INDEX - ECONOMIC
www.islandbreath.org ID# 0605-09
SUBJECT: BIG BOXING OF AMERICA
SOURCE: JUAN WILSON email@example.com
POSTED: 19 November 2006 - 12:30pm HST
Kauaifornia: Big Box Central
Kukui Grove Mall has become the epicenter of Big Box store construction on the Garden Island
by Juan Wilson on 19 November 2006
Now that Costco has opened it is clear that many on Kauai feel that Big Box stores are the right thing for our island. Costco is not the first, but it is the biggest and latest to be built on Grove Farms land in the Puhi area. In fact, with the exception of the nearby Walmart, all the Big Box outlets are in the area centered on the Kukui Grove shopping mall. It is becoming clear that as this area develops it is becoming the location that all Kauai residents must go to to shop.
The Coconut Marketplace was once a place for residents to shop, but is now focused almost exclusively on the visitor market. There is of course the strip development between Waipoli and Kapaa along the Kuhio Highway. The strip offers two major supermarkets (Foodland and Safeway) and a host of ancillary business that serve local residents, but it does not have the Big Box national brands like K-Mart, Sears, Home Depot, Costco, Macys etc.
The trend towards centralizing the Big Box stores is not likely to slacken. A critical mass seems to have been reached in the Kukui Grove Mall area. Now it is the only nationally branded bookstore, toy store, department store, wholesale outlet, building material supplier, etc.
The operating philosophy seems to be "if you build it, they will come". This has added to another growing phenomena on Kauai - traffic. Of course there are many reasons for traffic congestion on Kauai. Work, errands, school, and after school activities are all part of the problem. But certainly, the centralization of shopping in and around Kukui Grove is increasingly compounding the problems associated with traffic.
The Big Box stores are dependent on an economy that may be short lived. That economy requires a housing boom fueled by cheap oil and supported by continuous growing consumption. It is my opinion that the hangover from the Bush years will be an economic depression that will be deepened by ever increasing energy costs and insurmountable debt that will lay waste to American consumerism as we know it.
The Big Box explosion in America is a new one. It follows closely on the development of large tract subdivisions far away from what were once central cities. Modern suburbia really got going in 1946, after World War Two. It was driven by relocation of veterans to new suburbs where there were jobs in aerospace and other defense industry corporations that were retooling for the oncoming consumerism that would drive the economy to this day.
I grew up in one such suburb, Levittown, Long Island, New York. In about five years ten of thousands of Levitt houses were built on what had been several thousand acres of potato fields. The jobs were at Grumman, Fairchild Electric, Republic Aviation, Sperry-Rand and other defense contractors. At first there was no place to shop. The plazas and strips had not yet been built. As a result many entrepreneurs began to service thousands of new customers. There was daily delivery of milk, eggs, orange juice and even bacon by the dairy truck. The bakery truck drove by every home on a daily basis. There were grocers pulling pushcarts behind their trucks and even knife sharpeners and shoe repair trucks roaming the street of Levittown.
This truck-to-door service lasted a short while after the supermarkets and plazas started to come in. That is because almost every household in 1950 was a single car family. Dad went to work all day while mom took care of the house and kids.
By the mid 50's that was turning around and most people were securing a second car. Small plazas anchored by new supermarket franchises began popping up along what had been country roads. In 1955, near where I lived the first (and for a long while the largest) mall in America was built. It was called Roosevelt Field Shopping Center and was built on a place called Hempstead Plain. For a while Roosevelt Field drew everybody on Long Island much like Kukui Grove does on Kauai today. Roosevelt Field was on Old Country Road. That road was a two laner with overarching trees in 1950 - today Old Country Road is six lanes of sprawl.
Since the early 1980's a new and more ominous development has emerged - exurbia. Exurbia is the residential development in rural areas beyond the old suburbs and out of touch with the cities. Exurbia has developed along with office parks and commercial sprawl often in what was once farmland. Exurbia s the seed for the Big Box phenomena we see today. In exurbia most homes require at least two commuting bread winners and a car for every person of driving age. You have to drive somewhere to do anything.
Most on Kauai agree that an exurbia style life is not the direction we want to see the Garden Island go, yet we embrace the Big Box stores for their convenience and economy.
Roosevelt Field Shopping Center on Long Island as it looks today, was the first mall in America
What is a Big Box Store. Well, California defines big box retail stores as a “store of greater than 75,000 square feet". The Maryland Department of Planning defines big box retail facilities as “large, industrial style buildings or stores with footprints that generally range from 20,000 to 200,000 square feet”. Like the old malls that needed the anchor of a Macy's or Sears to support smaller stores, the Big Box stores attract smaller specialized warehouse type stores that are big in themselves. These include Staples, Officemax, Best Buy, Circuit City, Target, Pier One, TJ Max, and Bed Bath & Beyond, as well as Brand Outlets and more.
