February 25, 2005

Who Needs Mom And Pop?

Just a quick jump into the Wal-Mart fray. Kevin Drum thinks that the era of big box retailers is here to stay, and if that means that we no longer get the variety of a bunch of little "mom and pop" stores down the street, well, too bad. Max Sawicky isn't too happy with this state of affairs, but he still says, "In economics the trade-off between cost and uniformity on the one side, and variety on the other, is basic."

But does Wal-Mart kill variety? Most of the "mom and pop" stores I know just sell basic junk that isn't any more exciting than what you find in Wal-Mart (often it's less exciting). The interesting stores, meanwhile, don't really compete with Wal-Mart—stores selling antiques, or "local history" stuff, or prints, or offbeat clothing. When the dust settles, I would imagine Wal-Mart adds variety, by forcing its small competitors to specialize or die. Assuming, of course, that some specialize. Perhaps Wal-Mart even helps some of its small competitors by giving consumers more time and money to do "specialty" shopping. (Location might help too: people do their basic shopping at Wal-Mart, head out to the car, spot some other small store in the plaza that looks interesting, and pop in for a look.) On the other hand, you might see this effect more in cities than in suburban areas. There's also the internet to compensate for, say, the dingy used music place shutting down—though we'll certainly all miss the record store girl!

UPDATE: To be clear, obviously this isn't the biggest Wal-Mart issue around, but Nathan Newman, et. al. have already covered the (vastly) more important wage/unionization/workplace regulation angles. No disagreement there. Just thought I'd add another 1/2-cent point.
-- Brad Plumer 1:21 PM || ||