Will The Last Customer Please Shut The Door?
Don’t use businesses as showrooms in order to make a purchase somewhere else. Allow your local merchants the dignity to make respectable livings.
All over America, we are losing countless mom-and-pop stores, delightful boutiques, small businesses and franchises. This is true in La Grange, La Grange Park, and within every community in Cook County and Illinois. Is the recessionary economy the culprit?
Unless you are the owner of one of those businesses, have a family relationship with a proprietor, or count a franchisee as a friend, you may think the demise of those businesses is a fault of management. It is easy to suppose that a business closure came about because of cash management problems, labor costs, inappropriate ordering of merchandise or some other facetious reason. Odds are the primary reason for the business failures can be attributed to a lack of supportive customers.
It has been shared with me that some shoppers that frequent our retailers are using businesses to check out their merchandise and then head home to order the exact item on the Internet. Apparently there are “shoppers” that reside in our regional and local communities that are asking many “buying” questions about clothes and styles, actually trying them on and then making their purchase at a cyber-business that pays no taxes to the village, or county, or state. Can you believe that?
In some instances, pretend buyers are asking for hands-on evaluations of their feet so that they can be perfectly fitted for running shoes. After about 45 minutes of hard work by the sales person, the non-buyer asks if the sales person will write all the information down for them. These “lookie loos” have no intention of shopping locally. They do intend to buy the same quality items from an Internet business that could care two spits about local issues or the need to pay for village services. Isn’t that rude?
There are loving grandparents that are frequenting area stores in search of the perfect baby outfits, christening dresses or darling dolls. They are asking the owner for their undivided attention, but when the owner of the shop is not looking or has a back turned, some effusive grandparents are using their cell phones to take a picture of the item and the bar-code so they can determine where they can buy the perfect baby gift for less. Doesn’t it seem appropriate to forcefully have these culprits removed from the store and be unceremoniously “kicked to the curb” or banned from ever re-entering the establishment?
If you think this is not happening – think again. Stories like these are becoming so rampant that such activities could change the dynamics of our communities and destroy the concept of small business and retailing. Why would anyone open a local business if they can’t assume honest local support? Do we only want restaurants and pizza purveyors to occupy our retail spaces?
Of course we all like bargains. Who doesn’t like to save some money? But, shouldn’t we have an allegiance to the local businesses that make up our commercial base? Shouldn’t we support those business risk takers that provide jobs, collect sales taxes, donate to our charities, put our posters in the windows and do so much for our villages? Shouldn’t we play fair?
In business, you really don’t make a net profit until the last week or days of the month. Whatever profits are earned in the earlier part of the month go towards rent, fees, labor costs, taxes, lights, heat or cooling, water bills, cleaning expenses, and the replacement of inventory. Major disruptions in sales may preclude that the business owners will earn much in the way of net profit. After few months or seasons of this, you and I might see another sign in the window that simply says, “Going out of business.” Will we chalk the failure up as cash flow problems, bad management or some other excuse?
As you walk around La Grange Park and La Grange, or any other community for that matter, you definitely have to be noticing that there are an inordinate amount of empty retail locations. The owners of the buildings are taking huge hits from the loss of rents—though they have to continue paying ever-increasing taxes.
Having fewer retailers, the villages and county are earning less sales tax revenue, and thus that obligation to pay more personal taxes falls upon the shoulders of the residents (that means you and your neighbors). By having empty shops there is less foot traffic and that has a detrimental effect on nearby businesses—thus lowering their opportunity to sell products and services and earn necessary profits. Before long, the death spiral widens and becomes more pronounced.
How we treat our retailers defines the type of downtown we will have for years to come. How often we frequent local businesses determines if the businesses will operate next year or not. How we spend our money is critical to having proprietors meet our needs. Without a doubt, the ball is in our court.
For the foreseeable future the Internet will be an option. Big box stores are here to stay, too. The same goes with the malls and catalogues. What is not apparent is if we will have commercially viable downtowns.
Please be a fair and honest customer. Don’t use businesses as showrooms in order to make a purchase somewhere else. Allow your local merchants the dignity to make respectable livings. Spend as much as you can close to where you live and within the communities that border your village or city.
Remember, about 65 percent of your shopping dollars stay in your town when you shop locally. Always keep in mind that none of your shopping dollars help your community pay bills and provide public services when you spend your money in cyberspace. How you shop may determine if the merchant’s door stays open or is closed for good.
