Ugly? Sprawl-inducing?  Low tax yield per acre? Yes, yes, and yes. But very adaptable in the face of hostile regulation.
Ugly? Sprawl-inducing? Low tax yield per acre? Yes, yes, and yes. But very adaptable.

by James A. Bacon

Lefty Smart Growthers loathe big box stores, none more so than Wal-Mart. The big boxes are ugly as sin, they (allegedly) oppress their workers, they perpetuate dysfunctional, auto-centric human settlement patterns and they drive small, independent merchants out of business. If only there were a way to legislate them out of business!

Two decades ago, urbanists in the United Kingdom, hoping to preserve “town center vitality” from the effect of big-box stores, decided to do something. They enacted planning guidelines in 1993 and 1996 that created significant restrictions on large stores (more than 1,000 square meters) not located in town centers. In one respect, the restrictions worked as planned — they led to a reduction in the opening of large retail stores. In other respect, they failed — they accelerated the demise of small, independent merchants. Another case of the law of unintended consequences.

Top-down social engineers are not always liberals and progressives; in the U.K. local Conservative Party officials also cracked down on big-box stores. Whatever their partisan affiliation, good-government zealots are often wrong but never in doubt. Rarely do they pause to measure results and see if what they’re doing is actually working. Fired up with noble intentions, they just plunge ahead with their next meddlesome scheme.

Fortunately, Rafaella Sadun, now on the faculty of the Harvard Business School, chose as part of her research dissertation to examine the consequences of the U.K. big-box regulations. Sadun tracked the number of U.K. planning grants and retail establishments in 303 local planning authorities between 1993 and 2004, before and after the regulations went into effect. Her conclusion in “Does Planning Regulation Protect Independent Retailers“: “Independent retailers were actually harmed by the creation of entry barriers against large shops.”

However did the good intentions boomerang? Well, it seems that the big retailers altered their behavior in a way that the goo-goos had not anticipated. “Instead of simply reducing the number of new large stores entering a market, entry regulations created the incentive for large retail chains to invest in smaller and more centrally located formats, which competed more directly with independents and accelerated their decline.”

Sadun’s statistical analysis suggests that planning deform accounted for between 4% and 22% of the increase in smaller-store formats opened by large chains and between 6% and 26% of the decline in employment by independent retailers.


Bacon’s bottom line: I’m no fan of big-box stores but I have a different philosophy. Rather than trying to regulate them out of existence, I would prefer simply to stop subsidizing them directly (through tax breaks and incentives) or indirectly (by supplying low-cost infrastructure). Create a level playing field, then butt out. Big retailers enjoy economies of scale in their supply chains, which drive down costs. Small merchants enjoy a closer relationship with their customers, and they tend to thrive in walkable, bikable settings where big-box formats don’t work. Meanwhile, new technologies are entering the marketplace that allow retailers to gather data on customer shopping patterns within their stores, deliver customized marketing pitches direct to shoppers’ smart phones, and create buzz through social media. There is absolutely no way to predict how this will all shake out, and it is certifiably insane for planners or the goo-goos who flog them forward to pick winners and losers.

The Smart Growth conservative’s position on big-box stores: stop subsidizing them, create a level playing field with small retailers and step aside. By all means, root for the little guy. But let the marketplace decide winners and losers.

(Hat tip: Emily Badger, Atlantic Cities blog.)

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29 responses to “Big Box, Big Bollox”

  1. I think the philosophy against big box is totally misguided and I would challenge those who say it’s auto centric because at one store, I can get food, clothes, prescriptions, tires, plants, hardware, furniture, electronics, dog food, etc.. I can bank.. get a haircut, get glasses, a money order, etc… even order online and have it delivered to the store to pick up!

    that’s ONE STOP rather than multiple stops … and I know few people who drive to downtown then walk from one store to another buying their everyday staples… and carrying them back to their car…

    and I doubt seriously that they get any special treatment… taxwise… and I doubt seriously that mom and pop give any better benefits to their employees..

    We’ve come full circle.. it used to be the “General Store” which had everything from hammers to figs to hard candy.

    WalMart is a modern logistics supply network – one of the most optimized in the world .. that can and does bring products from around the world – to thousands of Communities in the USA and they do it at a reasonable price.

