Tuesday, March 11, 2008

Sinister Phase 2

I recently referred to The Onion's joke about Starbucks instituting a sinister "Phase 2" of their operations, but what if it's no joke? What if ALL the chains are entering Phase 2?

Racked reports that Starbucks will not be expanding into Long Island City--perhaps expansion into the outer boroughs will be halted as Starbucks pulls back across the country.

Barnes and Noble has not only rescinded their liberal returns policy, they are also closing down shops in town, at least the one at Astor Place and one in Chelsea.

Another recent story from Crain's says the bank branch expansion has ended and even "Duane Reade is closing dud spaces."

North Fork becomes Capital One

We might take these phenomena as hopeful signs that the unbridled multiplication of chains has reached its limit and that the pendulum is swinging back. But let's not be too optimistic. We know that the plan all along has been: (1.) open as many locations as possible, thereby putting the competition out of business, and then, once the mom-and-pops are dead and buried, (2.) shut down those unprofitable stores and continue to thrive in a competition-free zone.

Hence, Phase 2.

Phase 1 was all about creating desire in the consumer, convincing people they "need" Starbucks, Duane Reade, Barnes & Noble, etc. They provided convenience and ease with many locations, low prices, and liberal policies on returns. They're like the drug dealer who gives you your first taste for free. Once you're hooked, the rules change. So keep your eyes open now--watch out for rising prices, increasingly stringent policies, more locations shutting down.

Pinkberry forbids peeing and pictures

What will be left? To use another metaphor, it's like when an obese person loses a lot of weight in a short amount of time--what's left is a stretched-out balloon of empty skin. Empty storefronts abound. But they won't stay empty for long.

Of course it's impossible for those mom-and-pops to move back in, or for new small businesses to take their place. What's coming are more chains. As the Crain's article says: “'Now starts the retraction.' Retail brokers are jumping at the chance to get clients like Steve Madden or American Apparel into any of the spaces banks abandon."

Call me a paranoid conspiracy theorist, but I think the corporate chains are all in cahoots with each other. It's the Art of War. Look at how the banks helped the big retailers, acting like a panzer division rolling in to clear the way. It was Blitzkrieg. It was Shock and Awe. Now the retail chains will hold the position, sharing territory with their allies to fend off smaller would-be competitors, aka "the enemy."

What if all we're seeing now are those tanks rolling away--their firepower no longer necessary in a defeated, crippled city held solidly by the occupying force?


ShatteredMonocle said...

I read that Starbucks currently has about 25 locations in Brooklyn and they are expecting to have 100 within 3 years. So I guess part of phase 2 includes sending the tanks to the outer boroughs.

L'Emmerdeur said...

What you are seeing is the first moments of the pendulum swinging the other way.

This economy is about to get crushed like a Pinto in a junkyard. Few will get out alive.

None of them will be banks.

Anonymous said...

I don't know, unfortunately I fear JM's theory may not be so far-fetched. While the condo boom reeks of over speculation, companies like Starbucks arn't stupid; their location decisions not impetuous get-rich-quick schemes.

Anonymous said...

Will someone please do something about this? STOP GOING TO THESE DAMNED CHAIN STORES PEOPLE!

What are you all a bunch of freakin' ROBOTS?

GREEDY CORPORATIONS pushing out the little guys. NOT FAIR.

We don't want this in our city.
People want to have purpose in life, and identity. Some find it in the businesses they build!

Their dreams become shattered when these GREEDY CORPORATE CHAINS take control and push their dope on us.


Anonymous said...

people do like chain stores. thats why they multiply. i myself prefer small businesses. JN: what they CAN do is rent to many small business, in the larger spaces! like you see in a convention center. like boutiques. response to anon 1:42am: i use one of those chains you mentioned, or rather order from the web-sight. "american apparel" had some items which were ok price, good fit, cotton, & i did buy multiples. also i went to "H&M" once & found some tee shirts, all cotton. i am very difficult to fit, so i have to do what ever. let me say H&M went down the tubes, as a few months later the stuff was really cheapened. this was about 8years ago. i never heard of those other chains, except for starbucks. usually chain resturants are not acceptable. unfortunatly most new yorkers are going to chains. & if there is little alternative what should they do? p.s. you forgot to mention "whole foods" which i cannot stand.