Meditations on a Local Economic Emergency By Austen Givens

Meditations on a Local Economic Emergency By Austen Givens

The collapse of the Mohawk Valley retail sector may prove to be The Great Local Story of 2017.

Area stores appear to folding at an alarming—and accelerating—pace. During the past 18 months or so, I’ve observed that The Village Toy Shop, Hallmark (two locations—both in New Hartford); Gander Mountain, a large sporting goods store off of Commercial Drive; Sears; Gap; and Kmart have closed or announced plans to shut their doors. Slowdowns in the broader retail sector potentially threaten Macy’s and J.C. Penney, both of which are considered “anchor” stores at Sangertown Mall. Barnes & Noble and Best Buy are experiencing financial turbulence nationally, and their presence in the Utica area is also potentially in jeopardy. So what is going on here?

These closures, in one sense, reflect a broader reduction in foot traffic to brick and mortar stores nationally. Online shopping is swallowing retail whole. This means that physical stores suffer from lost sales. For franchise-style businesses, this trend means weakened standing in the eyes of their corporate masters.

But this explanation is not entirely satisfactory.

An extensive 2011 Cornell University study makes clear that New York—and especially Central New York—is hemorrhaging people. Those that continue to call upstate New York home are getting older, too.  This means that the declining, aging local population places fewer demands on the market in general. So the business environment doesn’t have the same pull that it once did from local consumers.

None of this is to suggest that new businesses might not come to occupy these abandoned storefronts. But, to quote the French poet Paul Valery, “The trouble with our times is that the future is not what it used to be.” Local elected officials cannot continue to pretend that this problem does not exist. There is a compelling need to offer bold proposals to arrest the decline of the local retail market. Local jobs, and the local quality of life, depend on it.

Here are three quick proposals for local elected leaders to consider:

·       Create islands of economic growth – Though experimental, nations like Japan have tinkered with creating geographically-bounded tax incentives in areas where local leaders desire economic growth. Identifying areas within local municipalities that need greater economic activity, and offering unique financial incentives (e.g. tax breaks, help securing low-interest loans) for businesses to set up shop, could help to draw new tenants.

·       Make “shop local” a local government priority – To date, the “shop local” movement has largely been driven by merchants. That needs to change. Local government councils and boards should embrace the “shop local” movement as a way to boost local business activity. Cross-promotion of “shop local” initiatives with local businesses and area Chambers of Commerce would be an excellent starting point.

·       Encourage local businesses to quietly “price match” online offerings – This is admittedly a tough sell. It stands to put pressure on already thin margins at local businesses. But the truth of the matter is that people shop online for price and convenience. Nothing beats having a package show up on your doorstep. However, it’s worth betting that area residents care enough about the future of central New York to lightly inconvenience themselves, drive to an area store, show a printout of a good they’ve seen online, and ask the question: “Can you match this?” I may be overly optimistic, but I am willing to wager that many—perhaps most—area business owners would happily oblige. Their survival may depend on it.

 

Austen D. Givens is Assistant Professor of Cybersecurity at Utica College.

 

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