    WalMarts are mostly incompatible with “downtowns” although they are testing out smaller footprint stores – about the size of the larger Family Dollar stores …

    Don’t mistake this as “love” for WalMart. I just admire an exceptionally run business that has created one of the most optimized logistics supply networks in the world… and in many communities the only real jobs for folks who have minimal skills…

    I shop there about twice a week…. and while I have my minor complaints..they really are minor and I’m just amazed at the array of products and services under one roof – for reasonable prices – prices that even those on the margins economically, can afford…

    we have to get off this “anti-big-box” kick.. it’s silly ..

  2. Les Schreiber Avatar
    Les Schreiber

    Another subsidy is the fact that wages are so low that many of the employees receive some form of public assistance. Capitalism has become a very strange system. In New York City , these types of businesses especially , Walmart,have been kept out by a coalition of unions and community groups.

  3. I went looking for the legendary Mom and Pop at their store once. The closest I ever got was some hired manager who actually met them once, just before they jetted off to their condo in Aruba. You won’t find the real Mom in a store window. She will be running a little restaurant at the county farmer’s market. The real Pop is easier to find. He’s the guy driving a Dodge Ram with a white utility trailer. You can catch him at exactly 6:01 am in the local Hardee’s parking lot. But talk fast…Time Is Money.

    Wanna freak people out? Tell them that you are indeed the owner, and operator of the business.

  4. Jim, what do good government advocates have against Wal-Mart (here in the U.S., not across the pond)?

    1. To quote my post: “The big boxes are ugly as sin, they (allegedly) oppress their workers, they perpetuate dysfunctional, auto-centric human settlement patterns and they drive small, independent merchants out of business.”

      By “good government” advocates, I mean the “goo-goos,” or social engineers, the people who think that government is the answer to every problem.

      1. I see where you’re coming from, but still I don’t think it’s fair to lump in goo-goos with leftist social engineers. There’s conservative goo-goos too, you know, and they often carry the flag against public sector corruption and wasteful spending. These folks are too wary of government to look for it to solve problems.

      2. Unions sold out the American private sector workers years ago, by pushing for their own growth through the unionization of government workers and the push for more expensive and bigger government. And they are angry because the private sector has generally found unions to be worthless. Wal-Mart, like most businesses, is not unionize. That means the unions cannot take money from private sector workers’ checks to fund the unions’ quest for bigger government and higher taxes. What goes around, comes around.

  5. WalMart is actually an example of a highly efficient world-class operation… a tour-de-force of American exceptionalism… and it’s logistic supply operation has been copied by everyone from Home Depot to Subway.. and even Amazon… and watch out.. Walmart is getting into this thing called “site-to-store” where they offer thousands of items online not carried in the store – and you place your order online and pick it up 2-3 days later at the local WalMart. One would have thought that – that would have been a natural expansion for Sears but for some reason.. WalMart just eclipsed them. The “catalog store” is about extinct.

  6. re: butt ugly commercial

    I don’t think WalMart has a lock on that …. at all.. it seems to be pretty endemic with commercial construction…

    in terms of competition – Dollar General and Family Dollar and similar, though having just as butt-ugly stores, often, undercut WalMart on a number of staples … Home Depot and Lowes, just about as ugly.. have similar employee pay and benefits… as do the other stores named below:

    CVS, Rite Aide, Walgreens, Food Lion, Costco, actually a wide variety of competitors .. most are national/regional, not mom/pop although some are franchise…with local owners.. and virtually all of them work off of similar logistics supply operations. Mom and Pop have become franchise owners and pay no more than WalMart.

    Virtually every name brand Restaurant from McDonalds, to Subway to Olive Garden to Cracker Barrel, to you name it… if there are more than one of them – chances are they are being re-supplied from a similar version of a logistics supply operation like WalMarts.

    it’s not WalMart that has destroyed Mom/Pop – it’s the advent of these powerful logistics supply networks.. that have far stronger buying power, located on rail lines (with an entire train set delivering), – as well as the ability to then stock their own distribution centers and truck fleets.

    the mom/pop stores would have a series of local trucks queuing up every day to re-stock them.. About the only thing like that you see now days is beer, soft drinks and snack food… virtually everything else comes on pallets on one truck, taken off with fork lifts and often delivered on the same pallet to the store aisles to be directly stocked… and the pallet was literally compiled 2-3 days before – from scanner data at the checkouts…

    it’s this that killed the mom/pops… not the big bad entity known as WalMart per se.