The leadership of Kauai, made up of the Mayor and County Council, are beginning to look past the convenience and economy of Big Box stores and struggling with what should be done to control sprawl on Kauai. It has been asked if a limit on square feet could be put in force to keep Big Box stores from dominating commerce on Kauai. Should we limit stores to 100,000 or 125,000 square feet?
Well, on Kauai the horse is out of the gate already. We have four 100,000 square feet plus stores (Walmart, K-Mart, Costco and Home Depot) in close proximity. Given the range of national brand chains that cluster around such anchors, any limit above 20,000 square feet will not slow the introduction of second tier warehouse stores. The average Pier One is about 10,000 square feet; Officemax is about 20,000; Best Buy is about 30,000; Bed Bath & Beyond is about 40,000, and a Target Store is over 100,000.
As a contrast, the average supermarket in the US is 45,000 square feet, while in the state of Hawaii the average is about 30,000 square feet. On Kauai the average supermarket is even smaller at about 25,000 square feet. My suggested cap on Big Box floor area for Kauai would be caped at 25,000 square feet.
A Big Box Plaza in Rancho Cucamonga, CA, forty miles east of Los Angeles
The economy of scale that Costco represents is based in part on the energy and effort required by everyone going to one source to shop. The two gallons of gas it takes to drive from Kapaa to Puhi to shop at Costco is part of the cost Costco doesn't have to pay. I first realized this kind of "false" savings when buying toys for my kids that were labeled "some assembly required". It dawned on me that I was working for Hasbro in a basement assembly sweatshop for no pay.
Another example of a false economy lies in the true cost of "cheap oil". Cheap oil requires us to have a military machine that includes several nuclear aircraft carrier groups and all the personnel and material that supports them. How cheap is Iraq?
Is there a solution for Kauai residents who need to shop and their struggle in traffic to do it? Yes, but it won't be very appetizing until traffic grinds to a halt and gas prices go through the roof and the economy takes a nose dive.
The answer is in a different distribution model. In some ways that model already exists in some business operations. We see it in the distribution of food and goods by Big Save and Ace Hardware. Instead of having one superstore these businesses are distributed in smaller stores across the island.
Radio Shack is perhaps a good example. They do not build superstores. They have a small footprint and could operate several stores on an island as small as Kauai, if they needed to.
We have in place FedEx, Airborne Express and United Parcel and even the US Postal Service doing daily deliveries. However, those same delivery services will be economically useful when energy costs are so high that one truck distributing locally sold goods is significantly more economic than each consumer sending out an SUV to retrieve each order.
Businesses like Costco and Walmart are going to have to reevaluate their business models to survive the crunch that is coming. Some will make it, and some won't. Getting "green" will be a crucial commitment by the survivors. This will include not only a different distribution model, but a different supply model. Will a new greener Walmart Superstore have the wisdom to buy all the Kauai grown organic produce it can get its hands on, or will it be dependent on Florida and California for most of its supply? We will see.
Subdivision in Lihue just south of Kukui Grove Mall shows advanced stage of Kauaifornication
What will be the effect of the wide adoption of super retail stores on Kauai? Increasing highway congestion. Too much dependence on the style of franchise America. It it is embarrassing that last year Kauai residents voted Walmart as the best source for flower leis and Starbucks was voted the best cafe on Kauai. In short, Kauaifornia here we come!
Besides traditional local businesses there will likely be a niche for new business models that will serve the economic realities of the future. To anticipate this trend I would suggest that regional shopping districts be developed in existing town centers. They would have the effect of de-centralizing the Big Box monopoly of Puhi and invigorating the outer town centers.
These regional shopping districts could also be places with incentives for locating businesses like a Big Save Supermarket, an Ace Hardware, a Radio Shack, and a Borders Bookstore. I propose we consider Hanapepe, Koloa, Lihue, Kapaa, and Princeville as the possible locations for these districts.
In conclusion, our leaders should be imagining what the future will be like after the "cheap oil" is unavailable and plan accordingly. In part that means influencing the private sector to adopt business models that address more than today's bottom line.
Continuing to build Big Box stores and their ancillary national brand outlets in one place on the island is only investing in an easily anticipated economic disaster.
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Island Breath: Big Box on Kauai
Island Breath: Big Box Impact Analysis
Island Breath: Mall-Warting America
Island Breath: Big Box Blues
Island Breath: Costco & Kauai Planning
For a group trying to stop Wal-Mart expansion check out