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Market Squared: In the battle between local shops and chain stores, aren't we all just trying to get paid?

In which Adam Donaldson ponders shopping local, free enterprise and Buffy the Vampire Slayer
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I have some pet peeves. As a 76-year-old curmudgeon trapped in the body of man half that age it’s to be expected. And one of those pet peeves is news items about shopping. 

You turn on the TV at Christmas time, and you hear, “This Saturday at the area mall there wasn’t a single parking space to be had!” 

“No way!” I say sarcastically. 

And there’s that special time of year. “Bargain hunters out in force for Black Friday deals!” Or “Boxing Day deals!”

Shut the front door! You mean to tell me that people like paying for things for cheaper prices than they’re usually marked at? Do economists know about this, because this could be huge!

Okay, sarcasm accomplished. The point is that a lot of precious gigabytes are expended on predictable stories of commerce because if there’s a great equalizer in a partisan and complex political world, it’s that we all like to buy stuff we don’t need, and probably have six of already. We love shopping, and we love talking about shopping. Even the mayor. 

Like many of us, Mayor Cam Guthrie found himself surfing Facebook after 11 ‘o’ clock at night the other day, and posted a response to someone’s comment that if you shop in the south end, then you don’t shop local. And this person was not talking about geography. 

If you should find yourself in the area around Clair Rd., you’ll notice some big commercial spaces with shops, restaurants and other commercial businesses from big to small. Starbucks, Food Basics, Shoppers Drug Mart, Cineplex — throw a dart at any town on the map and it will have at least two of those things, meaning that somewhere, according to the Facebooker, there were fat cats taking money spent in Guelph and not cycling it back through the local economy. 

There is something to this. A study published in 2013 called Independent BC: Small Business and the British Columbia Economy studied how money was reinvested into communities from independent retails stores and restaurants versus those that are part of a chain. The study discovered that for every $1 million, Mom and Pop stores generated $450,000 in local economic activity versus $170,000 by chains. 

There’s a similar difference in the restaurant sector. Independent eateries generate $650,000 in terms of reinvestment in the economy as opposed to the $300,000 raised by chains. This shouldn’t be too surprising. If one owns a McDonalds franchise, you can’t go to the farmers market and buy the ingredients for the Big Mac secret sauce. And crunching all those Oreos for the McFlurries seems like a lot of unnecessary work . . .

But Mayor Guthrie is right about one thing, the owner of a Tim Hortons and the owner of a small cafe downtown both work very hard to be a success. The challenges are undoubtedly greater for the ones hanging their own shingle, but while you can walk into a Tim Hortons anywhere knowing exactly what you’re going to get, it’s not a robot that runs itself. (Yet) 

“My point in my little blurb I had on Facebook last week is just that everything is local in Guelph, really, and to pit one store against another or to slag [one] owner against another is not healthy,” Mayor Guthrie told GuelphToday.com. He’s clearly never seen Masterchef. 

The issue honestly seems more like a philosophical one rather than an economic one. No one, I think, rationally has a problem with their neighbour making money, but the character of the southend has been a source of contention. Or as one commenter put it, “Is he talking about the Stone Road Mall south end of Guelph, or the growing Guelphissauga Business District to the south?”

If you think this one small portion of the city is as bad as Mississauga, then I’m not sure you know Mississauga, but if we’re to be that pessimistic then we’d point out that Mississauga wasn’t built in a day. Nor was Cambridge, which has a lot of charm and character if you can get past the outer layer of big box stores as you enter down Highway #24. 

But find me a major city now that doesn’t have strip malls and plazas made up of the usual suspects offering the same thing you can get at a hundred other locations. Is this a bad thing? People like their creature comforts, and they like that a Dominos pizza is a Dominos pizza whether you’re in Guelph, Vancouver, or Timbuktu (assuming there is a Dominos in Timbuktu). 

If “shopping local” is important to you, then by all means seek out those local shops and businesses and support them with the base commerce of the money from your wallet. As someone that was standing on the bridge of a local business when it sank earlier this year, I know there was a lot of regret about that closure, but not a lot of interest in the several months beforehand when it would have made a difference. 

Now I’ve never been much of an economic theorist, but I’ve always wondered if government and enterprise aren’t a check and balance on each other. Government, and the regulations they pass, make sure the new burger shop can’t poison you by mishandling meat products, but should government stop Burger Chain A from opening in the south end and install a Mom and Pops Burger instead? Probably not. 

Like the mayor said, if free enterprise is to work, it’s at least got to be semi-free. 

On the other hand, our society prizes individuality, so why be like everyone else? I’m reminded of a line from the last episode of Buffy the Vampire Slayer, as noted sidekick Xander looked into the giant hole that was once Sunnydale and said, “All those shops, gone. The Gap, Starbucks, Toys 'R' Us . . . who will remember all those landmarks unless we tell the world of them?”

True, that was pure sarcasm, but you also have to respect the people that put all their chips on themselves. It’s a tough world out there, even if you’re traveling in the safety of a group, so why attack those with the gall and courage to chase their dreams? What difference does it make if its Fred’s Print Shop, or Fred’s Kinkos? Fred just wants to make it easier for you to do business printing, so what’s the big deal? 

Next week, I’ll talk about why I hate waiting in line at the grocery store… unless something better comes up.




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