Originally posted June 4, 2011
Family Dollar, Dollar Tree, and Dollar General operate 16 stores within New Orleans city limits. If the New Orleans City Council has its way, that number will remain 16.
Rather than encourage the creation of jobs, tax revenue, and convenient, friendly priced household goods in the Gentilly and eastern New Orleans neighborhoods, our City Council, in its May 19 meeting, would rather pass two motions that direct the City Planning Commission to hold hearings to investigate the possibility of prohibiting all new “medium-box retail stores,” according to council-members Cynthia Hedge-Morrell and Jon Johnson.
Their rationale focuses on two thoughts. First, stores like these are “running everybody else off because they buy up the property” and second, “the community is adamant that they do not want another Dollar General, another Family Dollar within a five-block radius.”
Regarding the first thought, who is everybody else? What other companies have been unable to purchase property on the open market instead of the dollar stores in question? Who are these mystery businesses trying desperately to enter these markets but remain stymied by Dollar General and Family Dollar? The answer is of course, no one. If other companies saw enough value in investing in these communities, we would see their presence. That is not meant as a slight on Gentilly or New Orleans East, but recognition of the reality of the situation. Other companies do not see enough opportunity or value to invest there.
Therefore, I ask the City Council, why alienate the few companies willing to invest in these areas in favor of the pipedream of a Target or Best Buy in their place?
As to the Council’s second thought, after locating all 16 stores in question, 9 of the 16 are located within these areas of the city, with 6 of those stores being Dollar General properties. Obviously the comment about no more stores “within a five-block radius” is for dramatic purposes; however it results in a misleading premise. Now, I am of course a proponent of free markets, but does it not stand to reason that if a community did not want more stores of a certain variety, that they would in turn not support that business with their purchases and the store would subsequently close? Based on the success and expansion of these stores, that is clearly not happening. In fact, the opposite is occurring. The demand for stores just like these prevails! No amount of governmental paternalism can overcome the sheer power of convenience and low priced goods that people need and want.
Nolatarians demand that the New Orleans City Council abandon these motions and instead focus on creating a city more attractive to business that increases competition and choice, rather than attempting to artificially manage markets through force.
*Credit for above quotes goes to Bruce Eggler of the Times-Picayune. Read his article here.