    There are still plenty of “local” stores and Restaurants around.. but now days when we travel… we have a known quantity in ..say Burger King.. and Charlie’s Paradise at Exit 20 near Podunk, SC is.. well. it’s a crap shoot.

    some are pretty darn good and some… are pretty awful.. and like Forest Gump’s box of chocolates, you just never know what’s in side until you bite down!

  7. Peter Galuszka Avatar
    Peter Galuszka

    The author makes some interesting points but screws it all up by refusing to come to terms with some fundamental contradictions in his philosophy.

    He goes to great lengths to bash “liberals” and “progressives” by claiming they see the government as the resolver and snipes at the fact that Wal-Mart does have a record for abusing its worker. “Goo-goo” is a curious term I haven’t heard for years. It comes from Chicago and is a snarky reference to local activists who may have lived near the lake in Lincoln Park who were trying to root out corruption and mob influence in municipal government. It means “Good Government” types.

    The irony is that the author is the biggest “goo-goo” of them all. He wants you to buy his nonsense that he is a “conservative” backing “smart growth” when, in fact, is is a progressive albeit a self-styled one. He wants change (he is a disciple of Risse) but wants to maintain what he thinks are his creds with his conservative friends which explains the constant liberal bashing.

    He will never be effective until he confronts the contradictions in his arguments and world views. Instead, he will be mired in a dishonest life.

  8. In response to John S and Peter, maybe I need to come up with a better term for left-wing social engineers than goo-goos. But it has to be snarky. Have any good ideas?

    As for contradictions in my world view, they aren’t contradictions. They only seem contradictory because they knit together thinking from camps that traditionally have been seen as hostile.

    1. DJRippert Avatar

      Re: Goo – goo’s …

      gim·crack (jĭm′krăk′)
      A cheap and showy object of little or no use; a gewgaw.

      However, Peter does have a point. Jim Bacon’s arguments are long on philosophy and short on feasibility. “User pays” is a great example. How much is it worth to a landowner to have a Metro Stop built with 0.25 mi for his or her land? 0.5 mi? 0.75mi? 1 mi? Only a massive government “future valuation department” could even attempt such an estimate. How can we charge individual drivers for the actual cost of their driving? Install GPS recorders in their cars and charge them not only based on the miles but based on what roads they actually use? OK – that requires not only GPS devices but a massive government apparatus to determine road depreciation costs, road improvement costs, allocation methods, enforcement methods for the GPS devices, etc.

      Jim’s ideas are often worthy but they are also contrary to small government. Thus, many of Jim’s ideas would require Goo – Goo thinking.

  9. I think you have the burden of putting a name to BOTH left and right wing social engineers!

    you know. vaginal probes, denial of the morning after pill, claims that any agency not specifically named in the Constitution is un-Constritutional, 30 years in prison for marijuana or sodomy, unlimited spending for the military, voter suppression, etc…

    what’s the Conservative equivalent of their predilections of “social engineering”?

    1. I don’t approve of conservative social engineering, although it’s beyond me how spending on the national defense can be construed as social engineering.

      1. Probably a stretch unless you consider the justification of the neocons to spend money showing other countries how to become “Democracies” like us. That’s not the purpose of National Defense.

  10. Peter Galuszka Avatar
    Peter Galuszka

    Brother Bacon, you see, is very clever. He’s a social engineer of the first order but disguises it by bashing liberals. It is his AGITPROP MO.

    When you challenge what he says, he then says he never said it.

  11. I believe in reverse social engineering — rolling back the social engineering imposed by liberals (and, in the case of suburban sprawl, by both liberals and conservatives).

    1. right. this coming from the guy who has advocated charging by the mile with a govt-device in the car…


  12. the strict problem is that the Constitution of the United States is, if nothing else, a recipe for social engineering – as are most Countries that have some form of governance.

    Public Roads and the use of Eminent Domain to provide roads, rails, pipelines, ports and airports is … social engineering…

    but it’s the kind that those who say they are opposed to social engineering – ignore and take for granted while they focus on the kinds of social engineering they are opposed to.

    The problem is if you say you are opposed to social engineering – where you try to plant your feet on that slippery slope towards anarchy.

    you want public roads but you want user pays. User pays via taxation, is social engineering.

