I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that spoils in the very short term). When I've got a bit more time I want to try that idea and see if it works as a way to revitalize otherwise charming old downtown areas with vacant retail space and communities wishing to bring back their main street. Giving this idea away in case anyone else has tried or wants to try sooner than me and report back.
High commercial rent affects not only diverse businesses (good ideas that take risks) but also the quality and accessibility of goods of necessary businesses. Near me, simple mens' haircuts have soared to $35+... Except those shops that have been around for ages and own their buildings. They still charge sub $20.
Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/
A good haircut takes about 30 minutes. So if the barber is getting $20/cut that's $40/hr gross max assuming he's booked solid every day (most are not). From that they have to cover the rent (or property tax, insurance, and upkeep if they own the shop), utilities, scissors/clippers and other instruments, consumables, their own self-employment tax, health insurance, and retirement. That doesn't sound like it would leave much.
It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.
AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.
Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense
We had this experience with a local town centre where the high street basically died. Retailers priced out by high rents, which was fine when the economy was good and people were spending, but as soon as it took a dip there was nowhere to go and they had to shut up shop.
And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.
That seems like a rather inefficient use of resources. How long will a fund typically keep that on the books before they have to offload the asset or declare bankruptcy? At a certain point, that smells like a scam with a real estate business attached to it.
Commercial real estate lending typically has a clause that allows pausing of payments during a vacancy and letting the interest accrue into the balance of the loan - effectively, the banks are giving the property owners a free option to try and get the vacancy cleared without affecting long-term incomes and asset prices.
> That seems like a rather inefficient use of resources.
Inefficient for society? Yes. But for the capital providers aka investment (and let's be clear: retirement) funds and banks? Definitely not.
The fundamental problem at the root of all of it is how the US does pensions. In contrast to most European countries that operate in a redistribution system, aka the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves... which leads to a constant influx of cash into all kinds of asset markets, no matter the market conditions.
And that is bad, for multiple reasons.
- it ties general economic downturns to people's pensions. That in turn factually prevents politics from doing what is right (e.g. restrict climate gas emissions), because a lot of companies make a lot of money by abusing the environment and cracking down on that would lead to them losing value.
- it creates a lot of perverse incentives. When you got almost 50 trillion dollars in total retirement funds [1] with hundreds of billions of dollars in new savings each year... that money has to go somewhere where it is backed by a physical asset or a consumption in the end. A lot of that money ends up in government bonds, which "allows" the US to cut taxes for the ultra-rich without limitations and balloon the national debt without consequences because guess what, the US can "always" borrow money. It's just as bad as Japan, only less openly exposed. What does not end up in bonds ends up primarily on the real estate market, driving the nonsense we're discussing here, and what remains goes into crap like Yo [2].
- it disincentivizes the forces of the free market from holding bad actors accountable. Under "normal" conditions, the AI bubble or Tesla would simply have run out of cash years ago because no one would give them more money, but when the scam is so large it ends up in the S&P 500, cash will flow in automatically from all the dumb money that is going into ETFs and other pension investment vehicles. Once you are in, you stay in.
- To make it worse, people are increasingly going from "moderate" managed funds to the extremes: either purely tracking funds that have virtually no fees deducting profits (and, in exchange, do not exercise voting rights) or into high-yield "activist investor" funds that love to do exploitative shit like forcing companies to redistribute their liquidity reserves as dividends (robbing the company of resilience against economic downturns) or engage in LBOs, buy-and-break-apart schemes and the likes. These almost always offload the consequences of making money for investors onto society at large... like, for example, malls falling apart because anchor stores fell victim to the vultures. Toys'R'Us is one particularly nasty example.
> At a certain point, that smells like a scam with a real estate business attached to it.
The entire pension based economy in the US is the true scam - in the end, it's all IOUs just like our "pension points" in Europe. If there is no economy around due to demographic collapse or whatever, the IOUs become just as worthless.
Normally I wouldn't even care, but unfortunately, the US pension market is so large that a lot of dollars flow out elsewhere, including our healthcare system, and I'm sick and tired of American vultures buying up everything in Europe Just Because They Can.
> most European countries that operate in a redistribution system
The Netherlands does not. [1] It is also considered one of the best-run pension systems in the world.
> the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves
US Social Security works in the manner you described - current workers pay for current pensioners. This doesn't work great as we already know.
Making assets instead of workers pay for pensions isn't a bad idea per se. It makes no sense to load workers down with taxes to pay for seniors. The math only works as long as the population of workers grows or if you tax workers more and more.
Workers' labor produces ever-increasing surpluses every year. Use those surpluses aka higher productivity to support seniors.
Americans save at a much lower rate than Europeans (5% US vs. 15% EU), which I think makes your whole thesis backwards. Maybe Americans SHOULD be saving more for retirement, but they aren't!
The flip side is redistributive pensions require an ever growing population and most European pension systems will go bankrupt within a couple of decades given current birth and immigration rates.
> The flip side is redistributive pensions require an ever growing population
Stonk market based pensions require that as well! Someone has to work in the future and earn dollars so that he can give me these dollars for my stonks. And that falls apart when the working population drops - either due to demographics or because the world splinters apart and the age of global trading ends. Stonks are just as much IOUs as "pension points" are.
And no, automation isn't a panacea either, because an economy not just requires workers to do work, but also people having money to buy things - that's already setting our time's economy on fire as more and more people have to expend more and more money just to make rent.
> And no, automation isn't a panacea either, because an economy not just requires workers to do work, but also people having money to buy things
Automation is the whole reason people have money to buy things. Before we had automation everyone lived on farms and sewed their own clothes. Only noblemen could afford to pay for clothes. Your intuition is plain wrong, I'm sorry.
AI may take away purpose if it takes away literally everyone's jobs. The wealth and productivity of the economy doesn't go away. It becomes more concentrated. De-concentrating it is a political problem.
Pensions are not investment funds (for the individual employee/retiree). They are distinct from 401ks and their ilk. GP explicitly spoke about "pensions", which have almost no requirement to diversify - at least one I know of was discovered to be "invested" in luxury rugs and furniture for the CEO (Their value will go up!!! /s).
This is broadly accurate, but it can be a little easier to point the finger at the actual culprits, which is Wall Street.
The problem is the financialization of everything, and the insistence on ensuring high rates of return above all other goals. Which is highly related to the dynamics that you mentioned here, so we're agreeing.
But other countries don't do this because the government stops them. In this country, the financial sector is more powerful and can override democracy through a couple of obvious means that we've all seen.
The result is effectively the plundering of a previously strong economy for the benefit of a couple of people.
Ask yourself why General Motors is taking the many billions of dollars in cash that they generate from their business operations and literally sending it directly to Wall Street bankers through the form of stock buybacks rather than investing in the next generation of electric cars. It's an obvious mistake, and eventually the bill will come, but maybe not in the lifetimes of the people who profit from it. Certainly not before they have a chance to buy another summer home.
China doesn't do this. They keep savings rates high and returns low, which means the money goes into building factories and infrastructure and lots of other things that ultimately make the country much, much wealthier.
> Ask yourself why General Motors is taking the many billions of dollars in cash that they generate from their business operations and literally sending it directly to Wall Street bankers through the form of stock buybacks rather than investing in the next generation of electric cars.
Hmm, putting aside others issues (e.g. stock-manipulation to make quarterly numbers) stock-buybacks might be viewed similar to repaying a loan and reclaiming the stock that was put up as collateral...
Although I suppose if the loan is zero-interest, why would one want to do that? Even if somehow all spending options are terrible today (but might improve tomorrow) one could just sit on the cash.
All spending options are not terrible today. That's the point. Without reinvestment, the companies will fall behind and die.
The decisions by major companies to prioritize stock buybacks over capital investment in the next generation of products and innovation is the absolute core of why the financialization of everything threatens to destroy us as an industrial economy and, by extension, our prosperity and way of life.
>AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.
Well, if the town is dying, the "value of that building" is effectively cut in half, or worse, anyway. Asking a lot for rent is not gonna magically make the building worth more - it will just keep it unrented.
It's not just accounting, it means enough things that they're incentivized to manipulate it upwards. It impacts the loans they can get and the interest they pay, enough that it may be worth it to forego some actual income to keep the fake numbers up.
But at some point it has to collapse, it seems to me. You can't forever fake a high value on a property that is bringing in no rent. Unless the real value is just being a outwardly legitimate-looking place to park money.
And they’re often owned by funds that are measured in the billions. A parking lot in New York covers for a bunch of empty middle America storefronts, as long as the valuation works out on paper.
It seems that approach is a way to generate losses without actually losing the titles. These losses are needed to offset incomes elsewhere thus not paying taxes on profits.
Investment fund's commodity is value - the rest are just tools to optimize the value.
In aggregate, the owners of these properties are investing to earn a return. Losses only lead to "not paying taxes on profits" if there are no profits. The overall portfolio has to be earning a risk-appropriate return or investors will go elsewhere.
Accounting rules allow you to extend and pretend which is common in commercial. Because loans are sucuritized by other assets there can be a lot of different assets that could all suddenly become distressed just by pricing down rent in one building
Right. . . but isn't that just obviously stupid? If I say the rent is $3k a month but you get all 12 months free, why would anyone be fooled by that? Why would you base it on some hypothetical rent rather than the amount of actual money that the property takes in?
It is stupid, but every party involved benefits from playing by the stupid rules, so they keep doing it.
If the lender insists the property be valued based on actual collections rather than hypothetical collections based on the rate once discounts expire or the asking rate if vacant, then they will have a loan where the borrower is underwater and that's going to end up as a loss on the bank's books.
If the borrower values it factually, they will be underwater and likely have to sell for a loss or be forclosed on.
There's also portfolio effects. If rent drops are acknowledged in one space, nearby spaces may also acknowledge lowered rents and most banks have lots of loans and many borrowers manage several buildings.
The bank knows but they maintain the fiction that they don't because their books collapse too if they count those. Banks make money from loans.
Don't forget this is typically a short term things. When the economy improves the building will be rented again. So they need the books to look good today to get through.
And commercial loans are NOT like your home mortgage. One you got your home loan, the bank no longer cares (or even can care) about the value of the house, only if you’re not actively destroying the property and maintaining insurance and paying on time.
Commercial loans are often shorter duration and roll over and highly tied to the valuation of the property or properties, and often have clauses allowing them to call the loan if valuation dips too much (think: margin call).
Loan to Value (LTV) is a percentage that tells you how safe a loan is. You divide the amount of the loan by the value of the building. So if I buy a building for 10 million with a 6 million loan and 4 million of my own money then I have an LTV of 60%.
This means if I go bankrupt then the bank can sell the building and get its money back.
If the value of the building halves because the rent halved then I have a 6 million loan on a 5 million building. My LTV is 120%. The bank cannot get its money back by selling the building.
No bank is going to give me a loan on a property with an LTV of 120% so I’m stuck with my current bank. My current bank then increases my interest rate because I am now a very high risk customer who can’t leave. This is very expensive for me.
One way out of this situation is to get my LTV back to 60% which means I need to reduce the loan to 3 million by finding 3 million to pay off part of the loan.
Another way out is to sell the building for 5 million then pay the bank one million, exiting the deal with a loss of 1 million.
None of these are good for me. I’ll do anything to keep the value of the building high by charging high rents even if no one can actually pay the rents and the building sits empty.
Long term I might be able to exit by getting permission to convert it to flats.
Don't forget that long term the current downturn is likely to end and so I will again be able to get the rent in a few years if I can just hold on for these bad years.
... which sort of assumes that the global downturn and the local downturn are completely unrelated.
Like, if a rent hike pushes out the tenant who has been there the longest, who has the most consistent revenue stream, in other words is the surest bet, then that, all by its lonesome, should be a pretty clear risk indicator to the bank.
The commercial market is functionally frozen and illiquid. Owners can’t come down without declaring bankruptcy, bankruptcy is bad for lenders because they can’t move the property for the loan amount so you essentially have a mass delusion because accepting reality would bankrupt much of the existing players and start a crisis
I hear people say this a lot but it doesn't make any sense. Why would the value be based on some imaginary rent rather than the actual amount of money taken in? It seems stupid for anyone to say that asking, say, $2500 rent with three free months (giving $27k for the year) is better than just asking $2000 with no free months (giving $24k for the year). If this is really what is going in then the system deserves to crash.
It’s just how commercial real estate is valued. It’s very formulaic based on the local multiplier of rents. It even applies down to single-family homes but those have competing buyers (families) - but in pure commercial you are the multiple of rents and basically nothing else (save in the strange case of someone wanting that particular property).
The key is home loans for normal families can’t be called - commercial loans can.
Even in the best of times you will have empty places so they have to ignore unrented places since there is no formula that can tell the state of the economy from just current rent. Real estate is always local so even in the worst economies there is always some place booming
i don't know if it's the same everywhere, but in my town there's essentially no taxes on vacant commercial buildings. the tax rate is based on the use
and so landlords who own a whole bunch of properties would much rather a unit sit empty for a year than lower the rent to fill it, becauase it costs them basically nothing and lowering the rent on one unit might have a cascading effect that lowers the rents on all their other properties.
I see this also, but I don’t get it. An empty building still costs a bunch of taxes and upkeep and still rapidly deteriorates without tenants looking after it. Aren’t these people hemorrhaging money? What do they have to show for it? My city actually handled a majority of the rent so a business could revitalize a large-ish property that had been empty for years. Of course it failed as soon as that deal ran out.
The economy has always had ups and down. While that is no guarantee, it is a strong sign. Inflation means that rent will get cheaper in real terms just staying the same. Things will be bad - again - for a few years, not that is nothing unusual.
Of course real estate is very local. There is a big difference between property in a growing city and land in a rural small town.
Except we have the entire commerical business districts of small and mid sized cities destroyed from these practices and there is often no bouncing back from that. Oops.
If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.
The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change.
Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.
You’re right but it seems like the exact opposite scenario is usually in effect.
Particularly in the UK, landlords seem stuck in some kind of bizarre logic of “oh, nobody can rent my building, it just has to sit here being worth nothing” and “oh, you want my worthless building, then naturally I’ll need ALL your profit and more.”
There are accounting practices in place where a property value is set based on rents and that value isn't reset when a unit is vacant, but it IS reset when a new lower rent is in place through various mechanisms of valuations.
You don't think that corporate weasels have a way to avoid the tax?
