Small biz surviving the Big Box

How a local hardware store survived the nearby incursion of Home Depot – and now how it’s game for the new battle as Walmart opens across the street. This is the story of Intown Ace Hardware, owned by Tony Powers and Dave Jones, in Decatur, GA. As told by Catherine New in the Huffington Post.

Starbucks’ best intentions can’t help U.S. small business – but yours can

Beginning today (Tuesday, June 12) Starbucks is selling a new ceramic coffee mug for $10. The novelty in this is that the mug is made in America – East Liverpool, Ohio, actually, which I’ve just learned was once the nation’s pottery capital. The mugs have their own display, separate from all the other ceramic mugs and travel cups that Starbucks sources from China.

For $5, Starbucks is selling a bracelet made in America; for $10 you can get a coffee mug – all in the name of helping U.S. small businesses. Or you can go the direct route – by spending your money at an actual American small business. They're practically everywhere.

This is part of an initiative by Starbucks CEO Howard Schultz to help rebuild American manufacturing. In addition to the mugs, for example, he has sourced production of Starbucks’ Via line of instant coffee to a new plant the company is building in Georgia, which will eventually employ 140 people, according to media reports.

I read about this in the New York Times. Ironically, I’ve just sent you to read the original article via a link at the India Times. Why? Two reasons: First, the New York Times‘ metering technology to limit the amount of free reading you can do seems to be glitchy today and won’t show me the story; second, it’s interesting that folks in India – the beneficiaries of so much of our own outsourcing – find it newsworthy when an American company chooses to employ American workers.

It’s good that Starbucks and CEO Schultz have turned their attention toward American employment. Americans are, after all, the people who still purchase 69% of everythingStarbucks sells – despite the company’s agressive international expansion.

In the company’s most recent (2011) annual report, here’s what Schultz has to say about Starbucks’ initiative to support American workers:

Most recently we have focused on the high unemployment plaguing the United States, and I am proud that, as an organization, Starbucks is doing its part while appropriately supporting our business. We added approximately 3,700 net new jobs last year, and plan another 12,500 globally for 2012. But we can do more. That is why, in association with the Opportunity Finance Network, we launched Create Jobs for USA through which our customers can donate toward restarting the nation’s jobs engine through loans to community businesses. In addition to $5 million seeded by The Starbucks Foundation, approximately $2 million has been raised in the first two months and loans have begun flowing to small companies and community businesses across the country. Like Starbucks ethical sourcing, environmental and volunteer efforts, the Create Jobs for USA initiative is right for Starbucks because it authentically reflects the times we live in while being relevant to our brand.

At C Jones Books & Tea, you can buy coffee directly from owner Carl Jones, who roasts and grinds beans in small batches on premises – which beats buying a corporate-sourced bracelet claiming your solidarity with people just like Carl Jones.

I’m not the least bit cynical when I say that Schultz’ comments are welcome and helpful. It’s wonderful that Starbucks has seeded small business development efforts with $5 million of its own money; that’s nearly 0.3% – or 5 hours worth – of its 2011 profit of $1.73 billion.

Starbucks’ new mug promotion is credited with saving American Mug & Stein Co. – reportedly one of the last two remaining commercial potters in East Liverpool. American Mug is said to have doubled employment from this deal;payroll is now up to about 20 (another report put it at eight) and the owner says they’re considering adding some machinery for the first time in order to speed up production of their hand-made mugs.

So let’s see, if the entire Fortune 500 list of America’s largest companies would follow the example set by Starbucks, the company’s Let’s Create Jobs For USA initiative would be responsible for 10,000 manufacturing jobs (at companies that haven’t bothered to update their processes in about a hundred years). That’s just about the number of jobs cut across the United States between 2-4 p.m. on Thursday, Feb. 19, 2009 – the moment in time when I was delivered from corporate America.

I know how this sounds. Snarky, cynical and negative. That’s not because I have anything against Starbucks (OK, I think their coffee is somewhat bitter and overpriced, but other than that….)

Starbucks really is being a good corporate citizen. But the point is that Starbucks isn’t the problem any more than it is the solution. We are.

My home town, a Cleveland suburb of less than 50,000 people – is host to two Starbucks stores. There are at least four other independent coffee shops that I can count – five if you include a place that’s really just a bakery but offers a pretty good cup of coffee on the side.

