… or how this is fundamentally different from an el-cheapo thrift store opening up in this severely under-served town.
You have my sympathy 
will result in them closing. It’s unlcear why they won’t either simply become smaller, but still viable, businesses, or why they won’t respond by offering more value than they did before.
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I am not saying that his argument is correct. Just under that scenario the wishes of the minority overcame the desires of the minority. To then say that the marjority have no cause for complaints would be wrong.
The argument as presented may have some merits. The decline of the high street is certainly more complicated than he makes out, and I am not sure that I agree that it is deleterious to the community. There is a growth of speciality shops to replace the traditonal high street retailers.
In the example, nobody was solely shopping at the supermarket until no other choice existed. Are we both in the same thread here?
Nope, the supermarket doesn’t offer the same good for lower prices; it offers goods for lower prices that are inferior in tangible, physical ways, but also in ways relating to the impact of their production. So why do people buy them? To start with, few do, but that’s enough to tip the balance and bring about a different state of equilibrium in which the original choices are no longer preserved.
But this makes no sense. The only point that makes sense is that the availability of a supermarket makes it much more likely that consumers will purchase all their goods there, rather than purchase some goods at the supermarket and some goods at the independent stores.
This is because people value convienience as well as price. Why make two trips when you can get the same goods in one trip? This is the only reason the article cites for people prefering to shop at a supermarket…once you’re there, you can get everthing, which means that instead of a trip to the butcher, a trip to the baker, a trip to the fishmonger, a trip to the fruit stand, a trip to the hardware store, a trip to the magazine shop, and a trip to the ice cream stand, you just buy everthing in the supermarket.
If people prefer low prices and convenience and indifferent service to high prices and inconvenience and good service (assuming that the mom and pops actually provide good service), how exactly is that a market failure?
The last bakery won’t close unless people never go there any more. People won’t stop going to the last bakery as long as they prefer to get their baked goods at the bakery compared to the supermarket. Independent bakeries exist all over the United States even though they have to compete against supermarkets. How do they stay in business? Because people buy their baked goods there. They don’t close just because they have competition.
This is such a ridiculous exaggeration of anything I’ve said, I’m not even sure where to begin, but let’s consider the tomato:
Supermarket chains want tomatoes in huge bulk, so that the product can be sold in the same way across many stores; this means that they must be grown on a massive, industrial scale; this in itself isn’t necessarily a bad thing, but it often can be.
They want tomatoes of uniform appearance, with tough skins and picked underripe to resist handling in store, knocks and bumps in transit halfway around the globe and the mechanical packing and processing that is made necessary by the scale of the operation.
So the customer ends up with a crunchy pale orange ball of insipid water; at the moment, the choice still exists in most places to go to some kind of small-scale greengrocer and get a tomato of a variety that is selected for flavour (rather than cosmetic appearance, or durability), that has been picked near to the peak of ripeness (because it requires minimal handling and shipping) and has been grown locally, contributing to the local economy, but that choice is slipping away from us.
I think I’ll probably have to concede that in reality, it might not even be the case that the the choice is shoehorned away from us without our consent or knowledge (although I still think it isn’t an impossible scenario - the reason the small stores fall over the edge is positively not because they don’t offer value for money to the consumer; they fall over the edge simply because they’re very close to it); in reality, the supermarkets are taking over largely because the consumers are too easily conditioned to accept (or even embrace) mediocrity.
But many areas have plenty of places to get great produce and other stuff as well. In Boston, there is a small chain of gourmet farmstand produce stores called Wilson farms. Then, there is Whole Foods that is growing like crazy all over the country. These are chains and yet their niche is very high quality produce, meat, bread and everything else. How does that fit in to your argument?
Then go to another place to buy your tomatoes. All I do is go to Kroeger, and they have very good, tasty tomatoes at the peak of freshness. But the farmer’s market around here has hardly been destroyed by the supermarket chains. It’s doing fine. In any case, the supermarket chains actually created a new opening in the market for fresh bread, high-class foreign foods, and so on.
