Attack of the Chain Gang: Forget Wal-Mart, New York Is Chain-Ridden Already

The January 11th storm that wasn’t postponed some highly anticipated local political theater: The New York City Council’s Wal-Mart hearings.

Yes, that cheap plastic behemoth is trying to claw its way into New York again, aided by Mayor Bloomberg’s cheer-leading and direct mail propaganda campaign.

While I agree in principle with the “Stop Wal-Mart” crowd, why fixate on a   single entity when New York City is further drenched in chain stores every passing year. From coffee to clothing, video games to drug prescriptions, and sandwiches to mattresses- are we really still pretending a single Wal-Mart will make a difference?

Consider this particular Wal-Mart, which is aiming to open in East New York at the Gateway Center.   The Gateway Center is already home to BJs, Home Depot and Target.  The neighborhood is less than affluent, just down the road from JFK. The closest subway stop, New Lots (2,3,4,5) is six cross-town blocks away.

Look at this aerial photo of the Gateway site. Wal-Mart’s neighbors would all be national chains. It’s next to a highway. It will not be an open palm face-slap to Jane Jacobs if Wal-Mart winds up in this suburban styled outpost in East New York.

I have not heard how the Community Board in this neighborhood feels about Wal-Mart moving in, but their voice should be the one that matters most.

While it is true that Wal-Mart pays terrible wages, busts unions, makes cheap products in China and runs its business like a wrecking ball through small downtown districts (see  Public Advocate DeBlasio’s well-written, if not slightly conclusory report), there is nothing that the City Council can really do to stop it. As Mayor Bloomberg  has said, “This city does not have the legal right to prevent any business that can come here that complies with our laws. And if Wal-Mart wants to go into a place”¦ they have a right to do that.”

Not only can the City Council not stop Wal-Mart in the long run, but they  can’t even get Wal-Mart to show up for the hearings to get scolded. That’s why the February 3rd hearings will be political theater, at best.

The reason I’m so down on the “Stop Wal-Mart” show is that it distracts from the real issue, which is that chain stores are continuing to swarm communities in every borough at an alarming rate. The culprit is ever-escalating commercial rent from greedy landlords that don’t give a damn about recessions or neighborhoods. They kick out perfectly successful local institutions and replace them with chains that can take a temporary hit during a recession to expand their footprint in the marquee lights of New York.

This is no conspiracy; Dallas-based 7-Eleven is  very public about this:

“We are actively looking,” said Margaret Chabris, public relations director for 83-year-old 7-Eleven Inc., noting that New York is a key growth market. The company, which has several additional leases out for negotiation in Manhattan, is also moving onto college campuses and airports. It opened its first airport store at Newark Liberty International Airport last year.

By the end of 2012, 7-Eleven plans to have between 15 and 20 Manhattan locations, according to real estate sources. In the next five years, the company aims to operate 100 outposts here.

“There are more attractive locations available now than there were in the past, and this is due to the recession,” Ms. Chabris said. “A lot of small businesses are having a tough time growing, or some of them aren’t able to renew leases.”

Are you looking forward to 7-Eleven stores on every corner? There’s one on Amsterdam Avenue now, right by where I play in my Tuesday night basketball league. Its bright lights and ugly logo stand out from a distance, but they have great deals on Gatorade. While not every deli inspires romantics (I think one of mine is a crack dealership), they are a spunky New York institution.

If 7-Eleven wants to be a big-shot in the New York corporate chain store scene, however, it’s got a long way to go. The Center for an Urban Future put out this  compendious report documenting which chain stores are dominating the city landscape.

Number 1? Dunkin’ Donuts, with an astounding 466 locations throughout the five boroughs.   Next was Subway at 389, Starbucks at 256, and Duane Reade at 248.     Staggering figures.   In Manhattan, the balance of power shifts slightly: Starbucks 194, Subway 163, Duane Reade 161 and Dunkin’ Donuts 115.   Brooklyn and Manhattan led the way, with the overall number of chains increasing more than 5% from 2009 to 2010.   Queens was the borough least affected by chain expansion.

It may sound a little hippied out to bemoan chain stores like this. After all, their march into the consumer landscape seems inexorable, and in many cases, their product is equal to, if not better, than their small business rivals. The arguments against them are economic and cultural.

The economic argument is solid. While Wal-Mart will be sending its profits to Bentonville, for every $100 spent in locally-owned, independent stores,  $68 returns to the community through taxes, payroll and other expenditures. Locally owned franchises, of course, do reinvest in the community also. Chains often have very low wages, but so do a lot of small businesses. Some of my favorite locally owned businesses in the city pay awful wages and engage in shadier accounting than, say, a local Dunkin’ Donuts.

The stronger case again chain proliferation is its negative cultural impact. New York’s greatest draw, for both ambitious young people and international tourists, is its uniqueness. If you want to make it in finance, you do a turn at Wall Street.   If you want to see great theater, you need to check out Broadway. If you want to see what the hip music scene is like, start a band in Williamsburg. New York has museums, the fashion industry, multiple top universities, great sports franchises and so on.     There’s nothing like in the United States, nothing even close.

But take a stroll around Union Square, one of New York’s most cherished spaces, and you’ll be boxed in by Best Buy, TGI Fridays, Barnes and Noble, and other massive corporations that you can also find in your local airport terminal. The same could be said for not only the City’s hot tourist spots, but increasingly in residential neighborhoods as well. And it is in local neighborhoods where coffee shops, diners and book stores aren’t just “cooler” than chains, they hold the fabric of the community together.

As long as commercial rent remains such an albatross for enterprising people, what can be done to promote local, independently owned businesses? Mayor Bloomberg is fond of  PR stunts, which are a start. The  3/50 Project asks everyone to do their part by spending $50 a month in locally-owned, independent stores.  Empire State Development has some resources to help small businesses. The solution will have to involve legal, economic and financial creativity and commitment, but the end result will be worth it.

Below I’ve attached the flyer Wal-Mart is sending out to the community it hopes to move into. It flashes an image of Fifth Avenue, suggesting that rich elites are trying to prevent poor people from having shopping choices like they do.   The funny part is that whether or not Wal-Mart gets its way, the rich, poor and middle-class are all getting closer to a New York City without plenty of choices when it comes to shopping.