Mouse
3:03 pm on Monday, February 21, 2011
You know why else local small retailers go out of business? The absolutely oppressive property tax system in Cook County. I own commercial property in La Grange and am not "connected" into the local political scene, so I pay 15% or more of the property's market value (that's not assessed value) each year in property taxes, and if it weren't for tax appeals every three years none of the small, local businesses who rent from me would be able to afford it. This ain't no gilded palace..and no money from the TIF well flows this far south so I even get to make up the difference for the downtown tax breaks...and we barely break even every year. I agree that shoppers should support their local businesses but there is much more going on than your article suggests.
Robert E. Ware
10:35 am on Tuesday, February 22, 2011
Mouse,
Thank you for bringing up the tax issue on commercial property.
To date I have seen one building owner's tax bill. In this one case, his taxes just about doubled with his new assessment. I doubt if his situation was unique. If he were to pass all of those taxes to his business tenants, he well might put them out of business. Then he would even worse off, as would the village.
Over time I will try to bring up a myriad of issues that affect businesses at all levels. I concur that there is much more going on than meets the eye.
For the time being, I would encourage everyone to remind government leaders and representatives (at all levels) that it is absolutely necessary to do everything reasonable to lower their operating costs.
The business property sector, as well as the residential property owners, cannot keep paying more and more in taxes.
Thanks for the note.
Bob
Megan
12:16 pm on Tuesday, February 22, 2011
Excellent article.
Laurie Whitman
4:05 pm on Wednesday, February 23, 2011
I am completely in agreement with supporting your local merchant. Yes, you may find things cheaper on the internet, but as you say, Bob, what good is that doing our community? Just a small example: every winter, I need a pair of YakTrax - the anti-slip device that fits on the bottom of your shoe, especially handy if you are walking a dog, especially is the dog chases squirrels and weighs 75 pounds. I have found them on the internet, I have found them at REI but I buy them at the Competitive Foot in Western Springs. The owners are neighbors of mine in La Grange Park and I prefer to give someone I know my money.
Insofar as the taxes, they are ridiculous, as everyone knows, both residential and business. In some cases for local businesses, the sales may be up but profitability is down due to exorbitant taxes. It has to change.....
Robert E. Ware
4:14 pm on Wednesday, May 4, 2011
I used the shoe repair on Hargrove - across from the station. He was polite, quick, and did a fine job. My wife is happy because she has a pair of shoes that are now in good repair. Not a big job, but every dollar at each merchant creates income and some village taxes.
Congratulations on remaining true to the statement of "shopping local" and spending close to home.
Dan Judd
10:00 pm on Wednesday, March 2, 2011
We're all renters now. When you figure you pay property taxes forever, at current levels of taxation and assuming a life expectancy of 80, we are fast closing in on the day when you will pay more in taxes than you do in principal and interest on a 30 year loan. The constitution guarantees personal property rights. It seems to me that local taxing authorities are in violation of the U.S. constitution.
Now the unfortunate truth is the major driver of costs are not programs for the needy but a massive bureacracy watching out for their own pay and pensions. Please don't bring up the schools either. Compensation costs have grown 70% faster than inflation in just the 10 past years. There is no way out unless we band together and cut the number of government workers, cut the pay of the remaining workers, and cut the pension promises across the board. Without drastic action you will watch your home values continue to drop as potential buyers have to price in 2%, 3% and more levels of property taxes going forward forever.
Dan Judd
Brendan Purkapile
9:59 am on Thursday, March 3, 2011
Government workers are not to blame, stop scapegoating them... Your numbers are not verifiable either. The problem is that Cook county has been mismanaged for dozens of years. The population of Cook county is dropping as well, meaning less property taxes and sales tax. The other fact is that an economic downturn disrupts the flow of taxes to government creating a problem in a bad economy. The root of all of our government's budget problems were taxes that were far too low in the good years, leaving us no rainy day fund in the bad years. The government has a right to tax you as they provide security so that someone doesn't just take your property by force. Everyone hates taxes, but really our tax levels are some of the lowest in the industrial world. Another thing that you don't mention is that there are so many loopholes of write offs that many individuals and corporations effectively don't pay their share of taxes.
Not entirely convinced
10:41 pm on Wednesday, March 30, 2011
Mr. Ware,
Your push for courtesy: spot on.
Your push for supporting local merchants: entirely off-mark.
I think, actually, you should write this same article to the businesses that you support, instead of to their end-users. It really sounds whiny to blame customer behavior.
To raise the attention of all the Patch readers:
*** the demise of every single merchant and business is completely and exhaustively the fault of the owner, if not also the management.