In Nevada, if you have a gaming license you must "use it or lose it", and for this reason, sometimes 24-hour "casinos" pop up in vacant buildings, just to operate the minimum number of hours to keep the license. Like one day a year.
If you tried to implement a vacant property tax they would set up the most pathetic minimum-compliant "business" you could imagine. "Golfball cleaning, $3.00 per ball, open 1-4pm tues-friday".
A Georgist LVT would fix that is short order. Start making owners pay compensation for keeping a valuable space empty and crumbling, and you'll see them step to it pretty quickly or sell it to someone who does.
If it's empty and crumbling, I doubt it's all that valuable to be repurposed for housing or anything else. I did note the other day in the very small downtown of a nearby minor city that the the ancient travel agent is now a party supply store. But, really, there's not a lot in that downtown.
The point of LVT is right there in the name: it is the land that has value. "Location, location, location" is an old cliche for a reason.
If you let your property go empty and crumble, the Land Value Tax is there to provide the incentive for you to either fix up the property and actually use it, or sell it to someone who will.
This is essentially saying "There's no hope; no one will ever return to downtown, no matter what!"... in a thread trying to find ways to prove that wrong.
Though I am pro-LVT, I don't think this will help in the current situation.
The owner, the bank, and the city all wish to maintain the illusion that a $10M building from 2010 is still worth at least $10M today, even vacant. No party wishes to realize the loss in value. Occasionally, the city may try to punish vacancy with a tax, which is still about additional revenue and not about realizing diminished value.
Your comment makes me think of this recent post, https://laurenleek.substack.com/p/the-basket-and-the-booza, from an always wonderful blog which looks at why Australia has far more independent stores left compared to English cities and comes to a surprising conclusion:
"The unifying claim is this: chains follow legibility. A city becomes legible to a site-selection algorithm when it has been organised into walkable, transit-connected high streets with predictable pedestrian volumes. That legibility is what good urbanism produces and simultaneously what makes a city capturable."
Oh sorry, the pull quote does seem nonsensical by itself. It's well down in the conclusion of the article which, while written for the semi-layperson, is very heavy on the data science. Essentially it means what we currently think of (for good reason!) as good urban design makes it easier to analyze an area to optimize for profitability.
I take my two little ones almost weekly to our small downtown area. The trip is usually a coffee shop, the bookstore, and a rotating third one (sometimes a candy shop sometimes the toy store, sometimes something else).
In our case the coffee shop is in the bookstore and it is located right in front of the third. The third is a really nice park (think lake and lots of playgrounds plus activities).
This makes a lot of sense from my own behavior.
If a downtown has multiple places to stop, I am far more likely to go.
Better yet if it has attractions for both my wife and me, then we are both more likely to go.
Even better - if it has attractions open at different times of day - morning - errands like hardware shop, foods basics | afternoon - cafe, prepared food, more retail shop | evening - sit down dining, bars, checkout a book store.
It's always weird how some downtowns only cover a slice of this and as a result are dead after 6pm.. or don't come alive until 5pm.
(In slight contrast to my other comment) I think Larimer Square in Denver is trying to do something akin. There was a land-edge-lord kerfuffle and gone are staples like The Market and Ted’s Montana Grill (RIP, I was also just in Bozeman). rn one side is bookstore - jewelry & artsy - African jewelry & artsy - Rioja (Denver famous food) - John Fluevog (Vancouver shoes) - Osteria Marco (Denver less famous Italian) - Van Leewuen (NYC ice cream). I hope it all works...
now, bookstores here are a whole other mess. two words, Tattered Cover. there are ample used bookstores, though, i found a copy of Alinsky’s Rules for Radicals for $6.50 on Colfax that should probably be handled with BSL-3 precaution which is as it should be
I know someone who used to manage department stores (one branch at a time, several locations). He talked about clusters in a very similar way: Stores need nearby other stores to be attractive.
They still do where I live. Its rather nice but seems to be rotting a bit as every time I go there the kids section is clearly not cleaned or well maintained.
This is a timely comment for me. I have been doing research on opening a small indie (new/used) bookstore in a small old downtown I walk through almost every day. It has restaurants, specialty shops, coffee shops and a small local grocery store. I've always thought it was missing a bookstore.
Any tips/warnings that might not be immediately obvious to a hopeful bookstore owner? Do you think there is a sweet spot in terms of square footage of retail space? Margins are low so do you supplement with sidelines/events/memberships?
One of my next steps is to join the ABA as a provisional member to get access to their new bookseller guides.
I'm just an internet commenter who knows nothing about running a retail store and has thought about a bookstore as well. With that out of the way, finding high margin items to sell to offset low margin items would make sense. I think this is why you see coffee paired with bookstores, coffee should be high margin but might also require food licensing/inspections.
Ideas for a local bookstore: seasonal and local items for sale, think gift giving timeframes - mothers day, fathers day, end of year holidays. Items like unique greeting cards, calendars, custom gift wrapping, having a kids section with higher margin items kids like - toys, trading cards, etc. Also you could throw some checkout friendly things like book lights, book marks, candies, etc.
If you find local craftspeople, offer some shelf/floor space for free if you can agree on a split of the margin. Hand-crafted things would pair well during holiday seasons and advertised properly might get repeat visits and word of mouth spreading.
I suspect, particularly for toy stores, there's also a weird incentive: if they stand alone, you don't want to bring your kids there because it's only going to cost you money. But if they're next to other shops, you can send your kids there to entertain themselves, while you can browse what you actually want to see in peace.
I have seen bookstore (second-handed books) thriving near universities. Your idea is actually very interesting and remind me of the mall model -- the mall model worked because everyone in the family gets his/her own share of pleasure. Of course the traffic matters a lot, too. Hope you start that experiment soon and succeed!
Universities are effectively ultra-anchors. You have large numbers of students from mostly middle class backgrounds, many of whom have free time and disposable income. (Or at least they're not worried about their loans yet.)
And then you have the academics. Tenured profs are relatively well paid. Adjuncts/assistants not so much, but they still like nice things.
The UK's public school towns (Marlborough, Harrow, Winchester...) often have a prosperous independent store economy on a smaller scale, for the same reasons.
Clusters work well in these towns.
If you try them elsewhere, like one of the UK's many run-down towns, they're more likely to fail because the prosperity just isn't there.
The general theory of most malls was that you had anchor stores. My local one has a couple of stores adjacent to the mall (a local chain supermarket and and Home Depot) that are very busy, almost too much so. The mall itself is pretty much dead and has been on the market for ages. The anchor stores--JCPenney, Sears, and Macy's are all long gone. Haven't been in the actual mall in ages but I assume it's pretty sad and there seem very few cars in the lots.
Oh, yeah, the Toys 'R Us in the complex is long gone too.
I'd be curious to know if you consider a Lego store a "toy store". There's one that opened in my city fairly recently and is in an area of smaller boutique shops (kind of like what you described).
Tsutaya, a Japanese dvd rental store has a specialty shop in Hiroshima. It’s best described as a library hosting a small electronics store, a clothing store, a stationery shop and a coffee shop.
I can't comment about the minimum number of stores, but I do think its the correct idea. I live in a town of ~12000. We have 6.5 bookstores (including the good local thrift store as .5). Stores/restaurants do turn over fairly regularly, so its still tough, but it certainly seems viable. We get a good number of tourists, which helps but I do think you need a mix of restaurants, and a mix of different types of stores. Even as you go to nearby towns with big box stores, they all have downtowns that are doing ok with locally run businesses. Notably the downtowns all are small business focused with few if any box stores
This strategy has worked well for both Shakespeare and Co. in Paris and Shakespeare and Sons in Berlin. Books + Bakery + Coffee. Both of course are set in living pedestrian cities. https://www.shakespeareandsons.com
I can’t comment on the shop in Berlin, but the one in Paris is a special case. It’s in a relatively central location in a 11M people metropolis, right on top of a major rail and metro hub and across the river from one of the most touristic monument in the world. And even though it’s not really in a shopping area, there are dozens of cafés within 2 minutes on foot. They don’t really have problems getting people to go there. Plus, considering how long hey’ve been in business, I assume they own the building, which shields them from the rent issue. They could still face problems (like Gibert next door that closed somewhat recently), but their situation is very different from the vast majority of shops in normal European cities (including the UK).
Yeah, I walked by the block-long line of people a couple months ago and pretty much crossed it off my mental list. Didn't need another physical book and there is no shortage of cafes in Paris. Also didn't even make a special trip there. I like to stay in the Latin Quarter and happened to be walking by.
I agree it's not exactly the random indie bookstore though as it's probably listed in every Paris guidebook.
Get 2-3-4 highly attractive shops that people go to (in Europe, Zara is an example) surrounded by shops that would otherwise die without the proximity/clustering.
Yup, that's why molls were so successful. They were deteriorating because of Internet, as a new "moll", covid speed up the process. But, frankly speaking, molls also killed many mom & pops shops scattered in the cities. So this is just evolution, I am not sure if it goes in the right direction, but consumers have the last word and they have spoken, even though, in the long run it hurts them.
moll | mäl |
noun informal, dated
1 (also gun moll) the female companion of a gangster or other criminal: I'd rush the money over to his moll.
2 a prostitute.
The most common in the US is the strip mall. This is a largely American, soulless construct of commercial space with parking out front, typically on a major road. There are lots of reasons why this flourished in the US. It's a symptom of society being so car-dependent, which is by design. Rents here are typically lower than other options so some businesses can survive in strip malls that can't elsewhere.
The next step up (density-wise) are actual malls, or shopping centers for the non-Americans. There are different versions of this. You have the entirely indoor mall. You also have other anchor stores that pop up nearby (eg Home Depot) that are popular but can't justify the mall rent costs. Often a bunch of other businesses will sprout around these stores, which is why they're called anchor stores. Anchor stores are also things you generally need in a mall to bring in enough traffic to make the whole thing economical eg supermarkets, department stores. Malls in general have been dying in droves. Basically too many got built in the 1970s through 1990s and online shopping is killing them. There are photography and video channels dedicated to exploring dead malls.
The third rarest option is the walkable district. This is generally the downtown of cities that existed before cars. People generally love these but public transit is an issue. Americans always want to drive even when there are viable options otherwise. That means having to build parking garages and the whole thing kinda falls apart. Or at least it losses some of its charm. The hellish end of this spectrum is Houston.
Some cities have managed to rejuvenate such areas by diverting traffic and generally investing in the area. But what tends to always happen is that businesses will rejuvenate an area and then the landlords will kill it by charging exorbitant rents. I've seen 40+ year old restaurants close because of rent hikes in areas that only really existed for that restaurant.
This is part of the problem with housing being so expensive. It makes everything expensive. That local shops? Well it costs as much to build as a house and a house is easier to sell. But a cafe or a bakery or a bookstore or some other eclectic shop can survive when the rent is $20,000/year. You don't need to pay staff as much when houses cost $100k not $1M. Expensive housing just strangles everything. But when that rent goes to $200,000 over a decade well then suddenly only chain stores and big box retail can survive there so what was once a charming downtown turns into Chili's, a CVS and a Chase bank.
So this can go wrong even in dense places like NYC. There's a real issue right now with so-called "zombie leases". Basically, companies like CVS, Duane Reade and Walgreens signed high-rent long-term leases but then decided to close the store. The store remains empty because the owner has no incentive to rent it for a now-lower market rent while the billion dollar company is still on the hook for it. Enough of these and a street can look abandoned.
I really think that when cities choose to rejuvenate an area they should acquire all of it first. Eminent domain, baby.
I saw a Tiktok awhile ago where someone posited that things we once took for granted get taken away from us and sold back to us. The specific example was walkable cities. That used to be the norm. Now it's a luxury. We can't have that. If people walk everywhere and take a train or bus well then they might not buy a car. Then they'r enot buying insurance and gas and maintaining it. Unacceptable.
I think it should work like this: government buys everything zoned as a store, restaurant or pub at a deliberate unfair rate. Create A budget for maintenance.
If you want to open a store you wait for a vacancy and apply. Citizens may vote for the applicants, the closer you live the more weight the vote has.
Count the store visitors and set some reasonable minimum. They don't have to buy anything. To much traffic would give priority for a larger building.
The first n square meters is free (smallest building). Low rent for anything above.
People want a tea room but you can't survive doing that unless you price the hot water absurdity. You can have lots of small shops selling eye candy. They don't have to sell a lot of wooden dragons, as long as it attracts visitors it's good to have.
It will be a town or city in the least boring percentage.
I live in a town of fewer than 8k people. Our local toy store is not only thriving, it’s central to the community.
People would rather shop there than go online. Why? Because they are a part of the community.
At every farmer’s market or community event they have a booth giving out free glitter tattoos to children, and they employ several teenagers part time to wrap gifts (of course this is free too), apply tattoos, and help out in the store.
This isn’t a unique concept. Going the extra mile and doing seemingly unreasonably nice things wins you customers and loyalty.
It would be great to have a "rural revival" where it's worthwhile to go back to the howling old owl in the woods, hunting the horny back toad.
Maybe the wave of AI layoffs can actually make that happen. We would need a visionary planner like maybe Christopher Alexander and then an administration to deeply care and support such a development.
I suspect if I were forced to make such a move, I'd be initially very upset, but long term, I'd probably welcome the change.
The united states could spark a rural revival like you're talking about with investment into the healthcare and education infrastructure in those communities. That's what other countries do to prop up the rural economy- the steady lifelong jobs created for all the people who work at the schools, clinics, the library, provide an economic base for the town.
True, although the New Deal era came close. America's most socialist time when it did the most public investment, and we are STILL living off the benefits of that.
My grandmother used to take me to Toys R Us for my birthday every year for exactly this reason — she didn't want to guess what I wanted, she wanted to watch me choose. Walking around that store and seeing what the toys looked like in person was something I looked forward to for days. You can't recreate that with an Amazon wishlist.
I’d guess one reason is that there has been no iPad/App Store/YouTube invented for dogs…
I have a gut feeling there will be negative consequences for how much time developing minds spend consuming but in the absence of clear cut evidence it seems to be the default.
My experience in a large US city is surprisingly the opposite. The toy stores I visit are doing great. I suspect this is is because a large portion of their business is for birthday parties.
I assumed many or most were gone because of Amazon. But after having kids and getting gifts for birthday parties, I've learned there are a lot of them and they are doing healthy business. Almost always a line on weekends.
Many or most in line take advantage of free gift wrap because they're on their way to a party.
In many ways it is more convenient than Amazon because you're going out anyway, why not get it at the last second with careful gift wrapping.
