By David Lennam
There’s a whippet-thin woman of accumulated years defying physics as she leans into a shopping cart containing what looks like all her worldly possessions. Steps back is a young mother, two kids in tow and another on the way. She, too, manages a buggy piled high with food, clothing, electronics, and even small furniture. A middle-aged couple, head to toe in spandex cycling gear, brings up the rear of this small procession. Same story. Stuff… lots of stuff.
Picture them all in grainy black and white and, like some vintage newsreel, you’ve got a city of refugees fleeing some advancing army, or sharecropper “Okies” migrating to California during the Dust Bowl. Where is Tom Joad?
This, however, is no scene of disaster or depression, but rather one of consumer revelation. Just another day at Costco and another parade of shoppers rolling through the door, carts laden with purchases.
You can almost hear the “ka-ching” of the cash register as each rumbles into the parking lot to unpack and repack and move to the next big box store to repeat the ritual.
These shoppers are regular worshippers making weekly pilgrimages to their mecca of price and selection, slavishly offering tithes to their god in exchange for a redemption of sorts — on price.
So it plays out in Langford, where a highway interchange is an indelible X marking the spot for big — as in big values, big choice, and big traffic gridlock. This is big box land where stores the size of airplane hangars tally jumbo jet-sized sales at the rate of a casino. Figure that the Langford Costco rings maybe $130 million through its cash registers every year and you’ve got the metrics on big boxes. Think big. Big boxes are typically 50,000 square feet and up, vast warehouses specializing in bulk goods that often tend to look just like large boxes: freestanding, flat roofed, cavernous single-floor structures. They tend to eschew flashy floor displays and personalized service for a help yourself model that keeps expenses (and, it follows, prices) low.
Cheap-to-buy goods mean high-volume sales and massive purchasing. Any store that can put 80,000 different items on its shelves (which is the average store inventory for a Wal-Mart) has big-league money behind it.
The figures are daunting to the owners of small, independent stores. That’s why big boxes that specialize in goods within a specific range (hardware or electronics, for example) carry the moniker “category killers.”
If you’re an independent retailer and you’re in one of those categories, you’re dead.
BIG BOXES TAKE ON THE INDIES
When the big boxes started popping up in Langford in the late ‘90s with the opening of the Real Canadian Superstore, followed by Costco and Home Depot, you could feel the trembling from shop owners running their mom and pop business the old-fashioned way — dealing with customers like they were friends. They feared those “friends” would vanish forever as they stampeded like lemmings to the mega-marts.
And they weren’t far off the mark. The lemmings did run… headlong into the gaping maw of the retail behemoths, but they eventually came back and they brought new customers with them.
Asked if he remembers when things changed, Michael Hanson doesn’t hesitate.
“Oct. 27, 1999. That’s when Home Depot opened and I went home thinking, ‘What am I doing here?’ ”
The owner of Langford’s Windsor Plywood store knew what was coming — an exodus. He’d spoken to colleagues in other cities where the same song had been sung. They told him that in the first couple of months his customers were all going to go to the big boxes to check them out. But they’d slowly start to drift back… one day.
“Well, for the first three months after [Home Depot] opened, the retail traffic here was down 40 per cent. I was scared of them and I didn’t hide the fact,” Hanson confesses.
His competition was like 25 Windsor Plywoods under one roof, 130,000 square feet to his 6,000. But Hanson was part of a 65-store chain of franchises with big box-style buying power. His only problem was getting that across to customers certain that better value lay under a larger roof.
When RONA opened its behemoth store a year ago last summer, Hanson recalls a visit from three Home Depot managers who were bemoaning the arrival of their rival.
“One of them said to me, ‘You have more staff in your shoebox than we have in our store and let’s hope you can never get that across to the consumer.’”
Word got out. Hanson’s clientele returned to where they knew they’d get the best service.
“We try to do what we do right and try not to do what we can’t do right,” the 54-year-old says with a grin, adding slyly, “Does that make any sense?”
Ironically, Hanson’s experience has been that the big boxes have brought him business, just by the sheer volume of shoppers blazing a trail down the Trans-Canada.
“I have more clients from Oak Bay and Victoria than I’ve ever had,” he beams.
The Cloth Castle in downtown Langford is as close to a “mom and pop” outfit as you can get. Three generations of the same family arrive for work at the sewing and fabric store every day — as they have for 39 years. The thundering steps of the big box Goliaths like Michaels didn’t frighten owner Sylvia Ratcliffe. She knew the biblical David used ingenuity and cunning to fell the giant.
