May 9, 2005

The Neighborhood Retail Alliance Blog

If you're interested in how small business groups view Wal-Mart, and you want to know more about the resistance to Wal-Mart entering NYC, The Neighborhood Retail Alliance Blog is the place for you. Their latest post talks about the sales tax in NYC; it reveals what the group is about, and the nature of the arguments it uses against Wal-Mart:

Which brings us to the Staten Island Wal-Mart controversy. Before the Mayor, Congressman Foscella, or other elected officials try to convince folks that building box stores will prevent retail leakage to New Jersey they better first level the playing field by dramatically reducing the cost of doing business in NY. If they don�t and a Wal-Mart is built on the South Shore, than we predict you�ll find as many Staten Islanders still shopping in Woodbridge, NJ as you�ll find at the outlet on Richmond Valley Road... Islanders will continue to flee and instead of keeping customers in New York, the Staten Island Wal-Mart will draw people in from the other boroughs. Therefore, consumer dollars will simply be transferred from existing NY retailers to Wal-Mart while the fundamental cause of the leakage will remain ignored.
I agree that "leakage", meaning the dollars spent by NYC residents choosing to shop outside of NYC, could be lowered by competing with New Jersey's lower tax rates. But the idea that NYC businesses are somehow deserving of these retail dollars is, in my mind, not compelling at all.

If the Alliance has specific proposals to lower the cost of businesses in NYC, as opposed to just transferring costs to other types of businesses, I'd really like to hear them. But wouldn't any such proposal also lower Wal-Mart's cost?

Granted, lowering the sales tax would help neighborhood businesses compete against WM since a sales tax increases the relative cost of shopping at higher-price neighborhood stores. But the sales-tax is not the cause of higher pre-tax prices...

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Also see their main homepage about WalMart. I'm almost amused that they accuse Wal-Mart of routinely pricing below cost, even though (from my experience) two-for-one specials and pricing below cost are routinely used by neighborhood businesses to clear out poor-selling merchandise.

And guys, if you're going to discuss lawsuits against Wal-Mart for predatory pricing, might it not also be relevant to note which cases Wal-Mart actually won.

Posted by Kevin on May, 9 2005 at 07:56 AM