November 12, 2007

On Seamark and Starbucks

Recent news articles reported the closing of the Seamark grocery in Nags Head and the approval of a Starbucks in Southern Shores. The two events are just the latest indicators of the globalization of the Outer Banks. From the big box Walmart/K Mart to the chain restaurants (Hooters, Applebee's etc) the demographics of Dare County now appeal to the chain stores in way they didn't just 10 years ago. I am not sure what the change was its not a good one.
There are 3 impacts from chain businesses that degrade the quality of life in a community. The first and most often cited is the threat to local small businesses. Seamark is the latest example of this impact. Talking with manager's at Seamark they explain how they can't compete, not just with other grocery stores but with a chain like the Dollar Store, that sells a loaf of bread for a buck. Seamark pays $1.40 wholesale for the same loaf. Food Lion and Harris Teeter have the resources to pressure the small retailer until they fold. It's hard to compete when the playing field just so uneven.
The second impact derives from the first. As locally owned business close wealth is taken out of the community, wealth bred by talent and commitment to the community. It is local business owners who provide much of the leadership for non-profit and community groups as well as the financing. The chains tout their support of local charities but it is limited to money not not nearly as much money as local businesses put back in. Look at the founders of the Outer Banks Community Foundation. Eddie Green, David Stick and George Crocker all successful local business owners joined by Andy Grifftih put up the seed money for this important community resource not Food Lion or Home Depot. Look at the current OBCF Board of Directors and again you find local business owners, committed to investing in their community. The more money that goes to global shareholders the less returns to local stakeholders. The equation is just that simple.
Finally, the spread of chain businesses destroys the unique local character of the community, yes there are still lots of great local eateries and some great local retailers but they are declining. The internet brings the world's retailers to our homes then the big box store puts it in our community. It's hard to be a bricks and mortar retailer in this environment. Meanwhile, the signs, the stores and the products are all the same. We look more like suburban DC than suburban DC.
Nags Head has tried to fight this battle with architectural standards and size limits but we are losing the fight. Other local communities seem to embraced the big box stores for their tax values.
Paula my Queen of the Surf Pirates, wrote this spring about shopping at local surf shops, well the same is true of other local businesses. If we don't patronize them then they will fail and they may fail even if we do, witness Seamark. If you are concerned about the beach keeping some of its identity then a good way to help is to shop locally, Christmas is a good time. Consider it an investment in your future.
Vote with your dollars, they are the most powerful votes you have.


At 1:52 PM, Blogger kevin said...

I just read about the Walters' and Seamark. While it does sadden, you have to remember that Food Lion started out with one grocery store way back when in Salisbury. In order to be able to sell a loaf of bread for what a smaller operator pays, it expanded and built economies of scale and did what you're supposed to do as an American enterprise.

For whatever reason, as Seamark saw this coming years ago, they were unable to cope ultimately. That was not an inevitability. I think if you really dug around you'd find that the actual ownership of a number of beloved OBX brands resides outside the OBX. Does that make them less desirable?

And let's not forget the one thing without which the so-called chains could not exist on the Outer Banks. Customers. And not just tourists - an you all know that ...

At 10:57 AM, Blogger Bill said...

Well in my opinion, Seamark has an excellent "opportunity" that I am amazed they senior executive management in that organization does not explore. Specifically, Seamark could shift its model to match a grocer such as Whole Foods or Trader Joes. Basically a focus on higher-end organic and fine foods. Basically, if they did some investigation into the business model and inventory of these establishments, and established a similar model, they could be extremely successful! Their Southern Shores location is prime for a consumer base which would support this model since the income level in that area is the highest for the entire OBX. Nags Head may be less successful, but Southern Shores is key.

At 2:47 PM, Blogger Bill said...

Additionally, though the chains do impact "charm" derived from local business, it also should be a spark to foster local innovation. I believe that in local economies, small business becomes "complacent" since owners believe that their model "worked/works" and does not need to evolve. Perhaps this concept is driven by "main street" ideals where the only shareholder is usually the business owners' themselves. If things evolve around them, they remain status quo and do not seek/invest in change.

I see a current example of this concept in the local business Times Printing, and their Coastland Times newspaper. Times Printing remains "mom & pop" status quo, while their main competitor the Sentinel has evolved to provide a fairly robust online presence. The Coastland Times online web site provides no local news content or functional use other than marketing related contact phone numbers and emails. While the Sentinel includes an online version of the paper and the ability to submit advertising requests online.

I do not run a local business on the OBX; however, if I did, I would actively assess the market here today and adjust the model, rather than remain status quo and locked into the past when the model was originally successful. Without innovation and the willingness to keep pulse of the local/regional/national/global market/trends, small businesses will fail, especially in an area like the OBX where we are heavily influenced by mainland suburban needs.

If anything, I welcome the chains (to an extent) since they do provide an opportunity for local business, if they are willing, to take up the challenge and innovate.


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