Major Retail Chains Threaten Local Business

Students may have noticed lately that new chain stores have been cropping up all over Logan. Locals are divided on the issue of whether they are beneficial to the community or a threat to smaller businesses.

Nevin Limburg, director of economic development for the city of Logan, said the big retailers coming into Logan are a great benefit to the local economy.

"We've had so many [chains] come into the valley lately because people want them," Limburg said. "There has been evidence of sales leaving the valley for [chain stores]. But with quality standards on the big boxes, sales are staying in town."

Limburg said chain stores are interested in coming to Logan because the city puts them in good locations, but Logan has more strict and tight development standards than other areas of the state. A lot of citizens don't want the kind of urban sprawl that takes place in bigger cities, he said.

The city tries to make sure the buildings and grounds of local chain stores look better than their stores in other areas. Limburg said the layouts and landscapings of Home Depot and Lowe's are especially well done. When Sam's Club decided to come to Logan, the city asked them to build a store different than the one in Ogden. Limburg said the landscaping and architecture for the store in Logan is much prettier.

"We have a quality community that cares about how things look," he said.

There is a myth that the city spends a lot of money on incentives to get chain stores to come into the valley, Limburg said. Home Depot, however, didn't get any incentives from the city even though they repeatedly asked for money to come to Logan. Sam's Club also didn't get any money to come to Logan. All they required was that a road near their store be completed. The city complied because it was already in the master plan to finish the road. Sam's Club's retailer also helped pay for the cost of the road.

Limburg said that in July of 2000, the city estimated that $41 million would leave the valley annually by 2005 for grocery purchases made elsewhere if residents continued to travel to buy groceries. However, Logan now has a Sam's Club and Wal-Mart, and people in Logan choose to shop there instead of leaving the valley.

Chain stores provide the city with goods and services residents want and more jobs for locals, Limburg said. When large chain stores move into Logan, people are hired to fill both managerial and retailer positions. Managerial positions create primary jobs, or jobs that provide principal support for a family. Retailer jobs provide a second income for a family or help college students to support themselves. Sam's Club had 5,000 applicants for their job openings.

Chain stores also help the local economy by increasing the tax base. The municipalities collect a sales tax, or a certain percentage from each sale, from local businesses. The more sales a store has, the more taxes the city can collect.

"The city can then use that money to provide more services for the citizens. Schools get 60 percent of any property tax in the county," Limburg said.

For small business owners, chains can be a threat. Sue Fuhriman, owner of Fuhriman's Framing on Main Street, said the new Michael's is taking business away from her shop and other framing businesses around the valley. She said the problem with any kind of national chain is that it has massive resources for buying, marketing and advertising.

"They offer 50-percent-off coupons, and it suckers people in. My shop can frame art at a much cheaper price than Michael's, even with the coupon. People aren't aware of this fact, however, because Michael's has such a huge budget to advertise and people think they are getting a great bargain," Fuhriman said.

She also said another problem with chain stores is that they often buy their merchandise from suppliers outside the local area. Much of the money spent at the chain stores isn't put back into the community.

"Their buildings are ugly. They aren't part of the urban fabric," Fuhriman said.

By Erin Anderson
Photo illustration by John Zsiray