Making a case for donuts


Deer in Headlines

By Gery L. Deer

A national donut restaurant chain wants to move in 350 feet from a hometown favorite. Residents in uproar! Small business threatened. City council perplexed. What happens next?

While this old-styled news report is somewhat exaggerated, the story is true and it’s a common scenario in today’s business world. When big-box retailers of any kind threaten a unique local business, the community will often rally around the shop, not necessarily to squelch change, but to protect what’s already in place.

Tucked into the northeastern edge of Montgomery County, Vandalia, Ohio is a small, thriving community with a population of just over 15,000. Since its incorporation in 1848, the city has grown steadily and is the home of the Dayton International Airport, and the so-called, “Crossroads of America,” now represented by the intersection of Interstate Highways 70 and 75.

It’s usually good for the local economy when more businesses come to town. A new establishment brings jobs, tax revenue, and healthy competition, which can keep costs down for consumers and encourage more spending. But when it’s a huge corporation setting up shop next door to a local competitor, even a slight pricing or patronage difference can be devastating.

Many family-run, independent businesses operate from a shoestring. Every penny matters to the health of the establishment. If the product or service offering is already one of low retail price, it can be difficult to grow beyond even a modest profit or a break-even point. So any reduction in sales could be devastating. But protecting the small entrepreneur while maintaining growth is a difficult tightrope to walk for many bedroom communities.

Whatever they might think of it, citizens need to remember that in a case like this, there is a great deal of detail to consider. The city government has to weigh the overall impact to local commerce, infrastructure and labor. And, while a planning commission might approve the overall proposal for a new business arrival, they’re not generally the ones answerable to the voters – that’s where the city council comes in, and they are … politicians. So, the waters get a bit murky.

For argument’s sake, let’s look at both sides of the same coin. In a situation like Vandalia’s donut debate, the city wants to be considerate of a long-time, local business without stagnating the growth of the community. On the surface, it might seem a great idea to bring in a national chain, even if it directly competes with a single, local favorite.

Speaking pragmatically, large, chain stores tend to hire more employees than the mom-and-pop shop, pay higher taxes and usually have the money to improve the building or location in some way. Local stores often forgo any upgrades due to lack of funds or nostalgia, sometimes leaving the location to appear perpetually old and in disrepair.

But the homegrown shop offers some positives in its favor as well. A locally owned business has a stake in the community. That is, they care about what happens and will act their conscience in the best interest of the town. Chain stores have little to no vested interest in the surrounding community, except where it benefits their bottom line. Additionally, along with the question of loyalty comes the problem of limited infrastructure.

In a city like Vandalia, residential and commercial areas are closely situated and any additional retail activity has the potential to create problems for those who live there. One argument against the additional donut shop leans more towards the problem of increased traffic and noise where residents already contend with their fair share.

Clearly, the donut dilemma will occupy the attention of the city government and news media for a while. Whatever decision is arrived at will likely also set local precedents in dealing with these kinds of issues going forward.

Perhaps if local governments offered to hometown business the same tax deferments and other perks usually reserved for tax deferments usually reserved for big box companies, these kinds of issues would be a thing of the past. The city would grow, consumers would benefit and the economy would thrive.

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Gery L. Deer is an independent columnist and business writer. Deer In Headlines is distributed by GLD Enterprises Communications, Ltd. More at www.gerydeer.com.

Gery L. Deer is an independent columnist and business writer. Deer In Headlines is distributed by GLD Enterprises Communications, Ltd. More at www.gerydeer.com.

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