But even a recent trip to the suburbs surprised me. The Lego store in the mall had a velvet rope and long line of kids waiting to get in. I had never seen anything like this and apparently it is usually this busy.
I think it's hard to see the change in US toy stories looking at articles (and discussions) like this. There's always been turnover in retail; very few stores and chains last a lifetime. (I've always suspected it has to do with when key people retire or otherwise leave the business.)
Compared to when I was a kid, there's no shortage of toy stores: There's always something at the mall, Target has toys, bookstores have toys that didn't have toys when I was a kid. (My daughter asked me to take her to a bookstore in town last weekend that was about 1/3rd toystore.)
So, it's really hard to "blame" someone for a "demise" that, to me, looks like traditional retail turnover. Even if we didn't have Amazon, I'm sure older retail stores would turn over, and newer retail stores would eat them.
I have a 7 year old and for the past 3-4 years we make a weekly pilgrimage to a local boutique toy store specifically for birthday party gifts. It’s usually packed with others just like us doing exactly the same thing. They do provide the free wrapping service and they slap their story sticker on every box and it’s a good marketing strategy. But they also stock toys that are pretty unique and change the stock frequently, every kid we know practically has every toy you’d see at a place like Target. Their toy section seems to have been the same the entire time. Occasionally a new movie related toy comes and goes and a couple new big toy trends have entered but generally it’s all the same. Even the baby toys they sell are the same ones my kid had and has outgrown years ago. I’m not certain what their strategy is but it’s definitely not a good shopping experience for maximizing LTV of a childhood.
We also have the Lego store with the velvet ropes and always queued in our neighborhood mall.
Now the only observation I can say is this really only seems to work in affluent suburbs only. My neighborhood mall just so happens to be the top shopping mall in my huge city. It’s a destination for most of the suburbs and exurbs. The boutique toy story birthday present runs is usually around $50 per kid and we go to usually around 2 birthday parties a week during school year (on average). I don’t think most parents are allocating that type of budget for other people’s kids. I have 1 kid, many of my peers are doing the same for 2-3 kids and we all are varying levels of affluent by regional standards (expensive homes/cars, nannies, private schools, etc).
Part of the problem is that when Toys R Us bit the wax tadpole, Walmart jumped in and doubled or tripled the number of aisles dedicated to toys; so any "middle" suburb/city area with a Walmart already has an "easy source" of toys to grab, making it an uphill battle.
Target did the same and now has more Lego than TRU ever had, for example, though their prices are often over MSRP.
The key would be to market above both and aim for "different things" while making it a possible destination on its own.
I've never heard the phrase "bit the wax tadpole" before. From googling, it sounds like a reference to an urban legend about Coca Cola being poorly transliterated into Chinese? It's not clear to me if this is something commonly used as an alternative to "bit the dust" or if I'm missing another level of metaphor here.
It's a lot. Us parents joke how insane it all is but realistically it will taper off soon as kids start having smaller birthday celebrations. At this age it's kind of a "invite everyone in your class/grade" and has naturally reduced a bit already as boy/girl only parties started. I think next year or two it will become more common to have "invite 3-5 good friends to an event" type of birthdays and that will reduce it a lot further. Usually that's also the beginning of "drop-off birthday parties" where us parents don't have to attend with our guest. There was only one this year, my son was picked up and a group of ~10 went to a sport event.
Oddly enough, there are practically none in summer. If you have a summer birthday you either don't have a big party or you have a half birthday or something similar where the party occurs during the school year. Too many people travel throughout the summer and kids are doing different camps and things so it would not get well attended. Our group of parents kind of have unspoken rule to not do anything that feels required when school is out. That goes for fall/summer/spring breaks and holidays too.
The logistics part probably sounds crazy but probably only ~10% of these parties are at someone's house. We've never hosted a party at our house, well when he was 1-2 for family only, but not these huge parties with so many kids, parents, siblings, etc. Most people rent out a venue. Arcades, trampoline/slide parks, skating rinks are popular with the girls, sports themed places are popular with boys, chuck-e-cheese was popular for a bit, those kinds of things. It's too much work for a 2 hour party to have that many people in your home.
My birthday was in the summer. I was in the RV away from friends all summer. I never got a birthday with friends, and get this, I didn’t get invited to birthdays because I wasn’t participating in the shared economy of gift giving!
Yep, and I hate it. For our kids we’ve started just inviting a bunch of the kid’s friends and extending the invitation to each friend’s whole family and just having a chill house party. We also invite a friend’s family for the kid not having a birthday so they have at least one of their friends to play with too. Kids running around outside, inside, doing whatever they want while the parents all get to hang out and talk. We order some pizzas and other food, set out a few coolers of drinks and some adult beverages too, and it’s always a great time. It helps that the birthdays are in the fall in it’s usually really nice out still.
We also very clearly specify “no gifts”. We don’t have room for more stuff and they’ll get more gifts than they need from grandparents.
I’d say a majority of the parties we get invited to also are asking people to not bring gifts.
I think it's more scary than impressive. What kind of adults are all of those children going to grow up to and become, where multiple parties are the weekly norm?
Maybe you can clarify because I don't understand your fear or what you think it means for these kid's future adulthood?
The kids just see it as a fun 2 hour playdate with lots of friends in an interesting setting with dessert. It's the same friends they see at school, sports, etc. so it's their time to have some less structured play time, which - not sure if you've heard - is in rare supply for many children these days.
When I was a kid, even at this age, I was roaming all over town on a bike with my friends, I basically had the Stranger Things childhood experience, and I feel very confident there was a lot more to fear in that timeline of childhood.
Playing (and roaming) is great, non-stop parties is not.
Excessive partying can foster a mindset in children that equates fun with extravagance rather than simple enjoyment.
Frequent extravagant parties can foster a mindset in children that equates fun with material possessions and lavish events, rather than personal connections and shared experiences.
Not sure if the picture I painted originally was unclear but these kids are already living a very comfortable lifestyle by most standards. Most outsiders looking in would say they are all spoiled brats which is basically what I feel like you're trying to say more politely. But, this is just their norm, it's very much a part of their interpersonal connections and shared experiences which is exactly why we try to attend as many as we can. We try to engage in the community and support these kids as a group by celebrating their milestones and achievements; birthdays are one such example. What you fail to consider is these kids do not care about the material possessions at all. They've never had a shortage of that so they have no want for it. That is not special. I've never seen a kid even look at the presents during a party. They get loaded up and opened at home. I know my kid often doesn't open them for days or even weeks after the party. At this moment, he has a shelf full of toys he got as gifts half a year ago that are unwrapped but unopened. He's never even played with them. Some of them he already had and so he'll probably donate them at Christmas. However, the idea that they got to pick a theme and an venue that represents their personality/interests and share it with their friends during a day of fun is what they thrive on. Being the guest of honor at such an event has plenty of social-emotional benefits (https://pmc.ncbi.nlm.nih.gov/articles/PMC6130922/).
There's nothing lavish about these events unless you seem to think so. A $20/day trampoline park is not lavish. A 2 hour arcade card at D&B is not lavish. I don't know what your frame of reference is but this is what we do on a normal weekend if we have no plans too, just with a smaller group and withot birthday cake to eat.
Just last week, I was with one of my kids trying to kill some time before an appointment. I noticed a toy store in a strip mall, and I asked him if he wanted to check it out. His response was, "What's a toy store?"
We did check it out, and he was pretty disappointed. Even though it was advertised as a STEM-oriented store, half of it was stress balls and jigsaw puzzles.
Recently in La Jolla, where presumably you have high wealth and IQs and tourism, and experienced the same thing—mostly fidget stuff, puzzles, and Lego resellers. The kids were so excited to go in but pretty quickly realized it’s effectively just a physical Amazon home page of mediocre plastic stuff.
In the UK at least a big part of the problem for all high street retail is high fixed costs.
High rents for "prime" locations that, given the trend over the last 25 years, are no longer very prime, coupled with high business rates set by central government make it incredibly hard to make any money. And that's even before thinking about staff, where cover is no doubt needed at a higher concentration per square foot than warehouse based businesses.
Couple that with increases in minimum wage[0] and employer NI, and taking into account inflation and cost of living in recent years, and a lot of formerly workable retail businesses have simply been rendered non-viable.
I also think the UK are very tight with money (not sure about other countries). There are lots of people, according to our local Clarks shoe shop, who get their feet measured and then just buy their shoes online to save a few pounds. People do the same with anything they can try on in the shop and then order the same thing somewhere online for a bit cheaper.
The things you said are definitely making things much worse and I suspect that even back in the day when everyone bought things from the local shop, most retailers were not making massive profits so anything cutting away at that will make it worse.
Another problem with the UK retail scene is the charity shop, of all things.
It is hard to hate the charity shop as they are Mother Theresa and Bob Geldof in retail form, feeding the starving of Africa (name me one) and bringing us one step nearer to curing cancer (as if).
But, after a while, the charity tends to perpetuate the problems that it seeks to solve. So you have what amounts to a business that has volunteers rather than paid staff (forget about minimum wage), the electricity bill is at a special rate and even the products come for free, from house clearances and people just getting rid of their 'empty gifts of capitalism' (plastic trash).
The real hustle is with rent and business rates. Rent and rates gets paid but at a fraction of the cost. If the landlord kept the place empty then he would have to foot the rates bill, but get that charity shop in and the problem goes away. The landlord can then count on the value of his property going up because they don't make land any more and all capital ends up hoisting up property values, even if the crumbling 'property' was paid for aeons ago and is best demolished.
What you have with a toy shop is specialist retail, where customers have expectations of service. The staff should know the availability of every product, stock levels and much else. It is not 'pile it high' as per the Toys R Us model.
I worked in specialist retail and for a boss that despised charity shops. We were in a back alley, with a fraction of the footfall. Anyone visiting the town would see the usual row of useless charity shops but not our shop. We had bills to pay and they didn't. It was unfair.
Nowadays the High Street doesn't just have the charity shop scams going on. There is the joy of money laundering. Imagine you have a fine cannabis operation going on and you are bringing in tens of thousands a week. What do you do with that money? How do you convert it to property?
This is where the nail bar comes in to play. Or the 'barbers'. Or the 'vape shop'. Hire your immigrant labour to sell nothing all day, and you can put through all the money you want.
Then we have the Wetherspoons pub, where they don't really make money from beer, the idea is to build a property portfolio. Another hustle.
Then there are the naive hopefuls. Personally I would love to own a little shop that sold all my favourite toys that I was denied as a kid, so that would mean train sets. Or maybe I would love to own a little cafe that sells the healthiest food in town. With some lottery winnings or an inheritance, I could dive in, hire my best friends and have the grand opening.
Narcissism would mean that all the warning signs would be ignored. Pride would mean that I would be in it until the house was mortgaged three times over, with half the suppliers demanding payment up front. Every day would be praying for rain, as in sales. I would be complaining and blaming the usual suspects such as the jungle store.
There are many, many other hustles and it sometimes helps to explore a town with someone from 'the other side of the tracks'. Poor people get preyed on in ways you would not believe.
For instance, cigarettes. If you went into one of those convenience stores and wanted a packet of cigarettes, it would cost you a vast fortune, I don't know how much, but probably around £20 nowadays, at a guess. However, for our special friends, they get the counterfeit ones at a ridiculously low price.
If you were to ask for them then the owner would tell you where to go. However, if a special friend were to introduce you to the store owner, then you would be able to buy the £3 or £5 counterfeit items too. You can even pay by card, so long as you are in the club.
A certain poverty mindset keeps people from 'my special world' going back to these convenience stores to buy food and drink items that have no nutritional value apart from calories. It is very sad but you would be amazed at how much money can be made from the seedier side of the High Street.
The problem isn't with this strange underworld, it is with the people in charge. They don't have the 'speakeasy' code words needed to appreciate how it works and they haven't tried to give specialist retail a go. They are probably at a different level of criminality, with the rentier class that are the true parasites of Western society.
In the early 2000's I visited my sister's family in Australia. Hadn't seen them for a few years. I took the kids to Toys'r'us and gave them $200 each to spend. It was the best $400 I've ever spent in my life. They still talk about it.
Somehow giving $200 of Amazon credit doesn't feel the same :(
One of my daughters always asked to be taken to Toys-R-Us for one of her b-day presents so she could pick out something. Watching her walk around in wonder for an hour trying to decide was an even better present for me. I'm sad they're gone too.
I can only imagine the sheer delight in a kid that had never been to a dedicated toy store like Toys'r'us because of online shopping to see one for the first time. Sadly, many kids will never get to experience a toy store like that. I remember thinking what I'd do if I ever won that shopping spree that kids won on whatever Nickelodeon game show where that was the prize. I'd actually practice by learning where the things I wanted were in the store to be as efficient as possible.
Many years ago I found myself unemployed, and had a year where I pretty much took any job I could find. One of these were in a sorting facility for one of the largest shipping / postal companies.
On my first day, the very first thing I noticed was how a select few companies / online stores accounted for something like 80% of ALL the shipment that came through the facility: Clothes (with Zalando probably making up half of the shipments, just an endless stream of Zalando shipments...), make-up, and baby / kids toy stores. The last one kind of took me off guard, but then again, local toy stores have been dying for years.
I'm honestly not really that surprised by that. All (except clothes) are prime examples of products where you don't really care who sells it to you and how it looks in the packaging. People want a certain product and want it the cheapest. Why would you go to a real store to look at that product inside of packaging you can't open, with the added cost of the person behind the counter?
I mean a Lego set is a Lego set, whether you see the pictures on the box or online.
I am surprised to hear this. In Spain there are plenty of physical toy stores. I can easily think of a few not too far from my home. Not only that, it's also common here to see entire aisles full of toys in some big supermarket franchises, like Carrefour.
For the last few years I've been working on a project, before I buy anything online I try to find it at a local retailer (ideally locally owned). If I do find it, I pay cash. I treat it like a game, it's a scavenger hunt. I'm putting money back into the local economy, helping local shops stay open. Makes it significantly more difficult for pervasive modern surveillance to track which items I look at or purchase. I don't get any emails about it later.
The Barnes and Noble bookstore I occasionally shop at has a second floor that is about half full of nothing but games, legos, puzzles. I honestly think they sell more of that than books these days.
