Chains vs Local Business

[FISHMANPET]

I stumbled on this article, and even though it's written from the perspective of how to run a franchise restaurant, I think it puts an interesting twist in the idea that a chain store is some faceless corporate entity and a local business is better in all respects. A chain store is owned by a local person, and they can still get involved in the community. On top of that, an owner of a chain franchise has corporate support in running the business, making it more likely to survive and thrive, creating jobs and the opportunities for community involvement, rather than just scraping by.
http://www.qsrmagazine.com/franchising/big-reveal

[RailBaronYarr]

It's a tough balance. Chains, even franchises, will use corporate resources in marketing, legal, accounting, etc, and more than likely their supply chains. On one hand, this is that company's "comparative advantage" in their city, employing many (sometimes thousands) of people. That's great, because the town the chain HQ is located in probably has some aggregation of specialization - think MSP with Target, Best Buy, Supervalu here in TC). They're also obviously successful for a reason (valuable product or service). Flip side, the franchise misses out on hiring these functions locally, leaving a gap in wages and career/learning opportunities for folks in town. They also typically pay employees less and donate less to local orgs than locally-started (non-franchise businesses) do (too lazy to find the citations).

Ultimately, I don't care where people shop or what business someone wants to open, as long as the chain isn't getting any inherent special deals or subsidies.

[mattaudio]

One thing many folks don't realize is that our subsidy of the automobile for the past 60 years grossly skewed our nation's business climate in favor of chains and against locally-owned small businesses. As Chuck notes, who do you think can afford the six-figures necessary for one of those super tall gas/food signs you can see a mile away on the freeway at 75 MPH?

[Minneapolisite]

Local. Get any kind of coffee drink at Peace Coffee, Blue Ox, etc, vs Starbucks or Caribou: local wins big, there's just no comparison. Not all the time mind you, but when you list off the best spots it's local joints that make up the bulk or all of the list time and time again whether it's restaurants, shopping, bars, etc. I could go to Noodles & Co in NE and maybe save a buck or head a block up to Masu for some way superior tasting and filling ramen for marginally more.Taco Bell on Lake St or the plethora of excellent and cheap taco joints? The local places smash the chains both on taste and price. By and large I spend my money at locals businesses and make it a point to do so.

[Snelbian]

There are occasional cases where chain is clearly better. Harvard Market vs. CVS comes immediately to mind.

[JMS9]

This shit again? I don't need some asshole looking down their nose at me because I go to Caribou or Target instead of some local barista or a Mom & Pop store. I got to Hells Kitchen and Keys. And I also go to Five Guys and Chipotle. I go to the hardware store down the block and I go to Home Depot. These threads are so pretentious.

[Snelbian]

Did you even read the first two posts?

[Anondson]

Did you even read the first two posts?

I'm going to go with, "it wouldn't have made a difference".

[John]

Heinen's is a grocery store chain in Ohio, and they are doing a very creative and interesting adaptive reuse of a gorgeous historical building in downtown Cleveland. I absolutely support this kind of investment in the urban core by a retail chain.
http://www.cleveland.com/business/index ... evela.html

[go4guy]

I go to Caribou, Target, and Byerlys. Those are all local

Would I rather go to a local burger joint? Sure. But Burger King is much quicker. I dont have 90 minutes for dinner or lunch every day. Chains are all about convenience, quick service, and many times cheaper.

[mplsjaromir]

The great thing about chain restaurants is that this guy reviews their newest offerings:

https://www.youtube.com/watch?v=YFpP1qJZGUU

[FISHMANPET]

I saw a Domino's semi trailer driving through campus, and it gave me a thought about the future of retail and supply chains, and I've decided to share that thought with you all.

So back in high school I worked at a fast food restaurant and we'd get deliveries twice a week from a semi truck that came from Chicago (this was in La Crosse, WI so a decent distance). We didn't take the whole semi-truck, so it supplied other restaurants as well (maybe other Fazoli's, maybe some other random chains, who knows). But I feel like these 40 foot semi-trailers are not long for this world in our urban areas.

