Monday, May 21, 2012

Formula Retailing?

Many formula retailing establishments are facing frictions in smaller towns. Revised zoning laws seek to "preserve local character" by limiting or prohibiting so-called formula restaurants or retailers that force patterned menus, uniforms, signage, shopfronts, etc. As ordinances are tested in court, the legal framework for such zoning control is adapting and gradually getting stronger.

Some argue this is simply an audacious barrier-to-entry imposed by greedy non-competitive local retailers. A new entrant might be severely limited in allowed retail space, but an existing business would be free to expand, devouring neighboring businesses with impunity is natural in free enterprise.

Some see franchises and chain stores as a creeping illness, a disease that drains character from the local high street, making each Main Street nearly identical to many others, creating homogeneous retail districts, a bored subclass of clerks & consumers, and stale shopping experiences. Locally-owned franchisees send substantial franchise fees to far-off headquarters, while other local businesses may keep more money in the local community.

Formula retailing systems can be highly efficient, but efficiency may be expensive. Campaigns against formula retailing are growing in strength.