“When the big boxes came in, we had staff meetings every morning about service,” recalls the 71-year-old Ratcliffe. “We know our business and we will earn [the customer’s] business. Big box stores don’t know about the needles and the threads. We train our staff in how to use those products properly.”
Ratcliffe’s son-in-law Barry Benischek, who also works at The Cloth Castle, says he’s regularly approached by customers who tell him they won’t shop at a big box because they can’t find any knowledgeable staff.
“You can’t compete against [big boxes] on price,” says Benischek, “but you can pick up on their weaknesses. One weakness, truly, is there is no customer service.”
Butting up against Michaels, Costco, Real Canadian Superstore, and, of course, Wal-Mart and trying to go price-tag to price-tag on a high-end item like a sewing machine is next to impossible unless you’re there to back up that sale, says Ratcliffe.
“Someone called today and said, ‘I bought a sewing machine [at a big box store] and it doesn’t work and I can’t get someone there to fix it.’”
For Benischek that’s the clincher. Customers aren’t shopping at The Cloth Castle to save a buck, they’re shopping there for the wisdom, experience, and one-on-one service.
Like Hanson, Ratcliffe has noticed an increase in customer traffic to her front door because of the big boxes. As more shoppers scurry out to Langford, they tend to detour to some of the locally owned independents.
Angela Pollock, president of the West Shore Chamber of Commerce, said the area’s small business community is growing, not floundering and suggests there’s room for both the big boxes and the little guys.
“I’ve never heard ‘The big box stores have put me out of business’ from Chamber of Commerce members, when businesses close or move,” she says.
The big box phenomenon has not been exclusive to Langford. Retail giants like Staples, Future Shop, Winners, Chapters, Toys “R” Us, and of course, Wal-Mart, thrive in Victoria and Saanich, as does a Home Depot in the University Heights Shopping Centre. Sitting a couple of blocks north is General Paint, tiny by Home Depot standards, but absolutely bustling on a Saturday afternoon.
Folks who shop here say they’ve never seen it so busy — this despite the competition from the world’s largest home improvement retailer with revenues last year of nearly $91 billion.
“We’ll be expanding [the Shelbourne store]. Ther
e’s no question it’s doing well,” comments General Paint’s marketing manager David Stubbs on the phone from Vancouver.
“Home Depots and RONAs operate in markets we’ve been in for years. They do have an impact initially, but we find that our customers are loyal to us.”
BEATING THE BIG BOXES
There have not been widespread closures of local businesses since the big boxes showed up, verifies Dr. Mark Colgate of the University of Victoria’s faculty of business. He poses the question about whether any business that did go belly up might have done so regardless of any big box competition.
“The people who are most vociferous about the big box stores are the local retailers who probably aren’t doing a good job of running their stores and they may have gone out of business anyway,” is his take.
Research shows that having a Wal-Mart move into the neighbourhood doesn’t mean all the small stores will shut, says Chris Duff, a professor in the faculty of management at Royal Roads University. While price and selection drive the consumer to big boxes, shoppers, he says, look for more than that in their experience. Factors like ambience and service are paramount and these are what the big boxes offer less of.
Although, he cautions, beware. Shopper loyalty can end with one look at the price tag or one foiled attempt at trying to find parking.
“Location, location, location,” stresses Colgate. “Everything revolves around where you are. If you’re not convenient, people won’t shop there.”
Duff says small business owners have to do what the big boxes aren’t doing.
“If you’re in low-priced clothing and Wal-Mart opens around the corner, it’s likely you’ll be pretty short lived… The little guys have got to find their niche and offer something the big guys can’t offer.”
Colgate believes small stores offering a good value proposition, shouldered by customer service and perhaps longevity, will survive, although a drop in revenues is inevitable.
“The problem is, if people don’t think they’re getting value for money and a big box store opens up next door to you, you’re in trouble.”
Though there has been scant research on the impact of big box stores in Canada, one study of the Toronto market showed that general merchandisers and sellers of cheap clothes went out of business upon the arrival of the big boxes, but were soon replaced by other businesses that filled a different need.
One huge advantage the big box stores have is advanced computer technology to track sales. Buy a box of Tide in Wal-Mart and the store automatically knows that you bought it and the data is sent back to (Tide manufacturer) Proctor and Gamble. That tracking allows Wal-Mart to put the onus on the supplier to put the Tide on their shelves.
“They’ve got the technology to move a helluva lot of goods all over the market place,” says Duff.