These are available in specialty stores which stock high-end foodstuffs catering to the new demand - demand that might never have happened otherwise. I like Bourbon salmon fillets. Bu how could have known I’d like them if my supermarker hadn’t stocked ordinary salmon, or any fish at all? I like fish, but Knoxville isn’t anywhere near the coast, and there isn’t much variety to the local stuff. I haven’t lost anything at all.
Are some foods a little less fresh than they might be? Yes, but in exchange we’ve gained a vastly wider variety of foods all of acceptable quality, increased convenience, quicker shopping, and lower prices. People who want fresher foods can go to other markets. So what’s the big deal?
Take another look. Most of those new-fangled stores have been aound in some form or another for at least a century. And they tend to increase, not decrease, choice available to the consumer. Sure, I could go to a shoemaker like in the old days. But all he would make is one style of shoe and that’s what I get. Show stores have hundreds of styles and colors. If I want a really good shoe… I can go to an upscale store.
I hardly call a demand for cheaper shoes in the styles I want “conditioned to accept mediocrity.” I know what I want. I don’t need anyone else to tell me.
But more to the point, your scenario makes no sense. And everything else in your argument is based on that. At best, your scenario suggests that only one store - the least valuable - will go udner. The others may.
There’s not always a ‘somewhere else’ to go - there’s a threshold below which the smaller markets cannot continue to trade, but that doesn’t equate to ‘no demand’; there’s no guarantee that any given demand will actually be met.
But perhaps things are different where you live; supermarkets here in the UK are locked in a pattern of competition that focuses almost entirely on price - ‘we are cheaper than all the rest’, as opposed to ‘we are better’ - they’ve also seemingly persuaded their customers that price is the sole criteria by which judgments shall be made. A choice of buying very cheap, crappy tomatoes at Asda, versus slightly more expensive crappy tomatoes at Sainsburys, isn’t really a choice that offers me the options I want.
There’s one thing that the supermarkets provide that the small shops don’t: free nearby parking. This makes it vastly more convenient to shop at the supermarket.
How would any market you argue for guarantee that any given demand will be met?
My wife’s family is the largest importer and distributor of high end cheeses and some other specialty foods in the U.S. There business has literally grown 500% in 8 years and this was in an already established national market. High end specialty supermarkets are the fastest growing segment in the supermarket industry. There are literally dozens of regional and national chains like Whole Foods and Trader Joes.
In most markets, the availability of all high quality foods has never been higher. These are big chains and yet they bring unpresedented quality to the masses. These chains also literally create a market for high end foods too. Food appreciation in the U.S. has never been higher than it is today. This creates a demand for smaller shops that operate at an even higher level than the gourmet chains.T
Dunno; in measurable terms of quality, quite a lot of the produce on offer in UK supermarkets is grim and industrial and the trend seems to be that this is on the increase. It’s affordable, but bad.
The supermarkets have reacted to criticisms in this direction by throwing in a few new product lines, such as tomatoes ‘grown for flavour’ (what the hell are all the others grown for?) - offered at a premium price, most often with excessive packaging and in truth, still not really all that good.
To some extent, IMO, the issue is clouded by ambiguous terminology and vague hand-waving about what markets actually provide:
Exactly how much “value” does a business have to provide, of what sort, to how many people, in order not to go out of business? This is a non-trivial quantitative question whose answer is affected by a whole bunch of different factors.
The over-simplistic shorthand that many people use to describe the issue—i.e., “businesses will stay in business if they provide value” or “if they provide what people want”—conceals these complicated factors. It is not true that markets will provide anything that anybody wants, and the problem of how much market share you need to supply in order to get something you want is not necessarily a simple one.
This is more over-simplistic shorthand that conceals the real complexity of the problem. This kind of “market fundamentalism” assumes that whatever consumer choices “people” make (again, no details about how many people are choosing or how they make their choices) reflect the optimal outcome, because otherwise they would have chosen differently. If people complain about the outcomes, they must be crocodile-crying lying hypocrites, because if they really wanted a different outcome they would have made different choices.