Their strategy is now about 1/3 of the store dedicated to toys/puzzle/legos and I think it’s a brilliant strategy. I can walk into the store, browse books while the kid is exploring decently engaging toys. It’s a win for the store and myself as I can walk out with a book or two for myself, a good potentially educational toy, and a Lego kit for us to complete together. They got us good
What country are they in? The list of shops seems to suggest belgium/the netherlands. Because in the UK, I often go to toy shops with my partner. There's probably two shops in the same shopping centre you could call "toy shops", as well as a GAME which sells video games. All three of them sell lego, as well as quite a few other shops. There's also a Cex and a mini Cex if you want to buy video games and get ripped off. Also quite a few other shops tend to have a "toys" section, such as WH Smiths or B&M, though I wouldn't call them "toy shops" At least in my area, brick and mortar toy stores are very much alive and well
The blog writer is in Belgium, just like myself. Can confirm that there are almost no brick and mortar toy stores left in my area (which from what I can tell is the opposite side of Flanders).
GAME is bankrupt and was a shit for a long time, WH Smith is also closing lot of stores, B&M is selling tat and is half empty. But none of these are toy stores.
Retail in the UK is very much dead, unless you need barber and vape shops.
Smyths toys is doing pretty well in my town, in an out of town centre retail park admittedly. It is situated in a fairly new retail park that got built exactly behind the old one where Toys R Us used to be. That got knocked down and replaced with warehouses. Must be cheaper to tear down and start from scratch than try to modernise after being vacant for a few years.
Town centre is lots of barbers, vape shops and betting shops. Few new independent bars and restaurants seem to be breaking through thankfully.
As I said, I wouldn't call any of those three "toy shops". But all three of my local ones seem to be going strong, and sell toys or toy-adjacent things
Back when I was a kid in the smallish UK city of Lincoln, we had two big model shops (tools, balsa kits, aero engines, Airfix, etc.), one big toyshop (Scalextric, and toys for young kids) and one rather weird place that specialised in fishing gear, Meccano and 00-guage railway stuff.
Now all are gone, and I do wonder how kids of today will be able (for e.g.) to experience building a glider (balsa, cutting out with a razor, tissue covering with paste) and launching the final product into the sky. We have lost something.
BTW, if any of you or your children want to get into things aeronautical I can strongly recommend https://www.amazon.co.uk/Penguin-Book-Kites-. Some string, a little bamboo or dowel, and a binbag and you are ready to go.
I don't think every old retail format deserved to survive unchanged, but towns without places where children can physically explore feel a little poorer (in a way)
I walked 20 minutes to a brick and mortar toy store to buy some bouncy balls recently. It was a chain store though. That's not sad to me, because I'm not emotional about whether chain or independent businesses do any better in a given industry.
> DreamLand: another toy store chain with venerable Belgian roots owned by Colruyt group that briefly had a fancy underground store near a new parking lot not even five years ago. Of course it had to go. […] The bigger store about 30 km away from us recently also closed down. The store chain is still alive as is their webshop, but for how long… There’s still a DreamLand nearby but no longer in the centre.
DreamLand actually grew significantly in terms of physical stores due to their merger with ToyChamp, and is present in both the Netherlands and Belgium now. Of course, these huge (for European standards) stores tend to be located in malls and such; not in the historic city centres where toy stores used to be.
I opened this comments page wondering if anyone would point this out. The idea that all sales have moved to online is always trotted out as the main excuse, but the reality is that most of the big well-known UK retail failures were caused by private equity, asset-stripping and loading them up with debt until the interest payments are too high to be payable.
I found it especially disheartening that the brick and mortar stores had to subsidize their own demise by paying taxes for roads that carry their competition who dont pay taxes.
I’m surprised physical toys are still a thing. We have a boutique toy store in our neighborhood. Expensive wooden things from Europe. I see lots of old people buying toys for grandkids. I hope they are well loved and not just tossed.
Our local toy store is a member of marketing cooperative and yours might be too.
They are wonderful and a perfect example of a local toy store - a wide variety, personal service and free gift wrapping on all purchases (a life saver for anyone with kids and a birthday party to go to seemingly every other weekend).
There is a really cool place in Denver called Wizard’s Chest. I think they make good money off costumes, but also Warhammer 4k (and to a related lesser extent DnD). Nice people, too.
Game stores tend to make money off Magic The Gathering, from my understanding. But yeah, The Wizard's Chest also has a decent miniature gaming community as well. And their board game selection is pretty good.
Interestingly toy stores are still a thing in Japan. I took my 2 year old daughter to buy her birthday present this year. Her smile when I told her she could take the toy plush home was priceless.
I asked her if she wanted the big or small version, she liked the small. Showing kids toys on a tablet is never going to replace the experience.
There are no toy stores close to me in New Zealand any more, or even a long drive away. There used to be two small ones, they were both great but never really that busy.
The local cash and carry also used to have a toy section - it was great because they had a deli where they also made coffee, a grocery section, bulk food section, and warehouse section that included toys. So we'd send the kids to the toy section, get a coffee, grocery shop. The building was a bit rundown, but that was part of the charm too. They upgraded it, it looks fancier but the toys are gone, the deli is gone, we only go for things like bulk flour now. I wonder if businesses like that have real trouble understanding loss leading sections like that.
What I did not see in the article or comments is the fact that people dictate how things evolve. People vote with their wallets (or via local councils) in ways that directly or indirectly influence the outcome. The title can also be, and still correct, "We killed the brick and mortar toy store". This makes people think more than "it's raining", which is impersonal and somewhat inactionable.
I was surprised to find that Barnes n Nobles has a decent selection of quality toys for infants to toddlers. Toys have their own section at my store. I used to buy toy/book gifts at Target but the options are so much more limited.
In Austin we have most notably Terra Toys and Toy Joy.
Terra Toys is 50 years old, its space shows it. Hand-written recommendations and prices. The employees demonstrate and play with the toys, welcome you genuinely as you enter. The toys seem curated for actual fun not schtick. I went in last week and it was popping. It’s an experience.
Does Main Street need to focus on experience to survive? If so, how does it monetize experience if selling items isn’t the first focus now?
I miss toy stores, butcher shops, record stores, movie renal stores... everything moving online has really made culture so isolating and a lot harder to meet people. I remember when I was younger I could just go to a retail area and get some coffee, look at magazines/books, then go to a record store, then a video game store, a pet store, etc. Now everything is either a big box store in a giant parking lot or online. There are obviously exceptions, but I remember having so many more retail options and now they can't compete with Amazon and the rising cost of real estate and labor. Capitalism is strangling culture and making people more lonely and anti-social. They want us at home, buying subscription services, and getting taxis for our burritos so we don't have to actually go out and do anything or see anyone...
> Capitalism is strangling culture and making people more lonely and anti-social. They want us at home, buying subscription services, and getting taxis for our burritos so we don't have to actually go out and do anything or see anyone...
People are choosing in large numbers to buy subscription services, order food online, stay at home, and avoid socializing with other people; and the market is supplying demand. This isn't something that some external power is forcing on an unwilling populace. Indeed, if you think that people are systematically making consumer choices that are easy and convenient in the short term but bad for the fabric of society in the long term (a common-enough complaint about human society), then the "they" who wants to force people to change their habits en masse is you.
Agree, it's almost entirely about profit and convenience but I just think there's something false about modern 'convenience' in that it actually isn't 'convenient' when you think about all the other things you lost. The tiny bit of friction exerted to actually go into a store is now gone, but now you lose the opportunities to meet other people into the same things as you... get tips from retail workers on interesting movies/music/video games. It's convenient in that one singular moment, but now you're lonely and have no friends or connections... I think that's why people are more depressed and on more depression medicine. There's a lack of just casual interaction and socialization now that we're replacing with 'social media' doom scrolling and it's clearly not making people more fulfilled--just more convenient.
I would argue a lot of this could be changed by better zoning laws and better city planning. Big box stores should be relegated to the outskirts of city limits... let local and small businesses have downtown areas. Otherwise, everything is becoming one homogenous experience across the entire country.
I think this also speaks to the heart of the non-political spectrum between "conservative" and "progressive" societal evolution. It's progressive to enact these kinds of changes in the name of supposed convenience, efficiency, and modernity (whatever that means), and to do it quickly without sufficient thought as to all the unintended consequences. It's conservative to fear such changes and try to slow them down for the same reasons. Rapid societal changes are always risky, even if we suspect they may be net positives.
Yes, in the city were I grew up a single private toy store is hanging on. I think it is because they out right own the building they are in. But we all know their days are numbered.
It is too bad, they were real good and carried items that could not be found elsewhere. Now seems all stores are the same.
Edit: Looked it up, the store stopped selling toys all together last year. But they are still in business selling other items that were in a different part of the store.
Capitalist efficiency ultimately makes shops barely able to compete on price and convenience with the few clicks needed to order and get stuff at home.
My stepfather was a salesman/distributor, selling the most diverse things (mostly electronics and mobile-related, but not only) to shops in the entire Lazio region in Italy.
95% of the shops closed, even among those that didn't he often wonders why they keep buying from him rather than on Alibaba or Amazon where he often cannot compete on price. And same for those client's customers.
It's hard to beat the convenience of online ordering for them, let alone the pricing.
But this has major implications for the local economies, especially of smaller places. As shops start to disappear so do the services or restaurants/bars connected to them.
Capitalism is brutal in its efficiency and there isn't much if anything that can be done to stop it, if people can get the same products at lower prices, they will.
I never really liked those small shops. Open Monday-Friday from 9 to 17 so a working person cannot really buy anything there. Prices usually 20% higher than online, minimal choice. It's not like they were selling something unique, they'd sell exactly same shit you'd see online, but at higher prices. The concept of "small shop being a part of the community" is completely foreign to me because what else you'd be doing in a shop other than walk in, buy, get out.
Supermarkets on the other hand, that's a different story. I live in the Netherlands and here we have strict laws pretty much about anything, including supermarkets. The goal is to prevent megastores from coming to existence which usually suck up all economic activity from the area. I have to say that the model is relatively successful - there are lots of mid-size supermarkets, so wherever you live, you're likely close to one.
But I have to say that it's another thing I miss from Poland. I fucking LOVED megastores. I could easily spend an hour walking through the cheese aisle and looking at all the products. For some inexplicable reason, despite the existence of megastores, the chain of small convenience stores Żabka is going through a renaissance - they're almost at every corner which means that if you're walking down the street and you're suddenly thirsty you're almost for sure close to Żabka. Another reason to go there is that they often offer products unavailable elsewhere - once I found sugar-free orange-vanillia coca-cola. I knew that god smiled to me that day. Oh, and typically they're open until 23:00.
My local toy store has a resident dog, and allows other dogs inside. That place serves as a dog toliet, and dog hair, saliva, oils and excrements are everywhere. I refuse to go near it, purchasing any contaminated toys is out of question!
Last time we went there, owners assaulted my child and knocked it onto the floor!
I own a reasonably well performing indie bookstore. I've noticed for the model to work you need a critical mass of other local shops clustered to make the trip an experience for families and diverse tastes. My working theory is that three of such small businesses are sufficient and could operate well with a common inventory strategy and manager (e.g. a bookstore, a toy store, and a tea or candy shop...nothing that spoils in the very short term). When I've got a bit more time I want to try that idea and see if it works as a way to revitalize otherwise charming old downtown areas with vacant retail space and communities wishing to bring back their main street. Giving this idea away in case anyone else has tried or wants to try sooner than me and report back.
The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work.
However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.
High commercial rent affects not only diverse businesses (good ideas that take risks) but also the quality and accessibility of goods of necessary businesses. Near me, simple mens' haircuts have soared to $35+... Except those shops that have been around for ages and own their buildings. They still charge sub $20.
Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/
A good haircut takes about 30 minutes. So if the barber is getting $20/cut that's $40/hr gross max assuming he's booked solid every day (most are not). From that they have to cover the rent (or property tax, insurance, and upkeep if they own the shop), utilities, scissors/clippers and other instruments, consumables, their own self-employment tax, health insurance, and retirement. That doesn't sound like it would leave much.
It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.
AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.
Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense
We had this experience with a local town centre where the high street basically died. Retailers priced out by high rents, which was fine when the economy was good and people were spending, but as soon as it took a dip there was nowhere to go and they had to shut up shop.
And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.
That seems like a rather inefficient use of resources. How long will a fund typically keep that on the books before they have to offload the asset or declare bankruptcy? At a certain point, that smells like a scam with a real estate business attached to it.
Commercial real estate lending typically has a clause that allows pausing of payments during a vacancy and letting the interest accrue into the balance of the loan - effectively, the banks are giving the property owners a free option to try and get the vacancy cleared without affecting long-term incomes and asset prices.
That still sounds like a scam.
More like poorly structured loans and incentives.
Money laundering? https://financialcrimeacademy.org/real-estate-aml-red-flags
Seems there's ALWAYS some from each column...
Yeah, it's a big high-stakes game of musical chairs.
More like a game of Hot Potato.
Ironically, this is one of the strongest proofs that American society is very un-capitalistic.
Shareholders, who would have received the dividends from rent payments otherwise, simply go pound sand when this happens.
Even though there should be plenty of shareholders willing to accept lower asset values in exchange for continued, reduced, dividend payouts.
I think that about nails it for most commercial real estate.
> That seems like a rather inefficient use of resources.
Inefficient for society? Yes. But for the capital providers aka investment (and let's be clear: retirement) funds and banks? Definitely not.
The fundamental problem at the root of all of it is how the US does pensions. In contrast to most European countries that operate in a redistribution system, aka the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves... which leads to a constant influx of cash into all kinds of asset markets, no matter the market conditions.
And that is bad, for multiple reasons.
- it ties general economic downturns to people's pensions. That in turn factually prevents politics from doing what is right (e.g. restrict climate gas emissions), because a lot of companies make a lot of money by abusing the environment and cracking down on that would lead to them losing value.
- it creates a lot of perverse incentives. When you got almost 50 trillion dollars in total retirement funds [1] with hundreds of billions of dollars in new savings each year... that money has to go somewhere where it is backed by a physical asset or a consumption in the end. A lot of that money ends up in government bonds, which "allows" the US to cut taxes for the ultra-rich without limitations and balloon the national debt without consequences because guess what, the US can "always" borrow money. It's just as bad as Japan, only less openly exposed. What does not end up in bonds ends up primarily on the real estate market, driving the nonsense we're discussing here, and what remains goes into crap like Yo [2].
- it disincentivizes the forces of the free market from holding bad actors accountable. Under "normal" conditions, the AI bubble or Tesla would simply have run out of cash years ago because no one would give them more money, but when the scam is so large it ends up in the S&P 500, cash will flow in automatically from all the dumb money that is going into ETFs and other pension investment vehicles. Once you are in, you stay in.
