Did local shops give up too easily?

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Conventional wisdom says that when a big corporate superstore moves into town, locally owned shops can't survive the competition. Now that one of those superstores, Borders bookstore, is shutting down, I've been reflecting on this common assumption. Maybe the Big Boys aren't as invincible as many believe, and I can't help but wonder if local shops sometimes give up too easily.

Carmel's iconic Thunderbird, which was the Peninsula's largest and most popular bookstore before Borders, shut down a few years ago. If any local bookstore should have survived the competition from Borders it was the Thunderbird. It's primary customer base, Carmelites and Carmel Valleyites, are not prone to driving all the way to Seaside (the scary town, in their view) or Sand City when a more pleasant option is close at hand. But the Thunderbird's long-time owner was ready to retire. I believe it was her inability to find a suitable buyer rather than corporate competition that ultimately led to the store closing. It may be that potential buyers were afraid they couldn't out-compete Borders. What a pity, because if someone had faith, we'd still have a fair-sized bookshop on the Peninsula after Borders shuts down next week.

But at least the Thunderbird tried. Two locally owned shops actually gave up before the corporate competition even opened up. Does anyone remember H&H? It was a family owned hardware and home center that occupied the building in Seaside where Staples and Smart & Final are today. H&H was arguably the best hardware store the Peninsula ever had. They had everything you could possibly need, PLUS an extensive selection of arts and crafts supplies in the back. It was a wonderful store.

But the owners gave up shortly before Orchard Supply opened up in Sand City. News reports at the time indicated they didn't expect to survive the competition from Orchard, so they didn't even try.

Palace Stationery, an office supply shop on Alvarado Street in downtown Monterey, took the exact same attitude several years later when a McWhorters office supply opened in the former J.C. Penney building a few doors away. Palace owners assumed they couldn't survive so they shut down without even waiting to see how McWhorters would affect them. Funny thing, though, McWhorters had a very brief life in downtown Monterey before it disappeared into oblivion. I'm convinced that Palace acted too hastily because Palace Office Supply's Santa Cruz operation is still alive and thriving. It might still be in Monterey, too, had they not given up so easily.

So I've gotta admire one local business that didn't give up. When Home Depot opened in Seaside, everyone thought M&S Building Supply just down the street would be toast. Not so. Before Home Depot arrived M&S made itself more visible by painting a large red sign on their beige building indicating that they've been around dependably since 1962. More than six years later, M&S is still there and appears to be thriving.

When it comes to corporate behemoths vs. mom & pop shops, I'm thinking that the conventional wisdom may not be so wise after all. Those Goliaths aren't always as invincible as they seem.
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Unknown said…
Jim, I agree with your hypothesis. There may be another contributing factor: the tightening credit market. In the first half of this decade, I think those BigBox stores would take a sustained loss just to run their competitors in the ground. Now, they probably cannot afford to do this anymore and their big corporate overheads are coming back to bite them in the a$$. Local, family-owned stores usually have less overhead. And M&S's entrenchment in the contractor community also helps it stay in business...
September 4, 2011 at 12:38:00 AM PDT

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