If these shops behave like other independent merchants, they contribute far more to the local economy than Starbucks. Local merchants tend to donate more to community fund-raisers and local programs than national chains. Their owners spend profits close to home, while Starbucks’ corporate headquarters in Seattle tends to expect a hefty share of profits for itself.

There is, of course, nothing wrong with that. Corporations exist to make profit. But unlike the U.S. Supreme Court’s Citizens United ruling, I make a distinction between corporations and individuals. Individuals don’t exist for the will of corporations; it’s still the other way around, if only we individuals would keep that in mind.

We all still have options. Even though Wal-Mart insists that we’re idiots for shopping anywhere else, we can still choose to do so. And if we want to choose U.S. products over those made in China, India, Malaysia and wherever else, we need to choose independent businesses over corporations. Because independent merchants are more likely to buy from American sources.

If we want to choose U.S. employment over outsourcing to foreign lands, then we need to choose independent businesses over corporations. Because independent businesses are likely to hire most or all of their employees here at home, while corporations like Starbucks depend on international hiring to fuel their need to grow.

If we want to choose unique communities and walkable neighborhoods, then we need to choose independent businesses over corporations, because corporations favor high-traffic venues like strip malls and power centers over comfortable commercial districts like Coventry Village, where I live.

If we want to choose rugged individualism over bland sameness, we need to choose independent businesses over corporations. Because independent businesses look for unique products that will capture our attention, while corporations look for high-volume goods that can be promoted and sold through economies of scale.

If the entire population of of my home town would change its habits – moving just $100 a person in annual purchases from big chains like Starbucks and Wal-Mart and Home Depot to little stores like The Stone Oven, Zagara’s Marketplace and Heights Hardware, we will have matched the seed money that giant Starbucks has dedicated to its small business development fund.

And we will be richer for it, because we will have provided more money to local independent merchants to spend with the schools, clubs, institutions and other businesses where they live. Which happens to be here rather than Seattle.

However many jobs it creates in America this year, Starbucks will create more jobs overseas, because that’s where it can achieve the easiest growth.

And someday – probably before the year is over – the novelty of those ceramic mugs from East Liverpool, Ohio, will expire. People will stop buying them. Starbucks will stop selling them. Somewhere between 10 and 20 people will lose their mug-making jobs.

And then what?

How far will you go to save 15 cents on tuna fish?

I was at the grocery store the other day. It’s a small store, about 30,000 square feet – or less than a third the size of a typical grocery superstore these days. I like it because you can easily run in and out for just a couple items. And because they don’t make you swipe an affinity card to to get sale prices. And because the staff is abundant, helpful and outwardly friendly. And because they manage to stock the things that people in the neighborhood want to buy – even if they don’t have room to stock some of the more exotic items you might find in a 100,000-square-foot supercenter.

I was trying to decide on which tuna fish to buy – the old-fashioned round tin or the newfangled foil packet – when the woman next to me spoke up. She looked grandmotherly and, like me, she had about five items in her hand-held shopping basket.

“The tuna is expensive here,” she said. “But with gas prices being what they are, I can’t decide if it’s worth the drive to Wal-Mart.”

I hesitated. Despite my own strong feelings about buying local I try not to get into people’s faces over it. But she did raise the question directly.

“No,” I replied. “You should pay the extra 15 cents here and feel good about supporting a local merchant who really cares about our quality of life.”

She tilted her head and we made eye contact. She nodded and picked up two cans of tuna – the old-fashioned kind packed in spring water – and headed to the checkout.

One day at a time. One small victory at a time.

The local hardware store has closed

I originally posted this on May 26, 2011 at the Heights Observer blog. It still seems relevant.

***

Retail shops come and go. To me, Seitz-Agin is more than a store; it’s part of the fabric of my life and writing this post feels like the presentation of a eulogy.

I’m pretty sure that sentiment will make Joel Borwick, the store’s owner for the last 38 years, uncomfortable – though that’s not what’s intended.

I remember the store since before Joel bought it. My dad used to take me there what seemed like every Saturday; when he was working on a project it might be several times per Saturday. Norm would talk to me in a Donald Duck voice, and my dad would give me money for the gumball machine.

Having a store account didn’t seem quaint back then; it’s just the way stores did business. In 1990, when I bought a house here, establishing my own account at Seitz-Agin felt like a second bar mitzvah. Right up until May 21, 2011  – when the store accounts were closed out – whoever wrote up my purchase could recite my name and ask, “Is that Fairmount or Cedar?”

