Questions on box or chain stores and malls

JOCCO

Well-known Member
Was doing some xmas shopping and business trip to 2 nearby cities. Seems all you see is box or chain stores and restaurants. I can't figure out why the chain restaurants make a go of it vrs small independent ones??? As far as box type stores do any of you think there reign will slow down or end??? Some financial reports say some are on shaky ground far as balance sheets go. With me, I don't get to into them, they are not my favorite place. Seems some are either full or never have any customers (Mcdonalds vrs Burger thing) NOW FOR MALLS seems like many are losing venders (empty space) Also they say online shopping is killing them.
 
Amazon is hurting some. A few years ago, Indiana passed a law requiring amazon to collect sales tax. So that might tell you how much Indiana thought they were losing in taxes.
 
I travel a fair bit in my job and one of the self imposed requirements I have is to never eat at a chain restaurant. Sometimes it's downright difficult to do (most recently in Calverton, MD), but I've found Austin, TX to be one of my absolute favorite cities. The food there is amazing and there's such a diversity of locally owned restaurants.

With the chain restaurants, they have to be "safe" with their food. Can't be too spicy, can't be too garlicy, etc because it's going to be consistent and it has to taste the same in Boston as it does in Sante Fe. What's worse is how much people love the generic, bland food they push out. I have a friend that swears Olive Garden is the best Italian food he's ever eaten. Ugh.
 
I have had some good meals and some bad in the chain places. Same as MOM and POP places.
 
One thing I enjoy about Austin Texas when we visit my favorite daughter there, is all the small mom n pop NON FRANCHISE restaurants and shops there..........

I make it to our local BIG MALL maybe once every 2 to 5 years and then ONLY because that's where Sears tools are located (but I hear its going out). If they depend on my business they would be broke a day after opening lol. My local "watering holes" are either the American Legion or a restaurant that's been in the same family and location FOR SIXTY YEARS, owner has bar tended there 46 years after his dad passed.

HOWEVER I will admit to loving one favorite franchise that's STEAK N SHAKE wow I could live (until Im too fat or have the big one) on their burgers n fries and real milk shakes BEST THERE IS

DITTO on online shopping. I go on the net and click on a product and it arrives in a couple days on my doorstep at a lower then local store price and saves me going to the freaking mall and dodging teens on cell phones not watching where they are walking.

John T Getting to be an old grouch and fuddy duddy and so proud and happy for it lol
 
John For me online or catalog (call in) its just a time issue to go to city deal with crowds then they may not have what I want especially tractor/industrial stuff.
 
"With the chain restaurants, they have to be "safe" with their food."

I agree, not only do they have to play it safe, it's like the manager's hands are tied as far as accommodating customers needs. Some don't allow substitutions, probably because it confuses the computer generated ticket, afraid they might give away 2 cents worth of food to satisfy a customer!

There is Mexican Inn chain restaurant here, if you go in as a large group, say more than 8 people, you have to split your group to 2 tables. Can't pull 2 tables together, that disrupts the flow, against fire rules... Nonsense! We go down the street to Antonio's, family owned, they jump through hoops to get you seated and served any way you want it! Guess who gets our after church business!
 
People are creatures of habit, herd followers. We are more like cows than we would like to admit. We want the familiar, the same......

Box stores took out the independent local retailers back in the 80s.

Now on line buying is taking out the box stores.

My town the 15 year old target is closing next month.

I hear the 3 year old Menards is on shaky ground.

The Walmart that came to town 5 years ago has never been full; it closes over night, everyone hates the food side of it and supports the two good grocery stores we have in town.

Kmart left when Walmart opened.

Next year with just Walmart in town, everyone will drive 30 miles to the bigger town and shop there again, likely the Walmart will keep trucking on as the only game in town with higher prices.

Oddly, we still have our Radio Shack and small Sears appliance stores.

Anyhow, retail is in trouble, any store, online is taking them apart. A display floor and cash registers costs more than a warehouse and order processing center, so that is how its going to be. Local towns taxed the retail space pretty high, that is going to make some changes too as stores close, and where does the local town get its tax money from then?

Paul
 
Sure the internet is losing to online sales. That's why Wal Mart and Target offer online sales.

Lot of the failed abandoned malls are because they are old. Cheaper to let the city take em for taxes than to repair them. And yea a lot of stores in malls have priced their stuff according to the price they are paying per square foot. And cheaper prices online, without have to deal with a crowd is going to hurt them. No one signing leases means empty stores and no income for that space. Enough and the owners of the mall can't maintain the building or pay taxes.

Because there are no federal laws dealing with online or catalog sales and state sales tax yes states are losing revenue. The states have been pushing the federal government to pass a law requiring that companies must collect sales tax from everyone. They have refused because everyone has different rates and it would be a mess for the feds to collect those taxes then disburse them to the correct states. They figured that if they required the companies do it a lot of small specialty sites couldn't afford the burden of pay each state. So state X passes a law requiring that the company has to pay. What a waste of time. Just how are they going to enforce that when the seller is in state Y? So that law is a waste of it's tax payers money.