- To make it worse, people are increasingly going from "moderate" managed funds to the extremes: either purely tracking funds that have virtually no fees deducting profits (and, in exchange, do not exercise voting rights) or into high-yield "activist investor" funds that love to do exploitative shit like forcing companies to redistribute their liquidity reserves as dividends (robbing the company of resilience against economic downturns) or engage in LBOs, buy-and-break-apart schemes and the likes. These almost always offload the consequences of making money for investors onto society at large... like, for example, malls falling apart because anchor stores fell victim to the vultures. Toys'R'Us is one particularly nasty example.
> At a certain point, that smells like a scam with a real estate business attached to it.
The entire pension based economy in the US is the true scam - in the end, it's all IOUs just like our "pension points" in Europe. If there is no economy around due to demographic collapse or whatever, the IOUs become just as worthless.
Normally I wouldn't even care, but unfortunately, the US pension market is so large that a lot of dollars flow out elsewhere, including our healthcare system, and I'm sick and tired of American vultures buying up everything in Europe Just Because They Can.
[1] https://www.ici.org/statistical-report/ret_25_q4
[2] https://en.wikipedia.org/wiki/Yo_(app)
> most European countries that operate in a redistribution system
The Netherlands does not. [1] It is also considered one of the best-run pension systems in the world.
> the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves
US Social Security works in the manner you described - current workers pay for current pensioners. This doesn't work great as we already know.
Making assets instead of workers pay for pensions isn't a bad idea per se. It makes no sense to load workers down with taxes to pay for seniors. The math only works as long as the population of workers grows or if you tax workers more and more.
Workers' labor produces ever-increasing surpluses every year. Use those surpluses aka higher productivity to support seniors.
1. https://ec.europa.eu/finance/docs/policy/191216-insurers-pen...
Americans save at a much lower rate than Europeans (5% US vs. 15% EU), which I think makes your whole thesis backwards. Maybe Americans SHOULD be saving more for retirement, but they aren't!
The flip side is redistributive pensions require an ever growing population and most European pension systems will go bankrupt within a couple of decades given current birth and immigration rates.
> The flip side is redistributive pensions require an ever growing population
Stonk market based pensions require that as well! Someone has to work in the future and earn dollars so that he can give me these dollars for my stonks. And that falls apart when the working population drops - either due to demographics or because the world splinters apart and the age of global trading ends. Stonks are just as much IOUs as "pension points" are.
And no, automation isn't a panacea either, because an economy not just requires workers to do work, but also people having money to buy things - that's already setting our time's economy on fire as more and more people have to expend more and more money just to make rent.
> And no, automation isn't a panacea either, because an economy not just requires workers to do work, but also people having money to buy things
Automation is the whole reason people have money to buy things. Before we had automation everyone lived on farms and sewed their own clothes. Only noblemen could afford to pay for clothes. Your intuition is plain wrong, I'm sorry.
AI may take away purpose if it takes away literally everyone's jobs. The wealth and productivity of the economy doesn't go away. It becomes more concentrated. De-concentrating it is a political problem.
There was a lot of anxiety in the US over Japanese buying everything up in the 80s. Just wait it out. The US will collapse its economy like Japan.
Japanese bought Rockefeller Center in New York City in the 1980s.
That was when it felt like we were "Turning Japanese". It was great and scary and crazy and we wrote cyberpunk stories.
The argument that letting people invest their own money leads to a distortion of asset markets is the most amusing thing I've read today.
Pensions are not investment funds (for the individual employee/retiree). They are distinct from 401ks and their ilk. GP explicitly spoke about "pensions", which have almost no requirement to diversify - at least one I know of was discovered to be "invested" in luxury rugs and furniture for the CEO (Their value will go up!!! /s).
This is broadly accurate, but it can be a little easier to point the finger at the actual culprits, which is Wall Street.
The problem is the financialization of everything, and the insistence on ensuring high rates of return above all other goals. Which is highly related to the dynamics that you mentioned here, so we're agreeing.
But other countries don't do this because the government stops them. In this country, the financial sector is more powerful and can override democracy through a couple of obvious means that we've all seen.
The result is effectively the plundering of a previously strong economy for the benefit of a couple of people.
Ask yourself why General Motors is taking the many billions of dollars in cash that they generate from their business operations and literally sending it directly to Wall Street bankers through the form of stock buybacks rather than investing in the next generation of electric cars. It's an obvious mistake, and eventually the bill will come, but maybe not in the lifetimes of the people who profit from it. Certainly not before they have a chance to buy another summer home.
China doesn't do this. They keep savings rates high and returns low, which means the money goes into building factories and infrastructure and lots of other things that ultimately make the country much, much wealthier.
> Ask yourself why General Motors is taking the many billions of dollars in cash that they generate from their business operations and literally sending it directly to Wall Street bankers through the form of stock buybacks rather than investing in the next generation of electric cars.
Hmm, putting aside others issues (e.g. stock-manipulation to make quarterly numbers) stock-buybacks might be viewed similar to repaying a loan and reclaiming the stock that was put up as collateral...
Although I suppose if the loan is zero-interest, why would one want to do that? Even if somehow all spending options are terrible today (but might improve tomorrow) one could just sit on the cash.
All spending options are not terrible today. That's the point. Without reinvestment, the companies will fall behind and die.
The decisions by major companies to prioritize stock buybacks over capital investment in the next generation of products and innovation is the absolute core of why the financialization of everything threatens to destroy us as an industrial economy and, by extension, our prosperity and way of life.
> and I'm sick and tired of American vultures buying up everything in Europe Just Because They Can.
Here in America, we're also sick and tired of vultures buying up everything just because they can.
>AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.
Well, if the town is dying, the "value of that building" is effectively cut in half, or worse, anyway. Asking a lot for rent is not gonna magically make the building worth more - it will just keep it unrented.
It's not just accounting, it means enough things that they're incentivized to manipulate it upwards. It impacts the loans they can get and the interest they pay, enough that it may be worth it to forego some actual income to keep the fake numbers up.
But at some point it has to collapse, it seems to me. You can't forever fake a high value on a property that is bringing in no rent. Unless the real value is just being a outwardly legitimate-looking place to park money.
And they’re often owned by funds that are measured in the billions. A parking lot in New York covers for a bunch of empty middle America storefronts, as long as the valuation works out on paper.
It seems that approach is a way to generate losses without actually losing the titles. These losses are needed to offset incomes elsewhere thus not paying taxes on profits.
Investment fund's commodity is value - the rest are just tools to optimize the value.
In aggregate, the owners of these properties are investing to earn a return. Losses only lead to "not paying taxes on profits" if there are no profits. The overall portfolio has to be earning a risk-appropriate return or investors will go elsewhere.
Accounting rules allow you to extend and pretend which is common in commercial. Because loans are sucuritized by other assets there can be a lot of different assets that could all suddenly become distressed just by pricing down rent in one building
I’m not sure if the explanation in the second part holds water. Wouldn’t the reduction in property value be the same as the ammortized free rent?
No, because the mortgage companies' valuation is based on rent and does not consider any incentives.
Right. . . but isn't that just obviously stupid? If I say the rent is $3k a month but you get all 12 months free, why would anyone be fooled by that? Why would you base it on some hypothetical rent rather than the amount of actual money that the property takes in?
It is stupid, but every party involved benefits from playing by the stupid rules, so they keep doing it.
If the lender insists the property be valued based on actual collections rather than hypothetical collections based on the rate once discounts expire or the asking rate if vacant, then they will have a loan where the borrower is underwater and that's going to end up as a loss on the bank's books.
If the borrower values it factually, they will be underwater and likely have to sell for a loss or be forclosed on.
There's also portfolio effects. If rent drops are acknowledged in one space, nearby spaces may also acknowledge lowered rents and most banks have lots of loans and many borrowers manage several buildings.
The bank knows but they maintain the fiction that they don't because their books collapse too if they count those. Banks make money from loans.
Don't forget this is typically a short term things. When the economy improves the building will be rented again. So they need the books to look good today to get through.
And commercial loans are NOT like your home mortgage. One you got your home loan, the bank no longer cares (or even can care) about the value of the house, only if you’re not actively destroying the property and maintaining insurance and paying on time.
Commercial loans are often shorter duration and roll over and highly tied to the valuation of the property or properties, and often have clauses allowing them to call the loan if valuation dips too much (think: margin call).
No. Not if the valuations and downstream effects of valuations are formulaic, which they often are.
> devastating for someone with a loan
Sorry, I can't understand why. Could you please expand a bit?
I don't get how decreasing the value of the building makes the loan more difficult to repay.
Loan to Value (LTV) is a percentage that tells you how safe a loan is. You divide the amount of the loan by the value of the building. So if I buy a building for 10 million with a 6 million loan and 4 million of my own money then I have an LTV of 60%.
This means if I go bankrupt then the bank can sell the building and get its money back.
If the value of the building halves because the rent halved then I have a 6 million loan on a 5 million building. My LTV is 120%. The bank cannot get its money back by selling the building.
No bank is going to give me a loan on a property with an LTV of 120% so I’m stuck with my current bank. My current bank then increases my interest rate because I am now a very high risk customer who can’t leave. This is very expensive for me.
One way out of this situation is to get my LTV back to 60% which means I need to reduce the loan to 3 million by finding 3 million to pay off part of the loan.
Another way out is to sell the building for 5 million then pay the bank one million, exiting the deal with a loss of 1 million.
None of these are good for me. I’ll do anything to keep the value of the building high by charging high rents even if no one can actually pay the rents and the building sits empty.
Long term I might be able to exit by getting permission to convert it to flats.
Don't forget that long term the current downturn is likely to end and so I will again be able to get the rent in a few years if I can just hold on for these bad years.
... which sort of assumes that the global downturn and the local downturn are completely unrelated.
Like, if a rent hike pushes out the tenant who has been there the longest, who has the most consistent revenue stream, in other words is the surest bet, then that, all by its lonesome, should be a pretty clear risk indicator to the bank.
So how long can you collect $0 of rent on your $5000 building before the bank realizes?
Sounds like a solution would be to average rent prices over some period of time to account for rental market fluctuations.
The commercial market is functionally frozen and illiquid. Owners can’t come down without declaring bankruptcy, bankruptcy is bad for lenders because they can’t move the property for the loan amount so you essentially have a mass delusion because accepting reality would bankrupt much of the existing players and start a crisis
The backing of the loan is in part based on the value of the asset, so you need to add collateral to accommodate a reduction in the asset value.
Basically you have to pay a lot more if the building value goes down
I hear people say this a lot but it doesn't make any sense. Why would the value be based on some imaginary rent rather than the actual amount of money taken in? It seems stupid for anyone to say that asking, say, $2500 rent with three free months (giving $27k for the year) is better than just asking $2000 with no free months (giving $24k for the year). If this is really what is going in then the system deserves to crash.
It’s just how commercial real estate is valued. It’s very formulaic based on the local multiplier of rents. It even applies down to single-family homes but those have competing buyers (families) - but in pure commercial you are the multiple of rents and basically nothing else (save in the strange case of someone wanting that particular property).
The key is home loans for normal families can’t be called - commercial loans can.
Even in the best of times you will have empty places so they have to ignore unrented places since there is no formula that can tell the state of the economy from just current rent. Real estate is always local so even in the worst economies there is always some place booming
Your suggested alternative generates a need for massive accounting by the banks, tracking each loan's aggregate monthly rental income.
A simpler rule that mostly covers today's problems, and adds very little overhead after the loan is signed, is often considered good enough.
It’s probably a bad rule in retrospect but to reprice now would be devastating
i don't know if it's the same everywhere, but in my town there's essentially no taxes on vacant commercial buildings. the tax rate is based on the use
and so landlords who own a whole bunch of properties would much rather a unit sit empty for a year than lower the rent to fill it, becauase it costs them basically nothing and lowering the rent on one unit might have a cascading effect that lowers the rents on all their other properties.
I see this also, but I don’t get it. An empty building still costs a bunch of taxes and upkeep and still rapidly deteriorates without tenants looking after it. Aren’t these people hemorrhaging money? What do they have to show for it? My city actually handled a majority of the rent so a business could revitalize a large-ish property that had been empty for years. Of course it failed as soon as that deal ran out.
As I've said elsewhere, when the economy improves it will be rented again.
If.
And for how much?
The system is a formalised version of "Don't tell the Tsar bad news."
Everyone has to pretend Better Days Will Come™ while the economy saws through the branch it's sitting on.
It works until suddenly it doesn't, and the banks demand a bailout.
The economy has always had ups and down. While that is no guarantee, it is a strong sign. Inflation means that rent will get cheaper in real terms just staying the same. Things will be bad - again - for a few years, not that is nothing unusual.
Of course real estate is very local. There is a big difference between property in a growing city and land in a rural small town.
> and the banks demand a bailout.
Which will certainly be granted and thus Better Days *WILL* Come, at least in the localized "I'm taking practically no risk" sense.
So what is your solution that is impervious to a permanent or lengthy and gigantic downturn in the economy?
Except we have the entire commerical business districts of small and mid sized cities destroyed from these practices and there is often no bouncing back from that. Oops.
I think for businesses that own multiple properties, they can claim losses on vacant buildings to offset their taxes in other profitable ones.
land value taxes would fix this. is too cheap to sit on derelict property
I don't think it's that simple. If the property is abandonded there's nobody to collect any taxes from.
It's because commercial property is bought and bundled up into REITs and they would rather have a property go unleaded than to lower rates.
When the capital owner has thousands of properties, why spend energy on optimizing a few to make cities more liveable?
Consolidation, as always, is eating the society like cancer.
If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.
The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change.
Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.
You’re right but it seems like the exact opposite scenario is usually in effect.
Particularly in the UK, landlords seem stuck in some kind of bizarre logic of “oh, nobody can rent my building, it just has to sit here being worth nothing” and “oh, you want my worthless building, then naturally I’ll need ALL your profit and more.”
There are accounting practices in place where a property value is set based on rents and that value isn't reset when a unit is vacant, but it IS reset when a new lower rent is in place through various mechanisms of valuations.
Force taxes on average use. Force empty stores to subsidize existing ones.
You don't think that corporate weasels have a way to avoid the tax?
In Nevada, if you have a gaming license you must "use it or lose it", and for this reason, sometimes 24-hour "casinos" pop up in vacant buildings, just to operate the minimum number of hours to keep the license. Like one day a year.