Not that it mattered. At least once a year, my bill would get sent to my parents’ house on Fairmount. They’d walk it over to me at the first opportunity.

Seitz-Agin is part of my own kids’ lives too. As toddlers, all three of them knew that a trip to the hardware store meant the chance to choose a bag of candy and open it right there at the counter – dutifully sharing it with whichever of the guys happened to be helping us. Sometimes they’d charge for the candy; often they’d “forget.”

In my mind, I have the most vivid image of one of my twin daughters, age 3 or so, placing an apple-flavored jelly ring into Joel’s giant palm. It’s the kind of everyday moment I wish I’d thought to capture with a camera.

The inventory began to dwindle several years ago, but not critically so. The store still had most of the stuff I needed to keep up my 1927 home; and anything that wasn’t in stock could easily be ordered with the promise, “We’ll have it Wednesday afternoon.” That, as everybody knew, is when the weekly shipment came in from the distribution center.

But eventually, my observations about the inventory affected my buying habits. A couple years ago I needed concrete sealer for the driveway. I probably needed two 5-gallon cans, but hoped to get away with just one. Rather than order two from Seitz-Agin and return one (sticking them with a $60 item that nobody else would buy), I ordered a single can. And when it ran out before finishing the job, I ran to Home Depot to pick up more (which, I noted, was a different package size and cost more per gallon – typical of the way big boxes create the perception of a better deal than you’re actually getting). I wonder which would have actually been better for the business.

When I lost my job in 2009, it had a direct impact on Seitz-Agin. Rather than fall behind in paying my monthly bill and forcing a friendly merchant to be the bank, I cut way back on using the store charge – which means I spent less money. I’m guessing I’m not alone in this. I also suppose a number of people did keep using their house accounts even though they couldn’t pay on time. I wonder which is worse for the future of a small, independent merchant.

Late last year, I was looking for something the store didn’t have in stock. I asked, “Can you have it for me Wednesday?” The person helping me – I think it was either Bill or Norm – said, “We don’t have a regular Wednesday shipment.”

It was as if I’d just learned a dear friend had entered hospice care – which turns out to be a fairly accurate simile.

I’ve always been fascinated by retail, and I may have developed a sixth sense about such things. But when people started talking in April about the bare shelves at Seitz-Agin, I felt as if they were noticing something I’d been monitoring for years.

One good friend just sent me a note saying that Seitz-Agin should have adjusted its business over the years, with evening and Sunday hours. It’s hard to deny the sense of this suggestion. Joel wasn’t oblivious to this option; over the years I asked about it a couple times and he always seemed comfortable that it wasn’t the answer. He said none of the guys really wanted to work on Sunday, and the revenue wasn’t likely to cover the cost of opening.

The last time I talked to Joel about the store’s health was shortly after I learned that the weekly deliveries had been curtailed. He told me that he felt he had survived the impact of Home Depot.

But what he wasn’t sure he could survive is a change he observed in his customers. They just weren’t making repairs anymore the way my father did and the way I do. They had stopped calling for referrals to plumbers and plasterers and furnace guys – old-home experts who bought their supplies from Seitz-Agin.

But I know houses still need to be mainteaned and repaired. Maybe Joel has misread it. Perhaps people are finding their experts through Angie’s List on the internet. Or using Home Depot’s growing installation and repair business. Maybe the big box really has done in Seitz-Agin.

Or, perhaps people really have changed.

Not that it matters. What’s done is done. I’ll start going to Heights Hardware on Coventry – the last independent hardware store in Cleveland Heights, and a business that has been here 50% longer than Seitz-Agin itself.

It won’t be the same because my dad never gave me money for the gumball machine at Heights Hardware. And I never had the pleasure of walking into that store with one of my own toddlers (the last of which is now a teenager with attitude) on my shoulders.

That may be what I’m reacting to most about the closing of Seitz-Agin. It may have less to do with the store than it does the revelation to me – not for the first time – of my own mortality. If more people felt the way I feel, then Seitz-Agin would be thriving and Home Depot would be the one shutting its doors.

Time has passed Seitz-Agin by and I’m afraid I’m not far behind.

Shop local: It’ll make you rich

The NBC Today Show aired this story by correspondent Mike Leonard.

The message is simple: Shop with small, local, independent businesses whenever you can. You won’t necessarily pay more. But if you do, it’ll make you richer.

Visit msnbc.com for breaking news, world news, and news about the economy