Kevin M Leydon: NUIG


Why local shops are important to local communities:
Professor Kevin M. Leyden and Richard Silke, PhD

Candidate, School of Political Science and Sociology, NUI Galway.
Presentation given at “Rural Community Retail Conference, Thurles, Ireland. March 21st 2014.

This presentation focuses on three key themes:
1. That community is important to people;
2. Public policy and land-use planning affect the vitality of our communities;
3. Local shops – within a short walking distance – are necessary for a community to remain socially and economically viable.

Community is formed through the connections we have with each other and the places where we live. Comprehensive studies have consistently shown the importance of social support for our health and well-being. A lack of social networks and support has been linked with an increased risk of death from heart disease, circulatory disease and cancer (Berkmann and Glass 2000). When we live in vibrant and healthy communities the social networks and support form naturally over time as we ‘bump into’ each other on the street or nod in acknowledgement of a familiar face. These casual day-to-day connections form the foundation of community helping to relieve loneliness, stress, provides us with psychological support and are important for our general well-being.

A connection to ‘place’ is also important for community. We like to feel that we are from somewhere that is interesting and unique. It provides us with a sense of security and identity. Connections with place are built through the landscape, the architecture and the aesthetics of an area. The neighbourhood and the people in our community also contribute to a sense of place in the stories, experiences and activities associated with it. Over time connections to place and the social support in a healthy community forms bonds of reciprocity and, crucially, trust in each other. Robert Putnam in his book Bowling Alone (2000) describes this public respect, reciprocity and trust as “Social Capital”.

Writing in 1961, Jane Jacobs in her book The Death and Life of Great American Cities describes how trust builds on a healthy street:   “The trust of a city street is formed over time from many, many little public sidewalk contacts. It grows out of people stopping by at the bar for a beer, getting advice from the grocer and giving advice to the news-stand man, comparing opinions with other customers at the bakery and nodding hello to the two boys drinking pop on the stoop … hearing about a job from the hardware man and borrowing a dollar from the druggist … Most of it is ostensibly utterly trivial, but the sum is not trivial at all. The sum of such casual, public contact at a local level – most of it fortuitous, most of it associated with errands … is a feeling for the public identity of people, a web of public respect and trust (p.67)”   What Jacobs is describing in this passage is how a healthy retail element is crucial to the building up of trust and mutual respect in a community. Living in areas where we can easily walk to get our daily needs brings people together on the street and mutual bonds of trust and caring form over time. A vibrant neighbourhood provides places where people can gather to relax, to get away from the concerns of ‘work’ and ‘family’. They can be the local pub, the local shop, the church, a community centre or park and public squares. These foster an element of civic pride and a sense of belonging to a support network in times of need.  However, Jane Jacobs was writing fifty years ago. Putnam (2000) found that over the last quarter century levels of social capital are in decline.We now sign fewer petitions, belong to fewer organisations that meet, know our neighbours less, meet with friends less frequently, and even socialise with our families less. Perhaps the most whimsical example Putnam describes is that, although the number of people going bowling has increased, the number of bowling teams has decreased. We are now bowling alone.
Although a sense of community arises spontaneously it doesn’t just happen. The vitality of our communities is affected by public policy and planning. We used to plan and build neighbourhoods that were attractive, relatively quiet and close to the heart of things. We could walk to get our daily needs, making multiple stops and meeting people along the way. Over the course of the last fifty years or so we began to build a different type of area. Planning became the domain of profit-driven developers and became oriented around roads for the automobile, not streets for people. It became increasingly difficult, and dangerous, to walk or cycle to destinations as our communities became spread out creating sprawl. As opposed to stopping in a grocer, a butcher and a baker we became obliged to drive to multi-national supermarkets. When the emphasis is placed on ease of travel for cars, as opposed to people, the large supermarkets will benefit. Once a local population comes to rely on car travel for either shopping or work, it tends to increase their usage of and dependency on more distant locations and thus it also increases the likelihood that other services will be lost to local communities.Out-of-town shopping centres become the norm and the small neighbourhood greengrocer witnesses his trade being vacuumed out to car-dependent suburbs.When the emphasis is placed on ease of travel for pedestrians a level playing is created for both large and small shops.

The move away from compact self-reliant neighbourhoods to sprawl has led to dramatic changes in Ireland’s retail landscape over the course of the last forty years. We have seen a serious decline in the number of small independent grocers along with a significant growth in the number of large corporate supermarkets. It is estimated that the number of grocery outlets operating in Ireland has reduced by 54% since 1977. That equates to thirteen shops shutting their doors every week.There is no doubt that the hardest hit segment of the grocery market is the independent retailer. According to the Joint Committee on Enterprise, Trade and Employment (2011), independent shops declined by 64% between 1977 and 2006. In this same period large corporate supermarkets increased their numbers by 170% (Fig 1).