A VISIONARY AND HIS SHANGRI-LA
Sheri Martin has lived in Langford since 1984 and four years ago opened the Teas N Beans Café in the city’s downtown — on the ground floor of municipal hall. She’s seen the way the arrival of the big boxes have knocked over the first falling domino of change.
“Langford’s always sort of been, well… Langford. It was a place you just didn’t go to,” she says with the kind of world-weary sigh those in the Western Communities practiced for years — always the bastard cousin of shiny, bright Victoria. “But now a lot of people are moving here from town, selling their places in Oak Bay and James Bay and moving to Langford. It’s inspired people to look at Langford in a different light and take us more seriously.”
Dogpatch, Hicksville, White Trashford.
Langford has endured endless slurs as the trailer park of Victoria. But it seems the last laugh is becoming theirs thanks in chief part to a man many hail as a visionary.
Elected mayor a year after Langford incorporated in 1992 — and unopposed in the last four elections — Stew Young is, if nothing else, sincere in his convictions.
“It was Langford’s only option,” the 46-year-old says of the big boxes. “It wasn’t rocket science. I said, ‘Let’s not drag on this; let’s get on it.”
While other municipalities dawdled over whether or not to open the door to big boxes, Young called them up. He knew Langford needed an economic generator and a way to build a city without taxing residents into submission. He was also looking for some magic to wipe out the town’s 25-per-cent unemployment.
“I did my homework. There were 25,000 people with Costco memberships on the South Island and they all drove to [Costco in] Nanaimo. If they visited twice a week, that’s 50,000 visits. I knew we could double that and get 100,000 people through here.”
They began to come in droves. Other big boxes opened and, soon, Young had the cash to change the landscape.
Unpaved streets, open ditches, junkyards, and no sidewalks have been replaced with flowerbeds, public art, character streetlamps, 58 new hectares of parkland, affordable housing, and even the reconstitution of Millstream Creek.
Statistics bear out Langford’s ascent. In 1992, Langford’s population was 18,000. Today it’s 23,500. In 1993, there were 5,593 properties on the assessment roll. Today, there are 9,120. In 1993, the value of all properties totaled $904 million. Today, it’s $3.9 billion.
Construction is underway on a 91-unit condo/commercial structure near downtown Langford. More — many more — are on the way: eight biggies including a cloud-touching 45-storey edifice on Bear Mountain (part of a $1.9 billion multi-tower residential development).
Young’s touch has been like Midas.
“In 1992, Langford was virtually broke. We had no extra money. The first year [after we got in], we reduced Langford’s taxes by 10 per cent to residential homeowners.”
Keith Norbury was editor of the Goldstream Gazette when the big boxes first set up shop. He was there covering the big public hearing for Costco and his account was that the Langford community’s general consensus was “yes, yes, yes.”
“There was a certain segment of the business community really vocally opposed to it. They thought it would ruin their businesses, but, you know, since the big boxes arrived a lot of new businesses have sprung up.”
And a wealth of other development. Consider the impact of Bear Mountain leading all housing and tourism initiatives. Young is adamant that Bear Mountain wouldn’t have moved in if the big boxes hadn’t cleared a path. Bentall Capital just pumped $30 million into renovating the CanWest Mall (now the West Shore Town Centre) and a new Sheraton hotel is going in behind Costco.
“The whole mindset [about the big boxes] has changed,” adds Young. “They’re accepted. And now we have more small stores thanks to the big boxes. Protectionism never works.”
Young, vibrant, even beautiful. Who’s laughing now? One time the butt of radio morning man Ed Bain’s jokes, Langford is indeed the envy of its neighbouring municipalities, having gone from the best punch line to the best bottom line.
According to Duff, Langford is the envy of the region — a region filled with mayors and councils who shunned the big boxes.
“I suspect a lot of people in other municipalities are saying, ‘we made a mistake here. All the dollars are being carried off by Langford.’”
SHOP TALK
Therese Eley tends to avoid the big boxes — not out of some ethical guilt, but rather because she finds the experience overwhelming.
“I tried it yesterday. I had to force myself to go through all the racks of things. It’s just not enjoyable. I like to shop, but I’m typically very focused. I like to walk into a store, scan, and be in and out in under 10 minutes.”
A twenty-something single living in Victoria, Eley isn’t the target demographic that will buy in bulk an
d buy often.
Bob Bell’s profile might better fit the big box poster boy image.
Mid-40s, homeowner, two kids. The Bell family are Costco and Home Depot regulars.
“We do tons of shopping there. We’re in there once every three weeks. On an average trip, we spend $250. It’s just convenience and it’s cheaper.”
