Create a Town Office to Collect and Preserve Data on Financial Impact of New Local Big Boxes

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When a major retailer such as Wal-Mart, Sam's Club, Home Depot, Bed Bath & Beyond, Barnes & Noble, CVS and others open up a new store within a radius of say 0 to 30 or more miles from the center of a town, many small businesses in the town, many employees, many property owners, many professionals, and many others will feel an adverse impact. Some sooner, many later, but the impact will be felt. Records of this continuing, increasing adverse impact upon the town and its residents and small businesses should be collected and preserved for subsequent redress in court. I recommend that an office be created in the town which encourages residents and local businesses to make appropriate reports to the town office. For example, local businesses should leave a copy of their certified (or uncertified) financial statements each year with the office. Also, wage earners could have a sheet maintained in the office for reporting hourly wages and annual income on a periodic basis. Property owners could report the selling price or purchase price of property they buy or sell located in or near the town. Also, the town should collect sales information during the 30-day or 60-day period after a major retailer opens its doors, because the opening of the store will often put local businesses out of business within a short period of time, within days or weeks after the opening in some cases. Also, the office should try to keep track of average wages, average home values, and the number of residents in the town. All of this information could be useful to an economist for proving facts in litigation, with the facts otherwise being very difficult to put together. But with such facts, local small businesses and others could obtain significant recoveries of money for various violations of law by the major retailers. Local economists should be invited to participate in the development and use of this data base.

Also, local businesses should file price alerts with the office to record a major retailer's extremely low retail price for a specific item, the local business person's cost for the same item, his resale price, and his profit margin. Most importantly, the local business should identify the name of the manufacturer that is supplying goods to the major retailer at substantially lower per-unit prices than the manufacturer at the same time is selling the same goods to the local business directly, or to the wholesaler that is supplying the local business. The Town Office should keep this information to help analyze and prove what is happening. A major retailer's retail price, when you know its profit margin (such as 46.8% for Advance Stores and 46.1% for AutoZone) is a good indication of the highest per unit price that such retailer paid for the product, which often is one half the price paid per unit at the same time by the major retailer's local competitor (if buying directly from the same manufacturer).

I envision that if a number of towns and villages implement the reforms described in this website, the mayors or councils for the towns can make a demand upon the offending manufacturer (offending in the sense of violating the federal Robinson-Patman Act and injuring local businesses in these towns and villages) for past damages and to cease and desist violating the Act or at least to give the favored price to the local businesses in such towns and villages. Otherwise, the towns and villages will bring a coordinated lawsuit (a joinder, not a class action) to obtain both damages and injunctive relief by a federal judge. Some manufacturers may wish to avoid litigation of this type, and either agree to cease and desist (in exchange for a release from prior damages, possibly) or agree to give the lower price to the small businesses in such towns and villages. In this way, a coalition of towns and villages can be effective for themselves in enforcing federal law that the federal agencies no longer enforce, and become a replace for the federal government.

Town Office Should Keep Record of Costs Incurred by the Town because of New Store of Major Retailer. Many residents of a town believe that the lower prices they seem to be getting in a store of a major retailer is a great bargain, without any costs to them. Actually, the costs are quite substantial for all, even though they are often not apparent. The town should have an office keeping track of these costs, which should include:

1. Reduction of assessments of property purchased or used by the major retailer

2. The dollar amount each year of sales tax concessions made to get the major retailer to open its new store within the town

3. The full costs in having the town's medical facilities treat the employees of the major retailers, when the employees lack the assets or insurance coverage to pay for such services

4. Costs of creating or improving roads to and around the retailer's new store

5. Costs of plowing, maintaining and policing these roads

6. Costs of putting in drains, sewage pipes, water pipes, fire hydrants, electric lights and maintaining such facilities

7. Costs of experts required to review retailer's various applications for approvals and licensing

8. Costs of policing the parking lot and surrounding area

9. Emergency medical services for persons victims of violence in the retailer's area

10. Costs of unemployment, welfare, other social services to the retailer's employees and as to persons put out of work by the retailer

11. Costs of increased crimes in the community, including the loss of victims and the costs of services by the town to deal with the crimes, including prosecutions and incarcerations

12. Loss of sales tax, property tax and other revenues from small businesses adversely affected by the retailer's new store

Email This Proposal to Gov't Officials, Chamber of Comm., Trade Assoc., Small Businesses, Other Interested Persons