So back to this Domino's. I would think part of the appeal of a nationwide chain like Domino's is that the marginal cost of adding another one in an area is pretty low. You've already got a distribution network setup to supply the area, so how hard is it to make one more stop. You may not even need to make an additional run from the warehouse each week, so your transportation costs for the product are nearly zero. So just literally making a number up off the top of my head, but what if that 40 foot semi can supply 10 restaurants each trip into the city. Now suddenly this 40 foot semi can't make the trip anymore. Either we've outright banned them, or we've just re-engineered the roads so that you basically can't drive one through most of the city. So now Domino's can't drive a semi from Ann Arbor Michigan (my best guess as to the nearest distribution center based on their website) straight into the heart of our city. If they want to to deliver here, maybe they can't do it in anything bigger than a 16 foot box truck (and maybe that's too big even, maybe they can only do it in a delivery van of some type). But assuming the 16 foot truck, then maybe each truck can only supply 4 restaurants in a trip.

So what is poor Domino's to do? I'm sure it would be incredibly expensive to pay to drive 2 and half times as many trucks from Ann Arbor to Minneapolis. So suddenly this nationwide distribution network isn't so great anymore. They could open smaller supply chain centers all over the country. Maybe put something in the suburbs that takes deliveries from Ann Arbor and moves them onto smaller trucks that can enter the city. I don't know how the economics of restaurant supply chains work out, but maybe that puts a serious dent in Domino's price advantage, and we start to see them pull back, allowing more local or regional businesses room to grow.

And this isn't really a thought about Domino's specifically or even restaurants in general, but really any national chain that doesn't need a fully 40 foot trailer load delivery to keep them supplied. How will our changing streets effect them?

[Anondson]

I observed the same with various McDonalds. I've seen them get supplies delivered using the massive 18-wheelers. So large they either obstruct the drive through, deliveries are made only between rush times, or so large they need a nearly empty parking lot to turn around in.

What will happen is that significant portions of where people live are going to be unreadable unless they adapt their distribution. The large chains might adapt the fastest, or are so stubborn in the face of changing trends they lose to those ready.

I think chains that can bring FedEx- or UPS-level distribution savvy to their own supply chains will adapt well.

[xandrex]

Might we simply look at how urban areas both inside and outside the country already handle this?

London has an awful lot of McDonalds despite many of their streets being very narrow and congested. Copenhagen too.

[kirby96]

Might we simply look at how urban areas both inside and outside the country already handle this?

London has an awful lot of McDonalds despite many of their streets being very narrow and congested. Copenhagen too.

Slightly off topic, but I've found it interesting how the Europeans seem to have a love-hate relationship with fast food chains. Generally, I gather they tend to look down on the low-brow American mono-culture they represent, but when I've lived in London, Copenhagen and spent time in other places I am invariably surprised how after a night of a few drinks my local friends would suggest stopping at McDonald's or Burger King on the way home. Sort of like the White Castle run I suppose. But this literally seemed to happen without fail on a Friday or Saturday night in many different cities, amongst 30+ yr old professionals, not just 20 yr olds.

[mattaudio]

What, no drunk doner kabob run? That seems like a staple of a good night out anywhere in Europe.

But on that note, I remember in China and seeing people on dates at KFC or Papa John's. It was really a sign of sophistication and luxury for many urban Chinese to go to these American fast food chains.

Back to Minneapolis, I agree on the issue of semis being ridiculous for deliveries to small urban stores. I think this every time I see a big semi unloading to my neighborhood Dominos... blocking the bus stop.

[MNdible]

While I agree this is no doubt an issue, you'd think that these big companies have plenty of smart people in supply management who have decided that this is the most efficient way of doing things, right?

Short of some kind of legislation, I'm not sure how you'd prevent it.

Like many things in the US now, with distribution the cost of labor is probably your biggest line item (more than capital costs, equipment costs, fuel costs, etc.). And this will only become more so with the push to increase minimum wages. So route efficiency becomes more important, and the most efficient route is one which requires you to only make one return to your distribution center at the end of the day, and if that means you're driving a big truck, that's what you'll do.

[mattaudio]

It's not so much an issue of preventing it, as it's an issue of not accommodating it.
Andrew Price has some insight: http://www.strongtowns.org/journal/2015 ... ow-streets

[MNdible]

You'll forgive me if I don't jump on a solution that requires us to bulldoze our entire built environment, right?

[kirby96]

What, no drunk doner kabob run? That seems like a staple of a good night out anywhere in Europe.

Oh, that was definitely in the mix. Sausage trucks in Denmark certainly were as well. But I have repeatedly thought to myself my fast food chain meals are literally about 10:1 outside the U.S.

...although I gotta admit the shear frequency of late night overseas carousing may have just as much to do with that as the propensity for the Danes, Belgians and Brits to crave a Big Mac at 2 in the morning.