

  6. TomD says:

    To Joseph:

    It was the excesses of the American practices in relation to employees that I was specifically citing, not those of Woolworths and Coles.

    (However even here I can cite my own personal example of being a ‘casual’ supermarket packer, while at university. If you didn’t willingly sweep out the store for at least an extra half hour or more for no pay at the end of your formally scheduled and paid packing work hours, you knew you would not be asked back to work again a week later. This is just one example of my own of how casuals were exploited to supply unpaid labour.)

    Regarding your point on the two stores supposedly marginal profits, I was talking in the long term perspective of their having made huge profits over many years. And what was not being paid in the way of fair prices to the dairy farmers certainly, in fact undeniably, contributed here!

    • Joseph says:

      Coles and Woolworths are both listed companies and as such all their financials are in the public domain. The ‘huge profits’ is largely a media peddled myth, sure the absolute numbers look big but that is because they are very large organisations. Maybe they should cut prices by a couple of percent but would anyone even notice, and would this stop the criticism?
      If you want an example of Australian corporate gouging, try BHP. They dig iron ore out of the ground for $10/tonne and sell it to the Chinese for $150. When was the last time you heard BHP criticised for overcharging?

  7. […] live in the suburbs – have pretty clearly voted with their feet for shopping in malls (see here, here, here, here and here) . That seems like a rational and inevitable response to the prevailing cost […]

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