Natural Foods Merchandiser

Independent Doesn’t Have to Mean Alone

Running an independent store can be a lonely occupation. But for many naturals stores, being independent is a point of pride. Like Rudyard Kipling?s ?The Cat That Walked by Himself,? many naturals retailers want to set themselves apart from the mainstream.

But, like the Cat, many also long for a comfortable place by the fire. They?re finding a happy medium by joining independent business alliances, groups of locally owned enterprises that pool their resources to promote themselves to the community.

?It?s hard to be an independent operator, and we all know that,? says Dan Gillotte, general manager of the Wheatsville Co-op in Austin, Texas. When independent businesses from shoe stores to locally owned hospitals band together, ?They can be like a pebble against the tidal wave of national advertising. ? Because we?re cross-sector, we can interest a lot of people and catch them in different places.?

Those places include shopping promotions where purchases at member businesses enter consumers into prize drawings; directories and ads featuring member businesses; and an ubiquitous bumper sticker proclaiming ?Keep Austin Weird.?

Communities don?t have to be weird to create a successful independent business alliance, says Jeff Milchen, outreach director for the American Independent Business Alliance of Bozeman, Mont. Along with Boulder, Colo., where Milchen and some friends established the first independents? alliance in 1998, strong alliances exist in progressive cities such as Charlottesville, Va., and Santa Fe, N.M. But IBAs also have sprung up in Tampa, Fla., Phoenix, St. Louis and Salt Lake City.

?Branding plays such a huge role in people?s decision-making process,? Milchen says. Small businesses can band together to build the idea of community-as-brand, ?making people more aware of the choices they make and the impact of those choices.?

?It makes the money stay in the community,? says herbalist Daniel Gagnon, owner of Herbs Etc. in Santa Fe and a member of the Santa Fe Independent Business and Community Alliance.

Gagnon ticks off some of the reasons his retail herb store joined the alliance: Whole Foods, Wild Oats, Vitamin Cottage, a new Trader Joe?s, an upscale grocer called The Marketplace and, soon, a new Pharmaca, plus at least one other herb store, ?all in a small city of 70,000,? he says. ?Conversely, they?re all doing well and my retail store?s also doing well.?

Austin?s IBA attracted attention in 2002 when it underwrote a study of the economic impact of a proposed downtown Borders store in a development that had garnered promises of more than $5.6 million in public incentives and utility improvements.

The figures were startling. One hundred dollars spent at Borders returned $13 to the local community, while $100 spent at BookPeople or Waterloo Records and Video generated $45 in local economic impact. A typical Borders store would generate $800,000 in local economic impact each year, while BookPeople generated $2.8 million and Waterloo $4.1 million. More money would be spent on books and records in Austin if Borders opened, but less money would remain in Austin, researchers said.

Those numbers, coupled with growing public perception that such development incentives amount to corporate welfare for companies like Wal-Mart, were enough to change the direction of the project. ?From the public?s perception, it was a bad investment,? says Milchen. The public subsidies were not approved, and Borders withdrew from the project, he adds. ?When Borders was left to compete in a free market, they didn?t even try.?

The Sixth and Lamar redevelopment did go forward, with Whole Foods Market?s corporate headquarters and flagship store as an anchor tenant, along with BookPeople and an assortment of national and local retailers. While Whole Foods has grown into an enormous national chain, its Austin roots placated potential critics. ?We?re an original weird business,? Chief Executive John Mackey told the Austin American-Statesman.

Weirdness, at least in Austin, has cachet.

?Even businesses that aren?t so weird have adopted it,? Gillotte says. ?Even the local paper wants to keep Austin weird. That?s powerful.?

AMIBA provides a starter kit for $14 and offers ample information about the independent alliance movement on its Web site, Member organizations get access to the collective expertise of other alliances and templates for everything from sample ads to business plans.

Co-ops are a natural fit for independent business alliances because they emphasize community and strength in numbers, Gillotte says. On the national level, co-ops are developing initiatives that will allow stores to maintain their autonomy, but work together to capitalize on economies of scale in buying and promotion.

Gillotte has found that the time commitment and minor cash outlay for membership in AIBA has paid dividends in connections with Wheatsville?s larger community.

?Being insular is not the way to grow,? Gillotte notes. ?Health food retailers should look up from the cash register every once in a while and look out at their community. That?s about all we?ve got going for us.?

Natural Foods Merchandiser volume XXV/number 10/p. 54, 57

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