This ignores the type of market failure known as “asymmetric information”. That’s when a seller has more information about the economics of the transaction than a buyer does. Specifically, shoppers may genuinely want a range of shopping options where they have both a MegaGrocer and small Main Street shops. But most of them will not have adequate information about the aggregate consumer choices of the population, and the quantitative economic effects they have on local businesses, so their consumer choices will not actually reflect accurately what they really want. By the time the average shopper realizes that a valued local store wasn’t getting enough trade to stay in business, it’s too late to do anything about it.
I agree that market capitalism works very well in many ways, in producing and distributing certain goods with maximum efficiency under certain conditions. But there are also a lot of situations where markets don’t provide the most-desired outcome to the majority of the consumers, and I think a case can be made that the OP’s hypothetical situation is one of them.
Market fundamentalists who deny the complexity of these problems generally have to fall back, as in the above quotes, on essentially calling dissatisfied consumers liars, hypocrites, stupid, or irrelevant. IMO this is not a graceful or constructive attitude to adopt on behalf of a system that purports to be all about efficiently satisfying the broadest possible range of human needs and desires.
A lot of the U.S. is not like this, especially on the coasts. I live in a somewhat rural area and have a range of supermarkets to shop within a 10 minute drive. Whole Foods has a pristine selection of whatever fresh foods you want, you just have to pay more. That would be the case with a specialty shop too though. Quality and selection has never been greater. This trend is rapidly spreading thorughout the country.
I think that we are seeing a difference between the continents here. Most towns in the U.S. don’t have a well-defined, walkable center and even if they did, it started dying a long time ago. There probably wasn’t a town baker or a fresh produce shop within living memory. The stores that got killed off tended to have pretty bland products themselves. They just couldn’t compete against effciency.
Supermarket quality two decades ago was often very bland and lackng. That has started to change. Maybe the same thing will happen in the UK.
Agh!
Agh!
Agh!
Agh!
Agh!
Okay, listen. When the supermarket moves in, 25% of the people stop shopping at the shoppes and start shopping at the supermarket. Your OP specifically states that. Do they do that because they were tortured? Is the market owner holding their family hostage? Are they completely without any brain cells, and remote-control driven? Because if none of those things is true, they must desire to shop at the supermarket. This is before the “last bakery” closes down, so no one is forced to.
Okay. Now, I have proven that 25% of the shopping populace wants to shop at the supermarket. (Again, because I’ve explained this five times and you can’t seem to wrap your mind around it: when there is an equal choice between the supermarket and the high street shoppes, 25% of the people choose the supermarket, which means they must prefer it to the high street shoppes).
Which means you cannot claim this was something “no one wanted”, because obviously at least 25% of the people wanted to go to the supermarket rather than the high street shoppes.
At best, this is something that “not a majority of the people wanted”, which is only true because we’re using made-up numbers supplied by you. If I countered and said, “Well, actually, 60% of the traffic would have to move to the supermarket for all of the bakeries to close”, then those high shoppes staying open would be lamentable as obviously only a minority wants them, right? But again, we’re dealing with pulled out of our asses numbers.
Cite? Proof? Anything?
How many? 25%? 50%?
If you’re going to argue “only a minority must move over for all of the bakeries to close” then bring some proof, not some numbers pulled out of your ass.
It isn’t oversimplistic at all. A census, or survey, is one of the least reliable methods of gaining information about behavior. People will omit the truth on purpose or inadvertantly and you also have to take into account how the question is framed. If you asked me how I felt about a small grocer going out of business because they can’t compete with Big-Mart I’d answer “that’s to bad” and mean it. What does that say about my shopping habits though?
I love the free market but I’m not one of those people who pretends it’s perfect. Sometimes needs or desires aren’t met. BET met the needs of a market a lot of people didn’t think existed for example.
I’m a human being and I can be genuinely sympathetic with someone who is losing his livlihood. It doesn’t make me hypocritical to shop at Big-Mart and still feel bad for the guy going under.