Bell is intrigued by the clever psychology of the big boxes, particularly they way they present items — so many of them — making it almost irresistible to impulse buy.
“You go in there and you’ve got a selection of everything from food to clothing to electronics. I try not to browse because I end up buying something. It’s hard not to do because their marketing is so good.”
Mark Gowans shares the opinion that if you go into a big box specifically to buy one item, you will invariably emerge with 20 more.
“I’ll go in to buy those cordon bleu chicken things which I really like, but I’ll see men’s socks — are they cheap or what? Then you go, there’s underwear and that’s really cheap.”
Gowans’ co-worker, Leslie Manning, regularly makes the trip from her Oak Bay home to Langford. Price, she says, is the number one reason to big box it, but so is the “no questions” return policy.
“One of the other reasons I will pick up something at Costco or Wal-Mart is that if I have any problems with it I can take it back, no questions asked. If you go to a smaller store, they often won’t take it back or they want to give you credit.”
While stores like Home Depot and RONA pride themselves on the knowledge of their staff, the big boxes tend to offer acres of value over individual attention.
“I go into [big box stores] not expecting great service. I really don’t want someone coming up to me and asking if I need help,” says Bob Day, who drives with his wife from Mill Bay to the big box enclave. “So why do I choose them? I’m going in and browsing and getting all the things I need at one stop and getting to the cash and getting out.”
“Time is money,” asserts Bell. “If I can go to a place and get everything all at once that’s where I’ll go.”
IT’S NOT ALL GOOD NEWS
There are naysayers, more than just a few of them. Big box stores (Wal-Mart chief amongst them) have angered consumers through a gaggle of unsavoury business practices and the perceived threat of the homogenization of retail.
Through their massive buying power, big boxes influence the way producers make, package, and ship their products —not always for the common good.
In her 2006 book, Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses, Stacy Mitchell argues that big boxes are responsible for fueling myriad problems from the shrinking middle class, to rising pollution, diminished civic engagement, and even the loss of farmland.
Mitchell cites dozens of instances where citizens groups have convinced local government to keep big boxes out of their communities by adopting measures such as store size cap laws.
The author points out that a core part of the grassroots strategy involves getting people to see themselves not just as consumers, but as workers, producers, business owners, citizens, and stewards of their community.
That’s the scenario playing out in Parksville and Qualicum Beach. The resort towns have denied big box, and even baby big box stores like London Drugs. At the same time, other small centres such as Ladysmith and Port Alberni are embracing the big box invasion. It’s shoppers that are making the final decision with every dollar handed over.
The same fear-driven animosity towards big box stores played out 80 years ago when the first chain stores started to flex their muscle and erase independents from the map. During the 1920s, as the number of chain stores (Woolworth, A&P) climbed from 30,000 to 150,000, capturing 22 per cent of all retail sales in the U.S., more than 400 opposition groups sprang up in America led by unions, farmers, wholesalers, and local business owners.
Professor Duff draws an analogy with the way groceries have been sold here. The Greater Victoria of 17 years ago was home to dozens of tiny corner stores that sold food (along with a bit of everything else), he points out. But as Thrifty Foods, Safeway, Save-On, and Fairways expanded, those small operations were squeezed out. Is that any different than the arrival of chain stores or big boxes?
One barrel of criticism aimed at the big boxes carries a bullet meant for those who do nothing but drain a community of its wealth and its soul. Most are foreign owned and the pipeline funnels money south. Decisions affecting locals are routinely made in towns named Vinings, Bentonville, and Issaquah (headquarters for Home Depot, Wal-Mart, and Costco respectively).
But the big boxes have deftly dodged the shot. Not only are they heavily involved in the community, they literally ARE the community: top employers, top taxpayers, sponsors of kids groups, ball teams, and golf tournaments — in essence, good corporate citizens.
“We have lots of ongoing projects all year long,” confirms Kevin Hale, store manager of Home Depot’s Langford location, citing recent projects outside of Langford such as their construction of a
Saanich home with Habitat for Humanity, as well as renovation work for the petting zoo in Beacon Hill Park.
Chamber president Pollock indicates that the retail giants come bearing gifts, listing off charitable donations by the likes of RONA and Home Depot.
“They’re not just sitting back and saying ‘We are the big box store and we don’t need to be part of your community.’”
RONA Langford manager Garet Andrews has heard nothing negative since his store opened in the summer of 2006.
