My Turn: Big box stores can hurt small towns

Posted: Tuesday, July 01, 2003

Home Depot has announced it is not coming to Juneau any time soon. While this is good news for Don Abel Building Supply and Valley Lumber, what may not be so obvious is the importance to other Juneau retailers and the community at large.

Most people have not considered the complete roster of local businesses that face elimination or downsizing if Home Depot opens a store here. Good Hardware and Western Auto are obvious, but Landscape Alaska and Glacier Gardens are also vulnerable because Home Depot is one of the nation's largest lawn and garden suppliers. They also stock plumbing, hot tubs, paint, tools and electrical supplies. Lyle's, Northstar Hot Tubs, Cameron's Plumbing, Jacks Plumbing, Harri's Plumbing, The Heating Company and Delta Electric would be severely impacted by the big box retailer. Valley Paint, AIH, Carpet Source, Paul's Floor Covering, Arctic Carpet, Carpet Alaska all sell the same materials as Home Depot. And there is the secondary impact on banks, auto dealerships, charities, high school sports, softball teams, sign makers and others. Let's face it: 32,000 people cannot support these local businesses and a Home Depot. Remember, it's the local businesses that support the community.

Consider the history of national chains in Juneau. Sears, JC Penney, Lamont's, Pay-n-Save, Payless, Sizzler, Shakey's Pizza, Kentucky Fried Chicken, Pizza Hut, Wendy's, Burger King, Baskin Robbins and most recently Kmart have come and gone. Would Home Depot be any different?

Have you ever wondered why Spenard Building Supply does not have a store in Juneau? Spenard is the largest building materials chain in the state and part of the sixth largest building materials retail group in the nation. With sales in excess of $1.4 billion last year, Spenard has the financial muscle to build and maintain a store in our community. Despite financial ability and thorough local knowledge they have chosen not to move to here because Juneau enjoys the lowest-cost building materials of any community in the state and the market is well served by two strong local competitors as well as a host of specialty retailers. Spenard management understands the market cannot support another building products retailer.

However, there is a more problematic angle to consider: the impact and risk to the CBJ. A move by Home Depot into Juneau would put CBJ tax revenues at risk. If Home Depot opens here, it is reasonable to expect many small businesses in the building materials sector to fail, shrinking the tax base. But, let's assume revenues to the city remain neutral.

By consolidating the majority of tax receipts with one business, creating a virtual monopoly in the local building materials sector, a simple decision by the Atlanta headquarters to close the Juneau store would create an instant revenue crisis at City Hall.

Home Depot created a small-town format called Cross Roads a few years ago to compete in communities the size of Juneau. The plan called for opening multiple stores over two years. After opening fewer than a dozen stores, they shut down the division, fired the employees and closed the stores, leaving the communities with vacant buildings and a devastated building materials sector. We should all be asking who has the community's interests at heart.

Do city staff, the planning commission and Assembly understand the obvious? Most big-box retailers do not create new jobs, but simply replace jobs that already exist at local businesses. This is economic displacement, not economic development. In reality Home Depot would bring nothing new to Juneau, replacing full-time jobs with part-time jobs and transferring profits to Atlanta. The same can be said for Wal-Mart, Target, Kmart, Lowes and a host of others.

While I admit I have a vested interest in this community debate, there are much larger issues for all of us to consider. Sometimes bigger isn't better. At the very least, any multi-national retailer should have to undergo the same scrutiny we require of the mining companies before operating inside our community. Economic impact studies and a thorough review process should apply equally to Coeur-Alaska and Home Depot or Wal-Mart. After all, the effects of a mass merchant to average hourly wage can be harmful and have a far larger negative effect on the economic stability of the community.

Anyone who has walked through the mall in Ketchikan since Wal-Mart opened there understands the devastating impact a big box can have on a small town. Is that what we want for Juneau?

Bruce Abel is president of Don Abel Building Supply and the Western Building Material Dealers.

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