    I hear no calls from the folks who are obsessed with social engineering to turn the roads over to the private sector to operate …

    you find out pretty quick in the Libertarian blogs that their “definition” varies quite conveniently according to the parts of government social engineering they like…

  13. DJRippert Avatar

    By the way, Jim – off the point: Congratulations to Richmond native and second year NFL quarterback Russell Wilson for leading the Seahawks to a Super Bowl victory. In 2012 the NFL Draft focused on Andrew Luck (#1 pick) and Robert Griffin III (#2 pick). Wilson was picked in the third round (#75 overall). Little did anybody know that an undersized (Wilson is 5’11”) quarterback from RVA would beat both of them to the Lombardi Trophy.

    Now, I know that Wilson isn’t a long dead Confederate general who helped lose an immoral war. And maybe it’s too early to start talking statues (I think you have to die first and Mr. Wilson is very much alive). However, I hope you and the other elites in Richmond will toss Russell a bit of a party when he is next in town. He is one heck of a football player and a generally good guy besides.

    1. When it comes to the Super Bowl, Richmond is Seattle East. This town is Russell Wilson crazy. We had a super bowl party at our house last night. There were zero Denver fans. Nobody really cared about Seattle, but we were all rooting for Russell.

      A statue in his honor? With Russellmania the way it is right now, it could happen.

      Not only is Wilson a fantastic quarterback, he is a superb human being, very generous and giving.

      1. DJRippert Avatar

        He is a good egg.

        We ought to see Taij Boyd (Hampton) – Clemson’s QB and Logan Thomas (Lynchburg) – Virginia Tech’s QB get some interest in this spring’s NFL draft. Meanwhile, Kevin Hogan (McLean) – Stanford’s QB should be in the 2015 draft.

        Little ole Virginia could have quite a few of its native sons taking snaps in the NFL in just a few years!

  14. Bullocks indeed – Contrary to the study of big box regs in the UK, WM has a long history of ‘forcing’ a variety of smaller retail stores (and some suppliers) out of business in the US. The reasons for this are indeed because of a vastly improved supply chain, but also because of some nefarious business practices that are well documented in many sources over the last 15 years or so…. just for starters.

    To begin with I would suspect that none of you has had the experience of negotiating with WM in their Bentonville offices, an ordeal that people I know have described as nothing short of extortion. Bottom line is they don’t they play fair – not even a pretense of a level playing field here. Then there is the fact that 80% of what they sell is manufactured in China, a topic for another thread, and a true Pandora’s Box…

    As far as the one-stop shopping argument, I can’t imagine wanting to buy everything I consume there – and don’t know anyone who does. In fact they are auto-centric because they normally build their stores on the fringes of new housing developments, then get subsidized directly or indirectly as JB wrote. Smaller retailers get no such incentives……And yes, given that they are mostly located in suburban locations, one could make the argument that they promote sprawl, but to be fair, so do a number of other retailers, but perhaps just not as much.

    And re ‘site to store’, this practice is not unique to WM, most other retailers I know have been doing this for quite a while – Bed & Bath, Best Buy, Target, Costco, JC Penney, Macy’s, etc. the list is fairly exhaustive.

    Finally, in spite of the supply chain phenomena which admittedly many other retailers have copied, WM has grown and has been able to offer so- called unbeatable prices because their cost of doing business was/is a lot less than other retailers: again, questionable and often unfair and unethical treatment of employees, incl. deliberately reducing benefits; frequent unethical methods of negotiation with US suppliers; the Chinese-made goods they sell have been produced by workers who are paid a tiny fraction of US workers. You know, the kind of everyday goods that wear out a lot sooner than they used to….

    Lots of other reasons to continue getting their goods from China – a country that endlessly pollutes, and is lax to enforce the few laws it does have; a seemingly endless supply of workers who migrate from village to cities and are often housed in dormitories. The cost of goods is indeed quite a bargain. Although it’s formula is admirable to many, the real cost of doing business with WM appears to be unconscionable, unethical, sometimes illegal and certainly unsustainable in the long run.

    1. DJRippert Avatar


      I was with you except for this:

      “Smaller retailers get no such incentives……”

      The suburbs of Washington DC, Richmond and everyplace else are lines with so-called strip malls which are chock-a-block with small retailers. They too locate in high growth suburban areas and they too get whatever subsidy comes from the road transportation infrastructure. No?