If you tried to implement a vacant property tax they would set up the most pathetic minimum-compliant "business" you could imagine. "Golfball cleaning, $3.00 per ball, open 1-4pm tues-friday".
A Georgist LVT would fix that is short order. Start making owners pay compensation for keeping a valuable space empty and crumbling, and you'll see them step to it pretty quickly or sell it to someone who does.
If it's empty and crumbling, I doubt it's all that valuable to be repurposed for housing or anything else. I did note the other day in the very small downtown of a nearby minor city that the the ancient travel agent is now a party supply store. But, really, there's not a lot in that downtown.
The point of LVT is right there in the name: it is the land that has value. "Location, location, location" is an old cliche for a reason.
If you let your property go empty and crumble, the Land Value Tax is there to provide the incentive for you to either fix up the property and actually use it, or sell it to someone who will.
What if nobody wants to buy it and you can't pay the tax?
This is essentially saying "There's no hope; no one will ever return to downtown, no matter what!"... in a thread trying to find ways to prove that wrong.
Though I am pro-LVT, I don't think this will help in the current situation.
The owner, the bank, and the city all wish to maintain the illusion that a $10M building from 2010 is still worth at least $10M today, even vacant. No party wishes to realize the loss in value. Occasionally, the city may try to punish vacancy with a tax, which is still about additional revenue and not about realizing diminished value.
Your comment makes me think of this recent post, https://laurenleek.substack.com/p/the-basket-and-the-booza, from an always wonderful blog which looks at why Australia has far more independent stores left compared to English cities and comes to a surprising conclusion:
"The unifying claim is this: chains follow legibility. A city becomes legible to a site-selection algorithm when it has been organised into walkable, transit-connected high streets with predictable pedestrian volumes. That legibility is what good urbanism produces and simultaneously what makes a city capturable."
Not sure if this is an issue of Australian English vs American English but this is way too jargon-laden to mean anything at all to me.
Oh sorry, the pull quote does seem nonsensical by itself. It's well down in the conclusion of the article which, while written for the semi-layperson, is very heavy on the data science. Essentially it means what we currently think of (for good reason!) as good urban design makes it easier to analyze an area to optimize for profitability.
LLMs can do English-English translations.
I take my two little ones almost weekly to our small downtown area. The trip is usually a coffee shop, the bookstore, and a rotating third one (sometimes a candy shop sometimes the toy store, sometimes something else).
Anyway, we're an N=1 confirmation of that theory.
In our case the coffee shop is in the bookstore and it is located right in front of the third. The third is a really nice park (think lake and lots of playgrounds plus activities).
This makes a lot of sense from my own behavior. If a downtown has multiple places to stop, I am far more likely to go.
Better yet if it has attractions for both my wife and me, then we are both more likely to go.
Even better - if it has attractions open at different times of day - morning - errands like hardware shop, foods basics | afternoon - cafe, prepared food, more retail shop | evening - sit down dining, bars, checkout a book store.
It's always weird how some downtowns only cover a slice of this and as a result are dead after 6pm.. or don't come alive until 5pm.
(In slight contrast to my other comment) I think Larimer Square in Denver is trying to do something akin. There was a land-edge-lord kerfuffle and gone are staples like The Market and Ted’s Montana Grill (RIP, I was also just in Bozeman). rn one side is bookstore - jewelry & artsy - African jewelry & artsy - Rioja (Denver famous food) - John Fluevog (Vancouver shoes) - Osteria Marco (Denver less famous Italian) - Van Leewuen (NYC ice cream). I hope it all works...
now, bookstores here are a whole other mess. two words, Tattered Cover. there are ample used bookstores, though, i found a copy of Alinsky’s Rules for Radicals for $6.50 on Colfax that should probably be handled with BSL-3 precaution which is as it should be
I know someone who used to manage department stores (one branch at a time, several locations). He talked about clusters in a very similar way: Stores need nearby other stores to be attractive.
> a bookstore, a toy store, and a tea or candy shop
This was Borders and B&N, in their prime. A one stop shop. They had a childrens area with books and toys. They had a coffee bar. And of course books.
They still do where I live. Its rather nice but seems to be rotting a bit as every time I go there the kids section is clearly not cleaned or well maintained.
That still is what B&N is like.
I didn't realize there were any left. Both closed up here years ago.
This is a timely comment for me. I have been doing research on opening a small indie (new/used) bookstore in a small old downtown I walk through almost every day. It has restaurants, specialty shops, coffee shops and a small local grocery store. I've always thought it was missing a bookstore.
Any tips/warnings that might not be immediately obvious to a hopeful bookstore owner? Do you think there is a sweet spot in terms of square footage of retail space? Margins are low so do you supplement with sidelines/events/memberships?
One of my next steps is to join the ABA as a provisional member to get access to their new bookseller guides.
I'm just an internet commenter who knows nothing about running a retail store and has thought about a bookstore as well. With that out of the way, finding high margin items to sell to offset low margin items would make sense. I think this is why you see coffee paired with bookstores, coffee should be high margin but might also require food licensing/inspections.
Ideas for a local bookstore: seasonal and local items for sale, think gift giving timeframes - mothers day, fathers day, end of year holidays. Items like unique greeting cards, calendars, custom gift wrapping, having a kids section with higher margin items kids like - toys, trading cards, etc. Also you could throw some checkout friendly things like book lights, book marks, candies, etc.
If you find local craftspeople, offer some shelf/floor space for free if you can agree on a split of the margin. Hand-crafted things would pair well during holiday seasons and advertised properly might get repeat visits and word of mouth spreading.
I suspect, particularly for toy stores, there's also a weird incentive: if they stand alone, you don't want to bring your kids there because it's only going to cost you money. But if they're next to other shops, you can send your kids there to entertain themselves, while you can browse what you actually want to see in peace.
I have seen bookstore (second-handed books) thriving near universities. Your idea is actually very interesting and remind me of the mall model -- the mall model worked because everyone in the family gets his/her own share of pleasure. Of course the traffic matters a lot, too. Hope you start that experiment soon and succeed!
Universities are effectively ultra-anchors. You have large numbers of students from mostly middle class backgrounds, many of whom have free time and disposable income. (Or at least they're not worried about their loans yet.)
And then you have the academics. Tenured profs are relatively well paid. Adjuncts/assistants not so much, but they still like nice things.
The UK's public school towns (Marlborough, Harrow, Winchester...) often have a prosperous independent store economy on a smaller scale, for the same reasons.
Clusters work well in these towns.
If you try them elsewhere, like one of the UK's many run-down towns, they're more likely to fail because the prosperity just isn't there.
The general theory of most malls was that you had anchor stores. My local one has a couple of stores adjacent to the mall (a local chain supermarket and and Home Depot) that are very busy, almost too much so. The mall itself is pretty much dead and has been on the market for ages. The anchor stores--JCPenney, Sears, and Macy's are all long gone. Haven't been in the actual mall in ages but I assume it's pretty sad and there seem very few cars in the lots.
Oh, yeah, the Toys 'R Us in the complex is long gone too.
I'd be curious to know if you consider a Lego store a "toy store". There's one that opened in my city fairly recently and is in an area of smaller boutique shops (kind of like what you described).
Tsutaya, a Japanese dvd rental store has a specialty shop in Hiroshima. It’s best described as a library hosting a small electronics store, a clothing store, a stationery shop and a coffee shop.
So basically a tiny mall?
I can't comment about the minimum number of stores, but I do think its the correct idea. I live in a town of ~12000. We have 6.5 bookstores (including the good local thrift store as .5). Stores/restaurants do turn over fairly regularly, so its still tough, but it certainly seems viable. We get a good number of tourists, which helps but I do think you need a mix of restaurants, and a mix of different types of stores. Even as you go to nearby towns with big box stores, they all have downtowns that are doing ok with locally run businesses. Notably the downtowns all are small business focused with few if any box stores
This strategy has worked well for both Shakespeare and Co. in Paris and Shakespeare and Sons in Berlin. Books + Bakery + Coffee. Both of course are set in living pedestrian cities. https://www.shakespeareandsons.com
I can’t comment on the shop in Berlin, but the one in Paris is a special case. It’s in a relatively central location in a 11M people metropolis, right on top of a major rail and metro hub and across the river from one of the most touristic monument in the world. And even though it’s not really in a shopping area, there are dozens of cafés within 2 minutes on foot. They don’t really have problems getting people to go there. Plus, considering how long hey’ve been in business, I assume they own the building, which shields them from the rent issue. They could still face problems (like Gibert next door that closed somewhat recently), but their situation is very different from the vast majority of shops in normal European cities (including the UK).
Yeah, I walked by the block-long line of people a couple months ago and pretty much crossed it off my mental list. Didn't need another physical book and there is no shortage of cafes in Paris. Also didn't even make a special trip there. I like to stay in the Latin Quarter and happened to be walking by.
I agree it's not exactly the random indie bookstore though as it's probably listed in every Paris guidebook.
It has not worked for Borders in Palo Alto.
But that was a chain, maybe other locations forced closured everywhere, and that Borders could have survived. I doubt it, however.
What about the situation where a bunch of flower sellers end up on the same area of town?
Hotelling's Law (also known as the Principle of Minimum Differentiation or Hotelling’s Spatial Competition).
I always wanted to open an indie book store + coffee shop and had a similar analysis. I read recently they are having a come back.
Barnes and noble is opening in my city after a decade ago books a million closed and our local indie closed during Covid.
kids don't want to browse amazon. =)
Aside from the fact you would have to be nuts to buy kids toys (or anything that must meet a safety standard) from Amazon.
... yet some people still do.
That's the overall premise of shopping malls.
Get 2-3-4 highly attractive shops that people go to (in Europe, Zara is an example) surrounded by shops that would otherwise die without the proximity/clustering.
Yup, that's why molls were so successful. They were deteriorating because of Internet, as a new "moll", covid speed up the process. But, frankly speaking, molls also killed many mom & pops shops scattered in the cities. So this is just evolution, I am not sure if it goes in the right direction, but consumers have the last word and they have spoken, even though, in the long run it hurts them.
moll | mäl | noun informal, dated 1 (also gun moll) the female companion of a gangster or other criminal: I'd rush the money over to his moll. 2 a prostitute.
I think you probably mean "mall".
So there are a few versions of this.
The most common in the US is the strip mall. This is a largely American, soulless construct of commercial space with parking out front, typically on a major road. There are lots of reasons why this flourished in the US. It's a symptom of society being so car-dependent, which is by design. Rents here are typically lower than other options so some businesses can survive in strip malls that can't elsewhere.
The next step up (density-wise) are actual malls, or shopping centers for the non-Americans. There are different versions of this. You have the entirely indoor mall. You also have other anchor stores that pop up nearby (eg Home Depot) that are popular but can't justify the mall rent costs. Often a bunch of other businesses will sprout around these stores, which is why they're called anchor stores. Anchor stores are also things you generally need in a mall to bring in enough traffic to make the whole thing economical eg supermarkets, department stores. Malls in general have been dying in droves. Basically too many got built in the 1970s through 1990s and online shopping is killing them. There are photography and video channels dedicated to exploring dead malls.
The third rarest option is the walkable district. This is generally the downtown of cities that existed before cars. People generally love these but public transit is an issue. Americans always want to drive even when there are viable options otherwise. That means having to build parking garages and the whole thing kinda falls apart. Or at least it losses some of its charm. The hellish end of this spectrum is Houston.
Some cities have managed to rejuvenate such areas by diverting traffic and generally investing in the area. But what tends to always happen is that businesses will rejuvenate an area and then the landlords will kill it by charging exorbitant rents. I've seen 40+ year old restaurants close because of rent hikes in areas that only really existed for that restaurant.
This is part of the problem with housing being so expensive. It makes everything expensive. That local shops? Well it costs as much to build as a house and a house is easier to sell. But a cafe or a bakery or a bookstore or some other eclectic shop can survive when the rent is $20,000/year. You don't need to pay staff as much when houses cost $100k not $1M. Expensive housing just strangles everything. But when that rent goes to $200,000 over a decade well then suddenly only chain stores and big box retail can survive there so what was once a charming downtown turns into Chili's, a CVS and a Chase bank.
So this can go wrong even in dense places like NYC. There's a real issue right now with so-called "zombie leases". Basically, companies like CVS, Duane Reade and Walgreens signed high-rent long-term leases but then decided to close the store. The store remains empty because the owner has no incentive to rent it for a now-lower market rent while the billion dollar company is still on the hook for it. Enough of these and a street can look abandoned.
I really think that when cities choose to rejuvenate an area they should acquire all of it first. Eminent domain, baby.
I saw a Tiktok awhile ago where someone posited that things we once took for granted get taken away from us and sold back to us. The specific example was walkable cities. That used to be the norm. Now it's a luxury. We can't have that. If people walk everywhere and take a train or bus well then they might not buy a car. Then they'r enot buying insurance and gas and maintaining it. Unacceptable.
Society really is getting dystopian.
I think it should work like this: government buys everything zoned as a store, restaurant or pub at a deliberate unfair rate. Create A budget for maintenance.
If you want to open a store you wait for a vacancy and apply. Citizens may vote for the applicants, the closer you live the more weight the vote has.
Count the store visitors and set some reasonable minimum. They don't have to buy anything. To much traffic would give priority for a larger building.
The first n square meters is free (smallest building). Low rent for anything above.
People want a tea room but you can't survive doing that unless you price the hot water absurdity. You can have lots of small shops selling eye candy. They don't have to sell a lot of wooden dragons, as long as it attracts visitors it's good to have.
It will be a town or city in the least boring percentage.
I live in a town of fewer than 8k people. Our local toy store is not only thriving, it’s central to the community.
People would rather shop there than go online. Why? Because they are a part of the community.
At every farmer’s market or community event they have a booth giving out free glitter tattoos to children, and they employ several teenagers part time to wrap gifts (of course this is free too), apply tattoos, and help out in the store.
This isn’t a unique concept. Going the extra mile and doing seemingly unreasonably nice things wins you customers and loyalty.
This is awesome to hear about. The community aspects (both being part of the community and building community) can't be understated.
Thanks for sharing!
It would be great to have a "rural revival" where it's worthwhile to go back to the howling old owl in the woods, hunting the horny back toad.
Maybe the wave of AI layoffs can actually make that happen. We would need a visionary planner like maybe Christopher Alexander and then an administration to deeply care and support such a development.
