The city has been without a brand-name supermarket since 2007. But government is trying to change that.
Criticism against big-box stores is well-researched and oft-repeated. For every two jobs a Walmart creates, one study found, it eliminates three more. Another concluded that just 16 percent of the money generated by a SuperTarget store stays in the local community.
But those arguments may not hold in struggling Detroit, where there isn’t much competition to poach and many residents are desperate for any job. With a few retail behemoths planning to set up shop in Detroit in the next several months, the city will make an interesting test case for theories about the economic value of big-box stores. It's easy to focus on labor policies or chains' competitive advantage over the smaller guy in flourishing communities, but the story is different in areas where not much else exists. Detroit residents have largely embraced chains not only as a source of jobs, also an expression of confidence in their city, about which they remain fiercely proud.
Over the past several decades, Detroit has become a place where shopping is practically nonexistent. Retail, like Detroit’s population, has moved steadily out of the city to the sprawling suburbs and beyond. The city has been without a brand-name supermarket since 2007, when the Farmer Jack chain went out of business. Today there are no Walmarts or Targets within city limits—not even a Kmart, which began its business in Motown.
Now, local and state governments are working to fix the problem. Last year, Michigan approved millions in tax credits to Meijer, a Walmart-esque Midwest chain, to open two stores within Detroit city limits, Whole Foods Market plans to open a small outpost in one of the city’s central neighborhoods next year. Contrary to the regular narrative of big-box stores muscling out other businesses, Detroit activists hope these outlets will pave the way for new businesses, either other brand-name retailers or smaller, home-bred ones.
"Quite frankly we've been waiting for a Meijer or something for years," says John George of the Motor City Blight Busters, a local nonprofit that cleans up decaying neighborhoods and teaches job skills.“The reality is when you have someone who wants to invest millions in your community and you are surrounded by blight, if you don't at a minimum look at that opportunity, you are ignorant.”
While more than 700,000 people still live in Detroit, now the nation’s 18th-largest city, Olga Stella, vice president of business development for the Detroit Economic Growth Corporation, saysnearly 60 percent of employed city residents work low-skilled jobs in the suburbs, where stores are plentiful. New stores may help reverse, or at least stem, the ongoing exodus from Detroit by making life a bit easier.
“No one wants to live in a place where there are no stores and nowhere to shop; it is not fun to take a bus to another neighborhood to buy things to survive,” says Richard Longworth, a senior fellow at the Chicago Council on Global Affairs and author of Caught in the Middle: America’s Heartland in the Age of Globalism. “These neighborhoods have problems that go beyond this, but stores help restore community pride.”
Detroiters “deserve not only Meijer's lower prices but also their higher standards,” says Ben Falik, a volunteer and nonprofit organizer in Detroit. George compares the benefits of national retailers to those that would stem from revitalizing the city's artist communities—both are signs of prestige that have been missing from Detroit for years. By having them within city limits, George says, Detroiters won't need to be as dependent on the suburbs.
But of course, the biggest impact of big-box stores in Detroit would be economic, and research on the potential ripple effects is mixed. A Loyola University study concluded that the 2006 opening of a Walmart on Chicago's West Side, an area much like Detroit, led to the closing of 82 local stores within two years. On the other side, a 2008 study from West Virginia University suggested that Walmart and similar stores don’t eliminate all small businesses, but drive weak ones out, making space for new and stronger ones to rise in their place.
Detroit’s economic development proponents don’t see a tension between small and big businesses. “When you look at healthy American cities across the country, there is mix of big and small,” Stella says. “It’s not an either-or proposition. We’re hoping what is happening now will make it easier for smaller retailers to make investments in this city. This big-box retail is only a part of the larger equation.”
The locations of the planned Meijers and the Whole Foods were chosen strategically: One Meijer is set to open at the northwestern edge of the city, near suburban shopping centers that Detroiters frequent because of the lack of options in their neighborhood. The other will replace an abandoned high school in a blighted part of town that’s home to a growing artists community hoping for new shopping and dining options. The Whole Foods will open in the central part of town, which is crawling with suburbanites during the workweek and during sporting events but is hardly considered a prime retail destination. The opportunity has always been there, Detroiters say, pointing to the success of the few brand-name stores—most notably Home Depot, which was identified in 2009 as the chain’s most profitable store in the region—that have taken a chance on the city.
“Meijer and Whole Foods coming shows that there is confidence in the retail market here,” Stella says. “We're at a moment where we can make a case to not only other retailers but property owners that Detroit is worth investing in.”