      1. exactly… we have what is called “neighborhood commercial” all over the place. They are usually a 7-11, a pizza place, a subway, a cleaners, a barber, etc.. and there are hundreds of them… and they ARE usually franchise and/or mom/pop…

    2. CNBC – admittedly a booster of business and 60 minutes both have had programs about WalMart’s “bargaining” practices but to be fair.. they’ve also had Costco.. and there are similarities – because in both cases – distribution through WalMart and Costco means 10x, 100x and more sales of the items.. than through other distribution channels. That’s genuine opportunity for other companies.

      so yes.. if you can sell 10x/100x and many, you might well be able to shave the cost and no one forces you to do it.. you can walk anytime and some do… and China… if you don’t like China, or Bangladesh or Haiti products.. don’t buy them. But the reality is that WM is chock-a-block with US brands.. it’s not WM ….. you’ll not find Chinese “brands” in a WM – just US brands…from Coca-Cola to B.F. Goodrich to Prell shampoo. this anti-WM blather is just that.. blather.

      auto-centric, one stop, sprawl etc.

      it’s a little looney in my view to pretend that most people do not have cars and cars that need tires, oil, filters, etc… just as we need toilet seats and bath towels nor that a huge number of WM are located INSIDE of urbanized beltways.

      you can’t buy EVERYTHING at a WalMart but I can easily count a half dozen or more separate errands that get combined and as I said prior.. I know of no one that “shops” downtown for 5, 10, 15 different places and walks around carrying the stuff … it just doesn’t happen much. the vast majority of people – even the WM haters use cars and visit more than just one downtown location – to get out and walk around and buy much of the ordinary staples they need.

      if you want to define “sprawl” as all those locations that are just inside and just outside of the urbanized beltways in the U.S. – then okay but again – many, many people who live inside of the beltways in densely-developed areas – also shop at WalMart.

      for a place like Washington/DC/Maryland , a good exercise would be to go to GOOGLE MAPS and key in “Walmarts near Washington DC) and look at that map. You’re going to see dozens of them.

      the anti-WM thing is … wrong-headed. McDonalds has killed far more mom/pop diners and local eateries than WalMart has ever killed and if McDonalds didn’t do it, Burger King, Hardees, Subway finished them off … And if WM ended up a steaming heap of dung.. as many wish.. you can bet the likes of Family Dollar and Dollar General would gladly take their place.. but Mom/Pop are not coming back.

      our world has changed.. we’re not going back.. we need to reconcile that and accept that change…

  15. Any new big box store would most certainly trigger an obligation to file a 527 TIA with VDOT. VDOT will comment, but it is up to the local jurisdiction considering rezoning to force the builder/developer to address the traffic impacts.

  16. DJR – A variety of subsidies both direct and indirect as mentioned earlier are indeed ‘incentives’ that include more than just transportation. Advantageous zoning changes that benefit WM exclusively are common, but an avoidance of local taxation is definitely an ’incentive’ that WM has been known to get away with on occasion in some localities across the US. WM employs a veritable army of lawyers who do their bidding in this quest. Again, these ‘incentives’ have been well documented in dozens of books over the years.

    larryg, I’m afraid your cynicism gets in the way of your arguments.

    Many ‘consumers’ just don’t like the way WM does business and put their money where their mouth is. It’s not just about mom&pop stores, or sprawl or any of the other dated arguments, although they’ve had their place. It’s because of all the well-known and documented bad practices of WM, that simply cause many to not want to shop there. Again, it’s way beyond an ugly storefront, sprawl, or mistreating their employees, and not providing adequate benefits, or allowing all kinds of security ‘issues’ to occur outside and inside their stores (if that weren’t enough), or their tacky atmosphere or any other number of legitimate criticisms.

    In fact, it’s possible and easy to get the very best deals for anything without going to WM, and having a better overall shopping experience at the same time. I know because I’ve been doing it all my adult life.

    There are those consumers who will continue to voice their opposition (with their wallets) and in other ways, when any business takes unfair advantage of the market in any way. Yes, the world has changed, and that includes corporations that are not just concerned that they might charge 3 cents less for those bananas you buy every week. For one, consumers eventually are figuring out that some corporations are socially responsible. Many make the SCR list routinely. If you observe closely however, it’s easy to differentiate the corporations who are actually doing some good, from those who are essentially greenwashing their efforts or whitewashing as the case may be. After all as has been said, there is a high cost to low prices….

  17. correction… Many make the CSR list…

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