Marc
But that doesn’t necessarily mean that even those 25% of the people wanted the high street shoppes to close. They may have liked having a commercially active downtown with profits going back into local markets, for example, even if they didn’t go there for their own groceries.
See, this is the same problem of over-simplification that I was talking about earlier. We are assuming that people’s consumer choices reflect their real desires with respect to all outcomes of those choices. But this is not necessarily true, because consumers don’t have complete information about all the effects of their choices.
I’ll set up the argument more plainly, because I may not have been entirely clear in my previous post:
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The aggregate effects of individual consumer choices influence a lot of outcomes in complex ways. Consumers’ buying power doesn’t just determine what goods they get and how much they pay for them (which, according to standard market models, is all that consumers are supposed to be thinking about). It also influences which stores stay in business, local wage levels, local tax revenues, environmental health, “quality of life”, and a whole host of other things.
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The available information about the effects of consumer choices on many of those outcomes is inadequate. It’s easy to figure out, say, that you’ll pay $0.99/dozen for fresh grooblies if you buy them at MegaGrocer, and $1.29/dozen if you get your grooblies at Main Street Produce. (For one thing, MegaGrocer is splashing ads all over the media to make sure you get that information.) But it’s not so easy to figure out what impact your individual shopping choices are going to have on more complex outcomes, such as the viability of Main Street Grocer, taxbase and wage levels, local employment opportunities, pollution, etc. etc.
3.As a result of inadequate information, consumers often make choices that don’t accurately reflect what they really want. Most consumers (probably about 99.9999% of consumers, in fact) simply don’t have anywhere near sufficient information to figure out the total economic impact of their choices every time they want to go down to the store and buy some grooblies. So if they buy their grooblies at MegaGrocer, does that necessarily mean that they want Main Street Grocer to go out of business, or are indifferent to it? No, it doesn’t. Perhaps if they had complete information about the total impact of their choices, they’d choose differently. (In fact, there’s a lot of marketing research indicating that when consumers are given more information about, say, the environmental impacts of their purchases, they do tend to choose differently, voluntarily paying higher prices for more sustainable goods.)
4.As a result of such inaccurate choices, markets can produce outcomes that most, or even all, of the consumers did not expect and did not want. If people don’t know what the total effects of their consumer choices are, and thus inadvertently send inaccurate signals to the market about what they want, then naturally they’re sometimes going to end up with outcomes that they didn’t want.
Which is why it really chaps me to hear naive market advocates blithely assigning consumers the responsibility of having deliberately chosen every outcome of their choices, and implying that they must be hypocrites if they complain about any of the outcomes, or that their complaints are economically irrelevant. It’s a cheap shot and a cop-out. It ducks the issue of the genuine problem that markets fail to provide adequate information to consumers about the effects of their choices.
As an aside from the main debate, I don’t see the whole “megamarts are killing small business” scenario happening in Australia at all. Instead, supermarkets and small buisnesses seem to live symbiotically close to each other. At my local shopping strip, we have 2 large supermarkets, 3 bakeries (2 of them chains, 1 independant), 4 butchers (one chain, 3 independant), 2 fishmongers (1 chain, 1 independant), 1 chicken shop (chain I think), 2 green grocers (both independant), 2 news agents (not sure if they are chain), 1 deli (independant) and a whole bunch of miscellaneous stores. In every case, the supermarket is directly competing with the smaller stores but the small stores all seem to be thriving and doing brisk trade. Almost every supermarket has a similar range of smaller stores clustered around them. The rise of the supermarket has probably been a boon for small stores around here because they draw in traffic and give a greater awareness for food.
I don’t see at all how the supermarket is causing the death of the chain.
Nonsense, do you expect stores to remain open if they do not make a profit because you do not patronize them? Do you actually think a store can survive on you buying only a popsicle at the end of your daily walk? Here, the surviving Mom and Pop’s have remained by converting into quasi 7/11’s. They in turn usually close down when the couple retires - their children see no future there.
No, it absolutely fucking doesn’t. It says
It does not say that they stop shopping in the local ‘shoppes’. By all means argue with what I have actually said.