“The positive comments were coming from people who were saying ‘It’s nice to have competition to other big box stores’ and ‘Thank god you’re in the Langford area, now we don’t have to go further to get our shopping done.’”
Costco spokesman Ron Damiani says the wholesale club giant is a community good guy minus the fanfare and expectation of recognition from the many local groups and charities it works with.
“We contribute because it is quite simply the right thing to do,” he remarks, even suggesting Costco is viewed as an ally by its small business neighbours.
HERE TO STAY, BUT HERE TO CHANGE
Responding to changing trends and, more importantly, to the way their competitors are doing business, the big boxes aren’t standing pat. Real Canadian Superstores is thinking of revamping its 97 stores across Canada with a new name (Loblaw Superstore), a new design, and a new mandate to step out of the cold shadow of the global titan Wal-Mart. Wal-Mart itself will overhaul its Town and Country shopping centre store into a superstore in an effort to go head-to-head with grocers like Thrifty Foods (now part of the Nova Scotia-based Sobeys chain) and Safeway.
Victoria’s Economic Development Commissioner Ken Stratford explains that all this growth means expanding the labour pool and that’s proving difficult in a market where every store hangs a “Help Wanted” sign.
“In this situation, we have big box stores finding it increasingly hard to get personnel. You are going to see them moving more and more to automated checkouts and automated product information.
They’re going to have to do that in order to survive.”
Hale and Andrews agree with Stratford’s assessment.
“It’s very difficult to get staff. There are lots of jobs out there, lots of options,” says Andrews, while Hale adds that a new order of employees — retired tradesmen — are starting to fill the ranks once occupied by young workers.
A glut of jobs, muses Stratford, might even benefit independent stores.
“As labour becomes harder to get, and it will get even harder, believe me, the independents come into their own more. As few
er people are working in big boxes, it will be harder for them to provide personal service and there might be a bounce back to independents.”
Will it all come full circle? That depends where you choose to do your shopping.
Professor Duff sums it up neatly.
“If you want to live in a society like ours… having a big box is part of the price you and I pay to get all that.”
HOW BIG IS BIG?
Costco
Largest membership warehouse club chain in the world
Headquarters: Issaquah (near Seattle)
No. of stores worldwide: 513
No. of stores in Canada: 71
No. of employees worldwide: over 140,000
No. of employees in Canada: 15,000
Sales (2006): $63 billion (U.S.)
Size of Langford store (sq. ft.) 135,000
No. of employees at Langford store: 260
No. of items in stock: between 3,500 and 4,000
Trivia: Costco spends no money on advertising
Home Depot
World’s largest home improvement retailer
Headquarters: Vinings (near Atlanta)
No. of stores worldwide: more than 2,206
No. of employees worldwide: 364,000
No. of stores in Canada: 159
No. of employees in Canada: 30,000
Revenues (2006): $90.8 billion (U.S.)
Size of Langford store (sq. ft.): 113,000
No. of employees at Langford store: about 200
No. of items in stock: over 40,000
Trivia: Home Depot has its own museum
Real Canadian Superstore
Formerly SuperValu and part of the Loblaw grocery chain (Canada’s largest food distributor) — owned by George Weston Ltd.
Headquarters: Brampton, Ontario
No. of stores: 97 Superstores (Loblaw operates 1,528 corporate, franchised, and associated stores)
No. of employees: 139,000 (Loblaw total)
Revenues (2006): $28.6 (Loblaw total)
Trivia: Maple Leaf Gardens, former home of the Toronto Maple Leafs, is being converted into a Real Canadian Superstore
RONA
Largest Canadian distributor and retailer of hardware, home renovation, and gardening products
Headquarters: Boucherville, Quebec
No. of stores: 671 corporate, franchised, and affiliated
No. of employees: over 26,000
Revenues (2006): over $6 billion
Size of Langford store (sq. ft.): 150,000
Number of employees at Langford store: 180
No. of items in stock 34,000
Trivia: Rona acquired the Revelstoke and Revy brands in 2001
Wal-Mart
World’s largest retailer
Headquarters: Bentonville, Arkansas
No. of stores worldwide: 7,032
No. of employees worldwide: 2.2 million
No. of stores in Canada: 278
No. of employees in Canada: 70,000
Revenues (2006): $351.1 billion (U.S.)
No. of items in stock: 80,000
Trivia: Wal-Mart is the largest private employer in the world and the world’s fourth largest utility or commercial employer, only trailing the People’s Liberation Army of China, the National Health Service of the United Kingdom, and the Indian Railways
* Note: All figures current to August 2007
