In Praise of Chain Stores, and Sweatshops

From the December issue of "The Atlantic" - an article by former NY Times business columnist, Virginia Postrel titled "In Praise of Chain Stores," here is an excerpt:

"Chains do more than bargain down prices from suppliers or divide fixed costs across a lot of units. They rapidly spread economic discovery—the scarce and costly knowledge of what retail concepts and operational innovations actually work. That knowledge can be gained only through the expensive and time-consuming process of trial and error. Expecting each town to independently invent every new business is a prescription for real monotony, at least for the locals.

Chains make a large range of choices available in more places. They increase local variety, even as they reduce the differences from place to place. People who mostly stay put get to have experiences once available only to frequent travelers, and this loss of exclusivity is one reason why frequent travelers are the ones who complain.

When Borders was a unique Ann Arbor institution, people in places like Chandler, Arizona—or, for that matter, Philadelphia and Los Angeles—didn’t have much in the way of bookstores. Back in 1986, when California Pizza Kitchen was an innovative local restaurant about to open its second location, food writers at the L.A. Daily News declared it “the kind of place every neighborhood should have.” So what’s wrong if the country has 158 neighborhood CPKs instead of one or two?"

MP: And remember, chain stores like Borders don't put small downtown merchants and bookstores out of business, "greedy" consumers shopping at chain stores for low prices put downtown merchants out of business. See my article on "consumer greed" here.

Last summer NY Times columnist John Tierney wrote an op-ed titled "In Praise of the Maligned Sweatshop."