I suspect if I were forced to make such a move, I'd be initially very upset, but long term, I'd probably welcome the change.
The united states could spark a rural revival like you're talking about with investment into the healthcare and education infrastructure in those communities. That's what other countries do to prop up the rural economy- the steady lifelong jobs created for all the people who work at the schools, clinics, the library, provide an economic base for the town.
That has never been a part of the American experiment. Structured development like that has yet to happen in the United States.
True, although the New Deal era came close. America's most socialist time when it did the most public investment, and we are STILL living off the benefits of that.
My grandmother used to take me to Toys R Us for my birthday every year for exactly this reason — she didn't want to guess what I wanted, she wanted to watch me choose. Walking around that store and seeing what the toys looked like in person was something I looked forward to for days. You can't recreate that with an Amazon wishlist.
I still do this for my dog every year on his birthday. Funny that the Pet Store survived the Internet while the Toy Store did not...
Demographics play into the problem too. Massive decline in number of kids
I do the same!
I’d guess one reason is that there has been no iPad/App Store/YouTube invented for dogs…
I have a gut feeling there will be negative consequences for how much time developing minds spend consuming but in the absence of clear cut evidence it seems to be the default.
We still go to our local toy store - which is quite nice and only about 5 blocks away (in Berlin).
My experience in a large US city is surprisingly the opposite. The toy stores I visit are doing great. I suspect this is is because a large portion of their business is for birthday parties.
I assumed many or most were gone because of Amazon. But after having kids and getting gifts for birthday parties, I've learned there are a lot of them and they are doing healthy business. Almost always a line on weekends.
Many or most in line take advantage of free gift wrap because they're on their way to a party.
In many ways it is more convenient than Amazon because you're going out anyway, why not get it at the last second with careful gift wrapping.
But even a recent trip to the suburbs surprised me. The Lego store in the mall had a velvet rope and long line of kids waiting to get in. I had never seen anything like this and apparently it is usually this busy.
I think it's hard to see the change in US toy stories looking at articles (and discussions) like this. There's always been turnover in retail; very few stores and chains last a lifetime. (I've always suspected it has to do with when key people retire or otherwise leave the business.)
Compared to when I was a kid, there's no shortage of toy stores: There's always something at the mall, Target has toys, bookstores have toys that didn't have toys when I was a kid. (My daughter asked me to take her to a bookstore in town last weekend that was about 1/3rd toystore.)
So, it's really hard to "blame" someone for a "demise" that, to me, looks like traditional retail turnover. Even if we didn't have Amazon, I'm sure older retail stores would turn over, and newer retail stores would eat them.
I have a 7 year old and for the past 3-4 years we make a weekly pilgrimage to a local boutique toy store specifically for birthday party gifts. It’s usually packed with others just like us doing exactly the same thing. They do provide the free wrapping service and they slap their story sticker on every box and it’s a good marketing strategy. But they also stock toys that are pretty unique and change the stock frequently, every kid we know practically has every toy you’d see at a place like Target. Their toy section seems to have been the same the entire time. Occasionally a new movie related toy comes and goes and a couple new big toy trends have entered but generally it’s all the same. Even the baby toys they sell are the same ones my kid had and has outgrown years ago. I’m not certain what their strategy is but it’s definitely not a good shopping experience for maximizing LTV of a childhood.
We also have the Lego store with the velvet ropes and always queued in our neighborhood mall.
Now the only observation I can say is this really only seems to work in affluent suburbs only. My neighborhood mall just so happens to be the top shopping mall in my huge city. It’s a destination for most of the suburbs and exurbs. The boutique toy story birthday present runs is usually around $50 per kid and we go to usually around 2 birthday parties a week during school year (on average). I don’t think most parents are allocating that type of budget for other people’s kids. I have 1 kid, many of my peers are doing the same for 2-3 kids and we all are varying levels of affluent by regional standards (expensive homes/cars, nannies, private schools, etc).
Part of the problem is that when Toys R Us bit the wax tadpole, Walmart jumped in and doubled or tripled the number of aisles dedicated to toys; so any "middle" suburb/city area with a Walmart already has an "easy source" of toys to grab, making it an uphill battle.
Target did the same and now has more Lego than TRU ever had, for example, though their prices are often over MSRP.
The key would be to market above both and aim for "different things" while making it a possible destination on its own.
I've never heard the phrase "bit the wax tadpole" before. From googling, it sounds like a reference to an urban legend about Coca Cola being poorly transliterated into Chinese? It's not clear to me if this is something commonly used as an alternative to "bit the dust" or if I'm missing another level of metaphor here.
That's probably the trap: competing with Walmart or Target on "I need a LEGO set for a birthday party in 20 minutes" is almost impossible.
> we go to usually around 2 birthday parties a week during school year
That's honestly impressive, some 70 birthday parties a year, plus presumably some extra in the summer.
It's a lot. Us parents joke how insane it all is but realistically it will taper off soon as kids start having smaller birthday celebrations. At this age it's kind of a "invite everyone in your class/grade" and has naturally reduced a bit already as boy/girl only parties started. I think next year or two it will become more common to have "invite 3-5 good friends to an event" type of birthdays and that will reduce it a lot further. Usually that's also the beginning of "drop-off birthday parties" where us parents don't have to attend with our guest. There was only one this year, my son was picked up and a group of ~10 went to a sport event.
Oddly enough, there are practically none in summer. If you have a summer birthday you either don't have a big party or you have a half birthday or something similar where the party occurs during the school year. Too many people travel throughout the summer and kids are doing different camps and things so it would not get well attended. Our group of parents kind of have unspoken rule to not do anything that feels required when school is out. That goes for fall/summer/spring breaks and holidays too.
The logistics part probably sounds crazy but probably only ~10% of these parties are at someone's house. We've never hosted a party at our house, well when he was 1-2 for family only, but not these huge parties with so many kids, parents, siblings, etc. Most people rent out a venue. Arcades, trampoline/slide parks, skating rinks are popular with the girls, sports themed places are popular with boys, chuck-e-cheese was popular for a bit, those kinds of things. It's too much work for a 2 hour party to have that many people in your home.
My birthday was in the summer. I was in the RV away from friends all summer. I never got a birthday with friends, and get this, I didn’t get invited to birthdays because I wasn’t participating in the shared economy of gift giving!
My town was mean.
This matches my impression that kids’ birthdays have become less of a "party at someone's house" thing and more of a small event-industry category
Yep, and I hate it. For our kids we’ve started just inviting a bunch of the kid’s friends and extending the invitation to each friend’s whole family and just having a chill house party. We also invite a friend’s family for the kid not having a birthday so they have at least one of their friends to play with too. Kids running around outside, inside, doing whatever they want while the parents all get to hang out and talk. We order some pizzas and other food, set out a few coolers of drinks and some adult beverages too, and it’s always a great time. It helps that the birthdays are in the fall in it’s usually really nice out still.
We also very clearly specify “no gifts”. We don’t have room for more stuff and they’ll get more gifts than they need from grandparents.
I’d say a majority of the parties we get invited to also are asking people to not bring gifts.
I think it's more scary than impressive. What kind of adults are all of those children going to grow up to and become, where multiple parties are the weekly norm?
Maybe you can clarify because I don't understand your fear or what you think it means for these kid's future adulthood?
The kids just see it as a fun 2 hour playdate with lots of friends in an interesting setting with dessert. It's the same friends they see at school, sports, etc. so it's their time to have some less structured play time, which - not sure if you've heard - is in rare supply for many children these days.
When I was a kid, even at this age, I was roaming all over town on a bike with my friends, I basically had the Stranger Things childhood experience, and I feel very confident there was a lot more to fear in that timeline of childhood.
Playing (and roaming) is great, non-stop parties is not.
Excessive partying can foster a mindset in children that equates fun with extravagance rather than simple enjoyment.
Frequent extravagant parties can foster a mindset in children that equates fun with material possessions and lavish events, rather than personal connections and shared experiences.
Not sure if the picture I painted originally was unclear but these kids are already living a very comfortable lifestyle by most standards. Most outsiders looking in would say they are all spoiled brats which is basically what I feel like you're trying to say more politely. But, this is just their norm, it's very much a part of their interpersonal connections and shared experiences which is exactly why we try to attend as many as we can. We try to engage in the community and support these kids as a group by celebrating their milestones and achievements; birthdays are one such example. What you fail to consider is these kids do not care about the material possessions at all. They've never had a shortage of that so they have no want for it. That is not special. I've never seen a kid even look at the presents during a party. They get loaded up and opened at home. I know my kid often doesn't open them for days or even weeks after the party. At this moment, he has a shelf full of toys he got as gifts half a year ago that are unwrapped but unopened. He's never even played with them. Some of them he already had and so he'll probably donate them at Christmas. However, the idea that they got to pick a theme and an venue that represents their personality/interests and share it with their friends during a day of fun is what they thrive on. Being the guest of honor at such an event has plenty of social-emotional benefits (https://pmc.ncbi.nlm.nih.gov/articles/PMC6130922/).
There's nothing lavish about these events unless you seem to think so. A $20/day trampoline park is not lavish. A 2 hour arcade card at D&B is not lavish. I don't know what your frame of reference is but this is what we do on a normal weekend if we have no plans too, just with a smaller group and withot birthday cake to eat.
You know, 15 years old later, it is really truly completely irrelevant how many parties you went to as 5 years old.
Just last week, I was with one of my kids trying to kill some time before an appointment. I noticed a toy store in a strip mall, and I asked him if he wanted to check it out. His response was, "What's a toy store?"
We did check it out, and he was pretty disappointed. Even though it was advertised as a STEM-oriented store, half of it was stress balls and jigsaw puzzles.
Recently in La Jolla, where presumably you have high wealth and IQs and tourism, and experienced the same thing—mostly fidget stuff, puzzles, and Lego resellers. The kids were so excited to go in but pretty quickly realized it’s effectively just a physical Amazon home page of mediocre plastic stuff.
Toy production is down significantly too. Not a lot of cool toys out there.
In the UK at least a big part of the problem for all high street retail is high fixed costs.
High rents for "prime" locations that, given the trend over the last 25 years, are no longer very prime, coupled with high business rates set by central government make it incredibly hard to make any money. And that's even before thinking about staff, where cover is no doubt needed at a higher concentration per square foot than warehouse based businesses.
Couple that with increases in minimum wage[0] and employer NI, and taking into account inflation and cost of living in recent years, and a lot of formerly workable retail businesses have simply been rendered non-viable.
[0] Which, by the way, I have no quarrel with.
I also think the UK are very tight with money (not sure about other countries). There are lots of people, according to our local Clarks shoe shop, who get their feet measured and then just buy their shoes online to save a few pounds. People do the same with anything they can try on in the shop and then order the same thing somewhere online for a bit cheaper.
The things you said are definitely making things much worse and I suspect that even back in the day when everyone bought things from the local shop, most retailers were not making massive profits so anything cutting away at that will make it worse.
Sad really.
Another problem with the UK retail scene is the charity shop, of all things.
It is hard to hate the charity shop as they are Mother Theresa and Bob Geldof in retail form, feeding the starving of Africa (name me one) and bringing us one step nearer to curing cancer (as if).
But, after a while, the charity tends to perpetuate the problems that it seeks to solve. So you have what amounts to a business that has volunteers rather than paid staff (forget about minimum wage), the electricity bill is at a special rate and even the products come for free, from house clearances and people just getting rid of their 'empty gifts of capitalism' (plastic trash).
The real hustle is with rent and business rates. Rent and rates gets paid but at a fraction of the cost. If the landlord kept the place empty then he would have to foot the rates bill, but get that charity shop in and the problem goes away. The landlord can then count on the value of his property going up because they don't make land any more and all capital ends up hoisting up property values, even if the crumbling 'property' was paid for aeons ago and is best demolished.
What you have with a toy shop is specialist retail, where customers have expectations of service. The staff should know the availability of every product, stock levels and much else. It is not 'pile it high' as per the Toys R Us model.
I worked in specialist retail and for a boss that despised charity shops. We were in a back alley, with a fraction of the footfall. Anyone visiting the town would see the usual row of useless charity shops but not our shop. We had bills to pay and they didn't. It was unfair.
Nowadays the High Street doesn't just have the charity shop scams going on. There is the joy of money laundering. Imagine you have a fine cannabis operation going on and you are bringing in tens of thousands a week. What do you do with that money? How do you convert it to property?
This is where the nail bar comes in to play. Or the 'barbers'. Or the 'vape shop'. Hire your immigrant labour to sell nothing all day, and you can put through all the money you want.
Then we have the Wetherspoons pub, where they don't really make money from beer, the idea is to build a property portfolio. Another hustle.
Then there are the naive hopefuls. Personally I would love to own a little shop that sold all my favourite toys that I was denied as a kid, so that would mean train sets. Or maybe I would love to own a little cafe that sells the healthiest food in town. With some lottery winnings or an inheritance, I could dive in, hire my best friends and have the grand opening.
Narcissism would mean that all the warning signs would be ignored. Pride would mean that I would be in it until the house was mortgaged three times over, with half the suppliers demanding payment up front. Every day would be praying for rain, as in sales. I would be complaining and blaming the usual suspects such as the jungle store.
There are many, many other hustles and it sometimes helps to explore a town with someone from 'the other side of the tracks'. Poor people get preyed on in ways you would not believe.
For instance, cigarettes. If you went into one of those convenience stores and wanted a packet of cigarettes, it would cost you a vast fortune, I don't know how much, but probably around £20 nowadays, at a guess. However, for our special friends, they get the counterfeit ones at a ridiculously low price.
If you were to ask for them then the owner would tell you where to go. However, if a special friend were to introduce you to the store owner, then you would be able to buy the £3 or £5 counterfeit items too. You can even pay by card, so long as you are in the club.
A certain poverty mindset keeps people from 'my special world' going back to these convenience stores to buy food and drink items that have no nutritional value apart from calories. It is very sad but you would be amazed at how much money can be made from the seedier side of the High Street.
The problem isn't with this strange underworld, it is with the people in charge. They don't have the 'speakeasy' code words needed to appreciate how it works and they haven't tried to give specialist retail a go. They are probably at a different level of criminality, with the rentier class that are the true parasites of Western society.
In the early 2000's I visited my sister's family in Australia. Hadn't seen them for a few years. I took the kids to Toys'r'us and gave them $200 each to spend. It was the best $400 I've ever spent in my life. They still talk about it.
