Stacy Mitchell on Working to Ensure Independents Can Compete & Thrive

As senior researcher with the New Rules Project (a program of the Institute for Local Self-Reliance), a board member of the American Independent Business Alliance (AMIBA), and author of the book The Hometown Advantage: How to Defend Your Main Street Against Chain Stores and Why It Matters (Institute for Local Self-Reliance), Stacy Mitchell has become a leading advocate for independent businesses. Mitchell has traveled the country to educate citizens and policy makers on the economic and social importance of local businesses and to help level the playing field for independents and entrepreneurs.

Bookselling This Week recently had the opportunity to ask Mitchell about her work with local businesses and about why it's important for independents to defend their communities against retail sprawl.

BTW: Would you tell us about the Institute for Local Self Reliance (ILSR) and its goals and your work there? Also, what is the "New Rules Project"?

Stacy Mitchell: ILSR is a nonprofit research and educational organization working to foster communities that are more economically self-reliant, politically engaged, and environmentally sustainable.

One of our programs is the New Rules Project, which has as its mission "designing rules as if community matters." By rules we mean policies and regulations at all levels of government. Many public policies in place today undermine community. They encourage large-scale, pollution-intensive production, concentrated economic power, and race-to-the-bottom trade. We're working with policymakers and citizens groups across the country to implement new policies that value place and community.

The centerpiece of this effort is an online "clearinghouse" (www.newrules.org) of actual legislation, along with supporting research, which policymakers and citizens can download and introduce. Among the nearly 300 policies currently on the site, you'll find, for example, state and federal policies to foster more decentralized and sustainable energy production, as well as municipal and regional land use measures to curb the proliferation of large chains and strengthen locally owned businesses.

Much of my own work within the project is focused on local business. I provide advice and technical assistance to citizens groups and policymakers. I travel a fair amount to give presentations at conferences and community forums. I post research and how-to information on our Web site and put out a free monthly e-mail newsletter, The Hometown Advantage Bulletin, (www.newrules.org/retail), which tracks new research and innovative grassroots strategies culled from across the country.

BTW: It seems that developers and city officials from many towns around the country fall prey to the myth that a new development needs a chain to "anchor" it if it is to be economically viable for the community. You believe the opposite and say chains actually hurt the economy. Would you explain how?

SM: New chain store development generally reduces the number and quality of jobs available in your community. For years now, developers have been building far more retail than communities can actually support. When new chain stores -- especially the big boxes and category killers -- come in, they do not create new economic activity. All they do is drain sales from existing retailers. You can see this across the country, not only in disappearing small businesses, but also in the rising number of vacancies -- both in traditional business districts and increasingly, in malls and strip shopping centers as well. As these established businesses downsize and close, communities end up losing as many -- sometimes even more -- retail jobs as they gain at the new mega-retail development. This has been demonstrated in numerous studies.

Perhaps even more significant are the jobs indirectly supported by independent retailers. Local stores purchase many goods and services from other local businesses. They bank locally, hire local accountants, get their printing done locally, and so on. In contrast, much of the revenue taken in by a chain leaves the community immediately. So when chains come in and displace independent businesses, it actually reduces the volume of local economic activity and thus jobs. It also renders your local economy far more dependent on outside forces and the whims of distant decision-makers.

Two other points are worth noting. One is that communities that succumb to sprawling cookie-cutter development -- and everything that entails in terms of traffic congestion and loss of open space -- diminish their prospects of attracting and nurturing creative entrepreneurs and higher quality jobs. Communities should view vibrant independent business districts as assets that can help generate other kinds of economic activity.

Lastly, we're beginning to find that large-scale chain retail development often imposes higher costs on local government. This spread-out, auto-intensive pattern of development is expensive from a public services standpoint -- far more costly than our compact downtowns and neighborhood business districts. Some studies have found that big-box stores actually require more in services, like road maintenance and police, than they generate in tax revenue. We're also learning that the low wages paid by companies like Wal-Mart have a hidden cost. According to a study done this year, the average Wal-Mart worker in the U.S. relies on about $2,000 in housing, healthcare, and other public assistance to make ends meet.

BTW: Recently, Civic Economics released its latest economic analysis, the Andersonville Study, that illustrated that local retailers give back some 70 percent more to the economy than chains. From your travels and talks with local retailers, do you think these kind of economic studies are starting to catch the eye of some developers and/or town officials? Or, is this something that local retailers need to bring to their community's attention?

SM: It's critical that local retailers share this information with their planning commissioners and city councilors. Many elected officials are still operating under the mistaken belief that chain retail development is good for the local economy, that it's a net plus in terms of jobs and tax revenue. Hard data to the contrary makes all the difference. ILSR has posted summaries of many of the relevant economic studies on our Web site to make it easier for citizens and small business owners to assemble the information for their local officials, and we're working ourselves to broaden awareness of this research. We also advise cities and towns to adopt zoning measures that automatically require a comprehensive economic impact analysis for any proposed retail development of a significant size.

BTW: In your book, The Hometown Advantage: How to Defend Your Main Street Against Chain Stores and Why It Matters (Institute for Local Self-Reliance), what are some of the tips you offer to help retailers to "defend Main Street."

SM: When I give presentations to local governments and community groups, I suggest a four-pronged strategy.

First, we need to eliminate the public policy advantages that currently encourage and underwrite the growth of chains at the expense of independent businesses. In particular, we need to stop providing chain store developers with billions of dollars in subsidies (www.newrules.org/retail/veto.html), and we need to make our tax system fair in terms of both sales taxes (www.newrules.org/retail/inttax2.html) and state corporate income taxes (www.newrules.org/retail/corpincome.html).

Second, communities need to revise their land use policies to stop over-building, limit the size of stores, establish economic and community impact standards for retail development, and ensure that downtowns and other established business districts remain the primary centers of commercial activity.

Third, we need to channel our economic development resources into strengthening independent businesses and helping new entrepreneurs get started. Rather than always looking to bring in big corporations, cities should look to meet local needs locally, to grow their economies from the ground up. Tools include business incubator space, independent business investment zones, low-interest loan programs, technical assistance, and main street revitalization.

Finally, public education is key -- not only to encourage people to shop locally owned as a first option, but also to build support and momentum for public policy changes and new approaches to economic development. We're working to broaden awareness across the country, but at the local level, independent business alliances (IBAs) provide one of the best tools for building an effective educational campaign.

BTW: It does seem that it is important for local community retailers to band together, e.g. by forming an independent business alliance. And it seems that IBAs are becoming more and more popular.

SM: IBAs are doing impressive work. They're providing a voice for independent businesses in local affairs and a way to work together to tackle common challenges, and they're creating very lively, appealing, and effective public educational campaigns.

If you've been reading about IBAs in BTW and thinking about starting one in your own community, you'll be traveling a fairly well-laid path at this point. There are about a dozen established IBAs. And their national umbrella organization, the American Independent Business Alliance (www.amiba.net), provides technical assistance, an extensive how-to manual, templates for educational and marketing materials, and kits for participating in coordinated national events, like America Unchained and Independents Week.

There's strength in numbers and in the end, I think this kind of organizing and coordinated effort by local businesses will be instrumental in ensuring that our communities continue to be places where independents can compete and thrive. --Interview by David Grogan