Rick
 
My wife works at the box store everyone seems to love to hate. Black Friday sales were horrific this year. The district managers are all in an uproar demanding to know why sales are down so much this year! Seems women are wising up. Local store was advertising TV's at a good price. The catch, of course, was there were only six of them in the store. The last couple of times I was in the mall in Watertown, the place was crawling with, shall we say, "persons of middle eastern descent". The last time we got suckered into the black Friday thing was when the store had bed sheets with a high thread count for a heck of a price. Supposed to be premium quality. I fought the crowd (dang near riot conditions)to get a set of them for my wife. They didn't last as long as the el-cheapo ones she normally buys. Be interesting to see the online sales figures for this season also to ascertain if it's online sales killing the stores or the crappy economy?

The last I knew the lease rates for the mall sites were outrageously expensive, too.
 
Personally, when I travel, I'm usually too stressed after long days to worry about unknown, local food places. I like the familiar, common food. I always know what I'm going to get when I eat at a national chain restaurant. Especially if I'm in a hurry.

When I have more time, and in a good mood - I'll take on the local establishments. I like to support local restaurants and the people are better too, but it's not always on my mind when on the road 14-hour days. Just want to grab a meal and crash in the hotel.
 
IS chipolets (spelling) a product of "With the chain restaurants, they have to be "safe" with their food." ????????????
 
I might also add that the chain restaurants have a huge advantage being able to volume price inputs that no individual owners has. It's the same reason Wally-World sells guns for less than they cost an independent dealer. Wally-World buys guns by the railroad car full, and the local dealer is buying one, two or three at a time.
 
It is very simple: Big stores have a huge cost advantage over independent stores. They have fewer employees relative to their sales volume than do the small stores. Meanwhile, they buy in volume and don't bother stocking items that have a small sales volume, which gives them a very high profit margin. It is not possible for smaller stores to compete on price; they can only compete on service.

The Ace Hardware stores seem to be bucking the trend. Although the stores are independently owned, they seem to follow a common formula: Good service and a good inventory of items the big box stores don't bother with (e.g. oddball fasteners).

As for restaurants, the chains are successful because we are creatures of habit. You can go into a McDonalds or Cracker Barrel anywhere in the country and you won't be faced with anything unfamiliar. (Which is not to say the food at chain restaurants is fit to eat, only that it is consistent.) For the most part, my wife and I avoid the chains when traveling; as a result we have had both very bad and very good meals on our trips.

Online shopping is no doubt affecting the mall stores, but they are being squeezed from other directions as well: They pay astronomical rent, while their target customers (middle-class urbanites in their twenties) are not making the kind of money they made twenty years ago.
 
Here's a link to a PDF showing that in the third quarter,7.4% of sales were Ecommerce.
I heard somebody from Macys interviewed a few weeks ago. They said over 90% of their sales were still brick and mortar. He said he expected that to eventually fall to near 88% then level off. For some people,brick and mortar shopping is still a social event. If I had to guess,I'd say that's mostly women.
Dept of Commerce
 
When we are traveling and looking for a place to eat, we follow the pickup truck rule. Go to the place that has the most pickup trucks in the parking lot. The food will be good there.
 

I have been involved with servicing restaurants for over forty years, and have watched the rise of the chains. My customers were independents or local chains. The huge national food service distributors are driving the locals out by charging them way more so that they can sell to the chains for less.
 
Guess my case I always need the "oddball" your right chains seem to stay in the fast moving lane. WITH ONE EXCEPTION SEARS: selling well pumps and exercise equipment.
 
Hi Oldtanker, you are correct on the online state, city and county, tax collection system for online sales. I know someone that
was a computer programmer that work for a large online system and it was just all most impossible to keep the programs up to
date with every change in the local state, city and county sales taxes.
The younger generation would rather sit looking at the online sales on their smart phones and order online than make the effort
to go to a store. Their attitude is "if I don't like it when it arrives I will just return it", where as our generation will not
buy anything without "kicking the tires" first. Many other countries have adjusted to online sales and off shore sales by
adopting a nation wide sales tax called a VAT, HST or GST.

my opinion only
JimB
 
So called big box stores are here to stay, you can't buy lumber on line or at least not a few 2 X 6's when you need them right now, they all have the same advantages over the small operators, volume and market share. Small, relatively isolated towns will continue to have some successful independent operators of lumber and hardware stores but as the cities and suburbs expand the box stores get closer. 35 years ago we thought it was a big deal to go every couple of weeks to the nearest town of any size which was 3o miles away, this day and time we have to go that far if we need anything besides a few groceries or dollar store items. I think malls have seen their glory days, small specialty stores have to charge big prices and young people don't have the disposable income they used to have. I think malls will definitely fall to on line retailing in the next several years. The belly burner joints like Mcdonalds and burger king will probably continue to do well as long as kids are whining to go and people are too lazy to get up and fix a sandwich for lunch, most of the restaurant chains have cookie cutter menus and sell second rate beef at fairly steep prices, I know they are full 7 days a week, I guess people can't or don't cook much anymore.
 