Fig 1: Source: Joint Committee on Enterprise, Trade and Innovation (2011) Matters concerning the retail trade in Ireland, 12th report, Dublin: House of the Oireachtas, p.42

We have now reached a point in Ireland where over 74% of the grocery market is controlled by just three companies: Tesco, Supervalu and Dunnes Stores. If we were to include the smaller, but rapidly growing, Aldi and Lidl almost 90% of our grocery choice is provided by only five large corporations (Fig 2): Indeed, this figure is actually higher when considered that Supervalu, owned by Musgraves, also own the brand of convenience stores Centra.

Tesco 26.4%
Supervalu 25.3%
Dunnes Stores 22.4%
Aldi 7.5%
Lidl 7%
Total 88.6%
Fig 2: Source: Kantar Worldpanel (2014) Supervalu becomes Ireland’s second largest supermarket [online] available at: accessed: 19/3/14

This has left us with the second highest level of market concentration in Europe. Only Sweden has fewer shops to choose from. This lack of choice has significant implications for the health of both our society and economy while also reducing competition. Many small shops can compete with each other but cannot compete against a multi-national supermarket. For suppliers, not being listed with a single multiple means they will lose 20% of their potential market while being listed can be a double-edged sword as it can place them in a dependent and vulnerable position to the demands of supermarket intent on forcing margins down.

What we are losing on our high streets is a sense of distinctiveness, uniqueness and the colour independent traders bring to our communities as our streets become increasingly uniform behind the familiar logos of big brands. Local craft production is being stifled as it is the independent trader who is prepared to give a small local producer an opportunity to sell their produce. Traditional, local varieties of fruit and vegetables are dying out as the multiples global supply chains make it more efficient (for them) to import as opposed to sourcing locally grown produce.

The services provided by an independent retailer can be grouped under three key themes:
1. Gathering
2. Customising
3. Multiplying

Local shops can become the focal point for a community. Places where you bump into your neighbours, exchange local news, chat about the weather or discuss local issues. For the elderly or those living alone this social interaction is invaluable. The independent shop is better positioned to respond flexibly to the individual and particular needs of the local community. Every area and community is different and a remotely controlled supermarket answerable to head office and shareholders cannot make distinctions between types of customers to the same extent as a greengrocer living and working in the community. Product lines carried by a multiple supermarket are dictated by central head-quarters instead of the retailer.

The independent retailer brings with them a sense of difference to an area. They are all unique, often quirky, giving a neighbourhood vibrancy and colour. This is important in creating a feeling of pride and identity to a place. Responding flexibly to their community’s needs their service can be personalised as they listen to their customers and respond accordingly. Many of the most successful independent have specialised their product range in response to the threat from supermarkets adding further to their uniqueness. They become a testing ground for local innovation and craft production giving many producers a first opportunity to sell their wares.

The multiplying functions of an independent can be categorised into social and economic. Social multipliers are positive social interactions that can serve to influence more positive behaviours within a community. Economic multipliers are based on the fact that an increase in spending can produce a benefit greater than the initial amount spent. The independent retailer is based in an area, often lives there, and spends their earnings within the area.

There are a variety of ways local shops perform a social function. They are often the only store available. As supermarkets have vacuumed trade out of an area many of our inner city neighbourhoods have been left with a limited supply of fresh, easily accessible, food. Bright, colourful shops on a street create a sense of security in an area. They are vital for the disadvantaged in our society. For the disabled, the elderly and the carless they enable independence allowing us to age in place. Their role as a neighbourhood’s focal point helps to create emotional connections in a friendly environment.

Small local shops have an economic multiplier effect as they use local solicitors, accountants and web designers. They advertise in local media as opposed to national media. Profit tends to stay in the area while the corporate supermarket pays dividends to shareholders. Crucially, the local shop has been the first job for many young people. It has been estimated that up to 52% of a local shops revenue is recirculated in the local economy compared to only 13.6% of a national chain’s revenue is recirculated (Civic Economics 2004).

Additionally, the slick marketing campaigns of multi-nationals disguise the fact that they are not always cheaper than your local shop. Loss-leaders draw you in but the necessity to buy in pre-packaged quantities often leads to food waste and greater expense. This price discrepancy is further emphasised when the local retail is owned by the community (Fig 3).

Figure 3: Source: Freathy, P. & Hare, C. (2004) Retailing in the voluntary sector: The role of the Scottish food co-operative, European Journal of Marketing, 38(11/12), pp. 1562-1576.

To conclude, Local shops are important to local communities. They offer a service for many that cannot be replicated by multi-national chains. Their importance should not be underestimated and our policy-makers should recognise the role they play and support them through planning guidelines and policy. There needs to be a level playing field for both the big-box superstore and the unique local retailer. Current land-use planning disadvantages the local shop as their custom drives by. Human beings are social beings that flourish in a healthy community and local shops are a key component to community and all of the benefits gained from living in a dense web of social connections fostered by the local shop.