The pros and cons of big retail

Chang Noi has three options for buying beer.
The corner shop is closest. The owner's son is usually doing his homework and appreciates a bit of help. His granny is seated in the corner, glued to the TV, spitting curses whenever Thaksin appears on the screen. A little political chat passes the time. The price is reasonable and unchanging. If you forget your wallet, you can pay tomorrow. But this family needs its sleep. Later it has to be 7-Eleven. The price is Bt2 higher per bottle, but occasionally a lot cheaper on promotion. The human contact is empty. The ritual patter is always the same. The shop attendants' uniforms are constant, but the faces change every few weeks. For a party, it's worth going down the road to Big-C. The price is much better, and the variety wider. But any savings are lost to other temptations that line the aisles. The human contact is mechanical and mute. The car park attendants, doormen and checkout girls could all be dumb. The attraction is the sheer drama of visiting this temple of consumption, where so much is available. The battle over big retail has broken out again after a three-year armistice. The megastores are fast replacing mega-dams in the demonology of development, in part because they have much in common. They are big. They are ugly lumps of concrete. They disrupt the livelihoods of lots of little people. But at the same time they bring major benefits to others. The difference is that the opposition to big retail has a nationalist streak. This happened because the foreign retail chains seized on Thailand's 1997 crisis with brilliant opportunism. They bought up their bankrupted Thai partners and competitors for a song. They acquired land when prices slumped and owners were desperate to sell. They expanded at a sprint when government was desperate for investment inflows and had no interest in imposing controls. It happened at amazing speed. In just a handful of years, Thailand became the second largest overseas market for Tesco, surpassed only by Korea, another crisis-struck country. Thaksin exploited the nationalist reaction to the megastore invasion for political gain. He promised to impose controls as part of his general promise to defend and revive Thai business. When he abandoned that policy on grounds that it might prejudice foreign investment, it was an axial moment of his first term, revealing how much of his early promises were mere posturing. But nationalism is only part of the issue. There are still Thai companies involved in big retail as both partners and players, and they don't act any differently from the foreign ones. Local businessmen scrambled over one another to sell land to the megastores. Local chambers of commerce in several provinces gave them warm welcomes. Then there is the efficiency issue. The number of consumers who benefit from lower prices is many times more than the number of business people who lose out. Shoppers have voted with their feet and their wallets. The openings of new megastores in the provinces have all the razzmatazz of a festival. Some local businessmen on the losing end have confessed that they "exploited people too much" in the past and got what they deserved. But the efficiency argument, much beloved by the megastores themselves, is not quite as simple as it looks. The benefits conveyed into the pockets of consumers by lower prices have been chiselled out of the livelihoods of corner shopkeepers, transport companies and wholesalers. In the countries where the megastores come from, the rise of big retail was a long, gradual process extending over a generation. Here it happened in a few years. There was no time to adjust. The shopkeepers, wholesalers and truckers might be "less efficient", but they had little chance against competitors who arrived with systems honed by a generation of use, and all the serious development costs already written off. Is it not a legitimate government role to ease such a jolting transition? Moreover, does big retail pay its social costs? Immobilised in the traffic on Rama IV Road, Chang Noi often wishes to charge the two megastores for the extra lost time, using their managing directors' salaries to calculate a rate per minute. Think of that sum multiplied by every car on Rama IV. Think of the cost in terms of roads, policemen and pollution incurred as a result of the unregulated surrendering of locations for new stores. In a few provinces, the local people fought back. In Phrae, the Chamber of Commerce organised training and advice for local shopkeepers to upgrade their services. They persuaded local newspapers and radio stations to help with a campaign to "cooperate to return the profit to Phrae people". They encouraged shopkeepers to take a bigger role in the local community to build social bonds. In 2003, 90 shops ran a joint raffle promotion that was so successful in clawing business back from the megastores that the next year 150 shops joined in a far bigger campaign. The Phrae resistance was a mixture of fighting big retail on its own marketing grounds and drawing on local feelings. In Chumphon, a consortium of local business and political leaders drew up a zoning plan that successfully excluded megastores from areas where they would be most damaging to both business and environment. The retail battle has revived because the emperor now has not a shred of clothing left and grasps at even the most threadbare nationalist fig leaf. But neither nationalism nor "efficiency" are good ways to decide this issue bluntly. The issue is what kind of townscapes are being created for the future. Big retail brings real price benefits. Convenience stores deliver the convenience they promise. Corner shops help create community. Getting the right balance is the key, and that's a social choice. Here, this won't be decided by planning, but by politics. Time to buy some beer.
Chang noi
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