Everything will eventually consolidate into one big mega store - maybe walmart, maybe amazon warehouses with cashiers.

It's the natural progression of things.

Americans won't care about it being a monopoly if the prices stay low - with lots of cheap )#($* products.

In a bad economy, people don't care about quality, and we're not turning this economy around any time soon.

And - why not just have the government run that big mega store - they way they want to run our health care. Then they can assure every person can get their fair share of products they don't really need.

Do I sound cynical?
 
Most chain retaurants get all the deliveries from Sysco Foods. So I figure you are eating the same thing at TGI Fridays , Bennigans ,etc, all the mid range priced restaurants . The Sysco catalog may offer 10 varieties of fries etc. but the taste is not all that different and most of the food has been frozen. I don't mind to pay a little more for where the chef has done his own shopping at local markets for fresher non- frozen foods.
 
Sooner or later, it had to happen. Many entrepreneurs are looking for ways to avoid the high rents, high inventory costs, and high startup costs involved in retailing. While the "box stores" seem to have plenty of money to throw around to pay high rents and costs, the average small business guy does not. Online sales provide that escape from big expenses. High costs that continue to rise eventually result in some type of backlash. I would say that in the next few years, the big stores are going to have to make some adjustments in their policies or risk going out of business. Malls are going to have to provide ways for smaller businesses to exist at a reasonable cost or face a lot of empty stores. Too many empty stores in a mall could cause them to go bankrupt.
 
Or they can go the way of our local mall- Sears (the anchor store) on one end, a 10 screen theatre on the other, and most of the space in between is now leased by government agencies (VA, Employment Security, you name it). Only a couple of retail outfits and a beauty salon left in those 10 or so spaces.
 
I avoid Mom and Pop anything. With a chain you know what the menu will be and have some idea of the quality (or lack of) the food. Chain restaurants spend a ton on making sure that cottage fries in one are identical to cottage fries in another. There are some very good chains and some junk - you choose.

But with Mom and Pop you never know what to expect and it may well be filthy and the food bad. There is no way to have an expectation either way.

Same goes for small or independent lumber yards or hardware stores. I do not want to take time to go to three independent stores if I can buy all I need at one.

Big malls with inside store entrances are about dead, being replaced by strip malls with parking near the store entrances. I like that, too, because I hate to go to the big mall and walk two blocks, even though it is inside, to get to the store I want.
 
Wow- great discussion today. Our Sears catalogue store just closed- the owner put a very bitter letter in the local paper about people not supporting her. The trouble is, we tried! When you went in to buy a major item, they let you know just what a problem you were causing. On more than one occasion, I have left there annoyed, and gone precisely one block to our local Home Hardware ( yes, I used the name on purpose!) . Usually , within half an hour, I have a nice shiny new thing loaded on my truck, often at a lower price than Sears, and the nice people call me by name and ask how things are at home. The local stores can't always fill our needs, but we do try to support the good ones.
Back in the day, my buddy and I rode motorsickles all over the place. We would always eat at independent diners- you would inevitably get a great meal, or a terrible meal- no middle ground. The company in diners was always interesting. People went there to visit- they go to chains just to eat. Merry Christmas to all!
 
This is the wife...in rural areas, there
is no choice of where to shop. We only
have mom and pop hardware and
restaurants. Speaking of restaurants,
we've had poor service in chain
restaurants and excellent food and
service in mom and pop restaurants.
You're not going to get the flavor of a
new area by eating in a chain
restaurant. In Mom and pop places,you
learn a great deal more.
 
Our local menards store in a town of 20000 did 400000 in sales on black Friday alone.
 
"But with Mom and Pop you never know what to expect and it may well be filthy and the food bad. There is no way to have an expectation either way."

Yep, going to the chain places GUARANTEES that would NEVER happen!


(See link below.)
What can happen at the BIG places
 
I don't buy the sales tax collection arguments. I live in ND, we have a state sales tax of 5%, and municipalities are allowed to levy local sales tax. Amazon has a facility in the state, so we pay sales tax on all orders from them. They already have the software in place to deal with this. If I shop online, I pay 5%, if I go to a store in the town to the north the rate is 6.5%. The city to the south, the tax rate is 7.5%.
 
Malls are dying, I suspect mostly from Mis-management. In their heyday it was the place to be, the high lease rates were justified because they had the traffic. Some of it is the big chain retailers, when I was younger I went to the mall because it was one of the few places I could go and find clothes and shoes that fit and between all the stores I had some selection. Now the stores are all dialed in all have the same inventory and the same sizes because they all "know" what's going to sell, so that's all they stock. So many mall management companies have dealt with the changing retail market in a less than sustainable way. Occupancy rate is 50%? Double the rent so cash flow holds up. Other factors when the malls were set up of course they had depreciation, they depreciated the buildings and grounds, often rather than repairing or maintaining the mall they'd sell it and anything they got above book value was taxed as capital gains, not art a regular income rate so in effect our tax code has also helped kill malls and diminish quality in hotels and office buildings.
 

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