Somehow giving $200 of Amazon credit doesn't feel the same :(
One of my daughters always asked to be taken to Toys-R-Us for one of her b-day presents so she could pick out something. Watching her walk around in wonder for an hour trying to decide was an even better present for me. I'm sad they're gone too.
I can only imagine the sheer delight in a kid that had never been to a dedicated toy store like Toys'r'us because of online shopping to see one for the first time. Sadly, many kids will never get to experience a toy store like that. I remember thinking what I'd do if I ever won that shopping spree that kids won on whatever Nickelodeon game show where that was the prize. I'd actually practice by learning where the things I wanted were in the store to be as efficient as possible.
Many years ago I found myself unemployed, and had a year where I pretty much took any job I could find. One of these were in a sorting facility for one of the largest shipping / postal companies.
On my first day, the very first thing I noticed was how a select few companies / online stores accounted for something like 80% of ALL the shipment that came through the facility: Clothes (with Zalando probably making up half of the shipments, just an endless stream of Zalando shipments...), make-up, and baby / kids toy stores. The last one kind of took me off guard, but then again, local toy stores have been dying for years.
I'm honestly not really that surprised by that. All (except clothes) are prime examples of products where you don't really care who sells it to you and how it looks in the packaging. People want a certain product and want it the cheapest. Why would you go to a real store to look at that product inside of packaging you can't open, with the added cost of the person behind the counter?
I mean a Lego set is a Lego set, whether you see the pictures on the box or online.
I am surprised to hear this. In Spain there are plenty of physical toy stores. I can easily think of a few not too far from my home. Not only that, it's also common here to see entire aisles full of toys in some big supermarket franchises, like Carrefour.
For the last few years I've been working on a project, before I buy anything online I try to find it at a local retailer (ideally locally owned). If I do find it, I pay cash. I treat it like a game, it's a scavenger hunt. I'm putting money back into the local economy, helping local shops stay open. Makes it significantly more difficult for pervasive modern surveillance to track which items I look at or purchase. I don't get any emails about it later.
The Barnes and Noble bookstore I occasionally shop at has a second floor that is about half full of nothing but games, legos, puzzles. I honestly think they sell more of that than books these days.
Their strategy is now about 1/3 of the store dedicated to toys/puzzle/legos and I think it’s a brilliant strategy. I can walk into the store, browse books while the kid is exploring decently engaging toys. It’s a win for the store and myself as I can walk out with a book or two for myself, a good potentially educational toy, and a Lego kit for us to complete together. They got us good
I rolled into a b&n and it had more toys than books 100%.
What country are they in? The list of shops seems to suggest belgium/the netherlands. Because in the UK, I often go to toy shops with my partner. There's probably two shops in the same shopping centre you could call "toy shops", as well as a GAME which sells video games. All three of them sell lego, as well as quite a few other shops. There's also a Cex and a mini Cex if you want to buy video games and get ripped off. Also quite a few other shops tend to have a "toys" section, such as WH Smiths or B&M, though I wouldn't call them "toy shops" At least in my area, brick and mortar toy stores are very much alive and well
The blog writer is in Belgium, just like myself. Can confirm that there are almost no brick and mortar toy stores left in my area (which from what I can tell is the opposite side of Flanders).
GAME is bankrupt and was a shit for a long time, WH Smith is also closing lot of stores, B&M is selling tat and is half empty. But none of these are toy stores.
Retail in the UK is very much dead, unless you need barber and vape shops.
Smyths toys is doing pretty well in my town, in an out of town centre retail park admittedly. It is situated in a fairly new retail park that got built exactly behind the old one where Toys R Us used to be. That got knocked down and replaced with warehouses. Must be cheaper to tear down and start from scratch than try to modernise after being vacant for a few years.
Town centre is lots of barbers, vape shops and betting shops. Few new independent bars and restaurants seem to be breaking through thankfully.
As I said, I wouldn't call any of those three "toy shops". But all three of my local ones seem to be going strong, and sell toys or toy-adjacent things
Back when I was a kid in the smallish UK city of Lincoln, we had two big model shops (tools, balsa kits, aero engines, Airfix, etc.), one big toyshop (Scalextric, and toys for young kids) and one rather weird place that specialised in fishing gear, Meccano and 00-guage railway stuff.
Now all are gone, and I do wonder how kids of today will be able (for e.g.) to experience building a glider (balsa, cutting out with a razor, tissue covering with paste) and launching the final product into the sky. We have lost something.
BTW, if any of you or your children want to get into things aeronautical I can strongly recommend https://www.amazon.co.uk/Penguin-Book-Kites-. Some string, a little bamboo or dowel, and a binbag and you are ready to go.
Sorry, bad link to book. Use https://www.amazon.co.uk/Penguin-Book-Kites-Original/dp/0140...
It really is a great book if you have any interest in flying things.
Here in a small city in the US we have two craft stores with hobby sections that provide access to those things.
I walk by a lovely local toy store every day.
https://www.playtoysandbooks.com
I live in the Andersonville neighborhood in Chicago, and it’s a small bit of joy to have a thriving boutique toy store to walk by as I go to the gym.
I don't think every old retail format deserved to survive unchanged, but towns without places where children can physically explore feel a little poorer (in a way)
I walked 20 minutes to a brick and mortar toy store to buy some bouncy balls recently. It was a chain store though. That's not sad to me, because I'm not emotional about whether chain or independent businesses do any better in a given industry.
The DreamLand bit seems off:
> DreamLand: another toy store chain with venerable Belgian roots owned by Colruyt group that briefly had a fancy underground store near a new parking lot not even five years ago. Of course it had to go. […] The bigger store about 30 km away from us recently also closed down. The store chain is still alive as is their webshop, but for how long… There’s still a DreamLand nearby but no longer in the centre.
DreamLand actually grew significantly in terms of physical stores due to their merger with ToyChamp, and is present in both the Netherlands and Belgium now. Of course, these huge (for European standards) stores tend to be located in malls and such; not in the historic city centres where toy stores used to be.
Does the article mention that private equity killed off the still-profitable Toys R Us?
I opened this comments page wondering if anyone would point this out. The idea that all sales have moved to online is always trotted out as the main excuse, but the reality is that most of the big well-known UK retail failures were caused by private equity, asset-stripping and loading them up with debt until the interest payments are too high to be payable.
I found it especially disheartening that the brick and mortar stores had to subsidize their own demise by paying taxes for roads that carry their competition who dont pay taxes.
Roads carry customers to the brick-and-mortar location, as well as goods that they stck.
I’m surprised physical toys are still a thing. We have a boutique toy store in our neighborhood. Expensive wooden things from Europe. I see lots of old people buying toys for grandkids. I hope they are well loved and not just tossed.
What dense urban core do you live in?
Our local toy store is a member of marketing cooperative and yours might be too.
They are wonderful and a perfect example of a local toy store - a wide variety, personal service and free gift wrapping on all purchases (a life saver for anyone with kids and a birthday party to go to seemingly every other weekend).
A map of the network is here.
https://stoysnetpartner.com/our-retail-clients/
There is a really cool place in Denver called Wizard’s Chest. I think they make good money off costumes, but also Warhammer 4k (and to a related lesser extent DnD). Nice people, too.
Game stores tend to make money off Magic The Gathering, from my understanding. But yeah, The Wizard's Chest also has a decent miniature gaming community as well. And their board game selection is pretty good.
It's Warhammer 40k.
But beware, this game is designed to suck your wallet dry! ;)
"Get your kids addicted to M:TG so they'll never have enough money for drugs" - good advice from a coworker of mine
"Getting your kids addicted to M:TG" should also include showing those kids how to order proxy cards for much cheaper.
Interestingly toy stores are still a thing in Japan. I took my 2 year old daughter to buy her birthday present this year. Her smile when I told her she could take the toy plush home was priceless.
I asked her if she wanted the big or small version, she liked the small. Showing kids toys on a tablet is never going to replace the experience.
There are no toy stores close to me in New Zealand any more, or even a long drive away. There used to be two small ones, they were both great but never really that busy.
The local cash and carry also used to have a toy section - it was great because they had a deli where they also made coffee, a grocery section, bulk food section, and warehouse section that included toys. So we'd send the kids to the toy section, get a coffee, grocery shop. The building was a bit rundown, but that was part of the charm too. They upgraded it, it looks fancier but the toys are gone, the deli is gone, we only go for things like bulk flour now. I wonder if businesses like that have real trouble understanding loss leading sections like that.
In my area, while there are certainly fewer game/toy stores than there used to be, the ones that are left are doing great and are always busy.
What I did not see in the article or comments is the fact that people dictate how things evolve. People vote with their wallets (or via local councils) in ways that directly or indirectly influence the outcome. The title can also be, and still correct, "We killed the brick and mortar toy store". This makes people think more than "it's raining", which is impersonal and somewhat inactionable.
I was surprised to find that Barnes n Nobles has a decent selection of quality toys for infants to toddlers. Toys have their own section at my store. I used to buy toy/book gifts at Target but the options are so much more limited.
this article feels 10 years late. Toys R us marked the end of the toy store.
Its just a matter of time before other stores follow, except for the Lego flagship stores , or the ocassional anime store in a bigger city.
Its sad.
In Austin we have most notably Terra Toys and Toy Joy.
Terra Toys is 50 years old, its space shows it. Hand-written recommendations and prices. The employees demonstrate and play with the toys, welcome you genuinely as you enter. The toys seem curated for actual fun not schtick. I went in last week and it was popping. It’s an experience.
Does Main Street need to focus on experience to survive? If so, how does it monetize experience if selling items isn’t the first focus now?
I miss toy stores, butcher shops, record stores, movie renal stores... everything moving online has really made culture so isolating and a lot harder to meet people. I remember when I was younger I could just go to a retail area and get some coffee, look at magazines/books, then go to a record store, then a video game store, a pet store, etc. Now everything is either a big box store in a giant parking lot or online. There are obviously exceptions, but I remember having so many more retail options and now they can't compete with Amazon and the rising cost of real estate and labor. Capitalism is strangling culture and making people more lonely and anti-social. They want us at home, buying subscription services, and getting taxis for our burritos so we don't have to actually go out and do anything or see anyone...
> Capitalism is strangling culture and making people more lonely and anti-social. They want us at home, buying subscription services, and getting taxis for our burritos so we don't have to actually go out and do anything or see anyone...
People are choosing in large numbers to buy subscription services, order food online, stay at home, and avoid socializing with other people; and the market is supplying demand. This isn't something that some external power is forcing on an unwilling populace. Indeed, if you think that people are systematically making consumer choices that are easy and convenient in the short term but bad for the fabric of society in the long term (a common-enough complaint about human society), then the "they" who wants to force people to change their habits en masse is you.
Agree, it's almost entirely about profit and convenience but I just think there's something false about modern 'convenience' in that it actually isn't 'convenient' when you think about all the other things you lost. The tiny bit of friction exerted to actually go into a store is now gone, but now you lose the opportunities to meet other people into the same things as you... get tips from retail workers on interesting movies/music/video games. It's convenient in that one singular moment, but now you're lonely and have no friends or connections... I think that's why people are more depressed and on more depression medicine. There's a lack of just casual interaction and socialization now that we're replacing with 'social media' doom scrolling and it's clearly not making people more fulfilled--just more convenient.
I would argue a lot of this could be changed by better zoning laws and better city planning. Big box stores should be relegated to the outskirts of city limits... let local and small businesses have downtown areas. Otherwise, everything is becoming one homogenous experience across the entire country.
I think this also speaks to the heart of the non-political spectrum between "conservative" and "progressive" societal evolution. It's progressive to enact these kinds of changes in the name of supposed convenience, efficiency, and modernity (whatever that means), and to do it quickly without sufficient thought as to all the unintended consequences. It's conservative to fear such changes and try to slow them down for the same reasons. Rapid societal changes are always risky, even if we suspect they may be net positives.
> a big box store in a giant parking lot
You know it's bad when stores don't even "have" parking lots, but are "in" them.
Yes, in the city were I grew up a single private toy store is hanging on. I think it is because they out right own the building they are in. But we all know their days are numbered.
It is too bad, they were real good and carried items that could not be found elsewhere. Now seems all stores are the same.
Edit: Looked it up, the store stopped selling toys all together last year. But they are still in business selling other items that were in a different part of the store.
Capitalist efficiency ultimately makes shops barely able to compete on price and convenience with the few clicks needed to order and get stuff at home.
My stepfather was a salesman/distributor, selling the most diverse things (mostly electronics and mobile-related, but not only) to shops in the entire Lazio region in Italy.
95% of the shops closed, even among those that didn't he often wonders why they keep buying from him rather than on Alibaba or Amazon where he often cannot compete on price. And same for those client's customers.
It's hard to beat the convenience of online ordering for them, let alone the pricing.
But this has major implications for the local economies, especially of smaller places. As shops start to disappear so do the services or restaurants/bars connected to them.
Capitalism is brutal in its efficiency and there isn't much if anything that can be done to stop it, if people can get the same products at lower prices, they will.
Good riddance.
I never really liked those small shops. Open Monday-Friday from 9 to 17 so a working person cannot really buy anything there. Prices usually 20% higher than online, minimal choice. It's not like they were selling something unique, they'd sell exactly same shit you'd see online, but at higher prices. The concept of "small shop being a part of the community" is completely foreign to me because what else you'd be doing in a shop other than walk in, buy, get out.
Supermarkets on the other hand, that's a different story. I live in the Netherlands and here we have strict laws pretty much about anything, including supermarkets. The goal is to prevent megastores from coming to existence which usually suck up all economic activity from the area. I have to say that the model is relatively successful - there are lots of mid-size supermarkets, so wherever you live, you're likely close to one.
But I have to say that it's another thing I miss from Poland. I fucking LOVED megastores. I could easily spend an hour walking through the cheese aisle and looking at all the products. For some inexplicable reason, despite the existence of megastores, the chain of small convenience stores Żabka is going through a renaissance - they're almost at every corner which means that if you're walking down the street and you're suddenly thirsty you're almost for sure close to Żabka. Another reason to go there is that they often offer products unavailable elsewhere - once I found sugar-free orange-vanillia coca-cola. I knew that god smiled to me that day. Oh, and typically they're open until 23:00.
My local toy store has a resident dog, and allows other dogs inside. That place serves as a dog toliet, and dog hair, saliva, oils and excrements are everywhere. I refuse to go near it, purchasing any contaminated toys is out of question!
Last time we went there, owners assaulted my child and knocked it onto the floor!