I agree with what you quote above, that their demise most certainly is not because of "...a business closure [which] came about because of cash management problems, labor costs, inappropriate ordering of merchandise or some other facetious reason. "
However, your own words prove that management causes their own failure, when you said "Odds are the primary reason for the business failures can be attributed to a lack of supportive customers."
The problem is, if only it wasn't true that supportive customers are born from good management.
And there's the rub, Mr. Ware, and it is why this article makes me feel upside-down.
Here are nine reasons why, each in three parts a, b & c:
Not entirely convinced
10:43 pm on Wednesday, March 30, 2011
1.
a. Your statement) Accurately, you describe “lookie loos”. These customers should be fined, kicked out, and banned from stores: those people who abuse physical stores and then are "...making their purchase at a cyber-business that pays no taxes to the village, or county, or state."
b. Management's failure) Management must determine the customer drivers that cause this behavior, and create an environment where this is practically disallowed, or create an unbearably strong sense of loyalty or guilt.
c. Suggested Chamber response) Teach your merchants how to create climates in their stores to minimize this behavior.
2.
a. Your statement) It's "rude" behavior.
b. Management's failure) Management didn't make its customers think it was rude, and even more so, they did not increase loyalty or ask customers to be the guardian against rudeness by making them feel like they are part of a team to save the town, the district, the Chamber, the earth...whatever.
c. Suggested Chamber response) Same as #1c, above.
Not entirely convinced
10:44 pm on Wednesday, March 30, 2011
3.
a. Your statement) Regarding grandparents who take cell phone photos in stores, "...to forcefully have these culprits removed from the store and be unceremoniously 'kicked to the curb' ". An interesting image.
b. Management's failure) Management has allowed a complete lack of meaningful unique value for buying that item, right then and there, from that store & no where else. Unless it's different than can be found online, it is irrational to think many customers will buy from your more expensive store, just because.
c. Suggested Chamber response) Teach your members what unique value is, and how it can be added to their brick & mortar storefronts.
4.
a. Your statement) Local businesses should assume "honest local support"
b. Management's failure) If this is in your business plan, the bank should not have lent you the money and should demand it be returned. If this is in your business plan, then you should be more loudly going to the Village of LG, your Chamber and the LGBA to push much harder the urgency of "honest local support" to save something (see #2b).
c. Suggested Chamber response) Become devoid of the belief that local loyalty will save anyone's business, and instead drive home the external environmental initiatives that build the right base of customers.
Not entirely convinced
10:46 pm on Wednesday, March 30, 2011
5.
a. Your statement) "Shouldn't we play fair?"
b. Management failure) Whining about not playing fair, instead of spending all that energy on how to attract more business that matches or disrupts "bargain" behavior, and that is different and special when compared to "bargains" elsewhere, thereby making them no longer bargains elsewhere, resulting in a broad presentation of bargains right here in town.
c. Suggested Chamber response) Put on trial the management response to customer behavior, not any aspect of the customer.
6.
a. Your statement) "Will we chalk the failure up as cash flow problems, bad management or some other excuse?"
b. Management failure) It's someone else's fault that I went out of business.
c. Suggested Chamber response) Encourage new and innovative ideas in your members which drive diversified products/services, unique value, anti-big box approach, and local bargain building (possibly with co-branded partnerships).
7.
a. Your statement) "Having fewer retailers, the villages and county are earning less sales tax revenue,.."
b. Management failure) People really understand that their taxes will go up if I don't survive!
c. Suggested Chamber response) Educate your base of end-users at every opportunity, and be specific rather than vague about the ~$22M (example) of sales tax revenue at stake, and whether or not it offsets the Village's requirement to keep up the business district.
Not entirely convinced
10:48 pm on Wednesday, March 30, 2011
8.
a. Your statement) "How we treat our retailers defines the type of downtown we will have for years to come."
b. Management failure) People don't know what they are at risk of losing, nor for how long.
c. Suggested Chamber response) Advocate frequently to the Village and business associations what is at risk, and get them to communicate it to their networks including end-users.
9.
a. Your statement) "Remember, about 65 percent of your shopping dollars stay in your town when you shop locally. "
b. Management failure) Does management actually think that people strongly believe this? Do business think that people don't realize that they buy things for their business that come from internet wholesalers? Go in to any business, and you will find suppliers to those businesses who, in Bob's own words, "...could care two spits..." about the local economy that the business is apparently trying to support.
c. Suggested Chamber response) Create enthusiasm and specific, memorable case examples of how a LG Park business is supporting this or that, locally.
I'm sure to everyone's surprise, I love my local businesses, and I regularly encourage their support. What should come across is that I do not at all believe it is the customer's fault when things fail.