An interesting report came out in The Guardian recently about empty storefronts in New York City which blamed rent over online sales for closed businesses. A walk down any street in one of the busiest cities in the world will reveal a growing number of boarded over smaller shops. Many businesses that have been operating for generations are closing their doors for good in the coming year. People are quick to blame online retailers, when the reality is that the blame falls on the landlords who refuse to lower the rent.
New York For Rent
The Guardian reports that Helen Rosenthal, New York City Councilwoman, claims 12% of stores on one street in Manhattan were currently for lease. In fact, the same report finds a growing national trend in stores for lease, with New York being only a small sample. Jeremiah Moss, author and New York enthusiast, proclaims that businesses will survive Internet sales if overhead, such as rent, is lowered. As the answer to saving small-time New York is to lower rent, the question becomes, why is the rent so high?
They’re Not Conventional
The landlords of the closed-down buildings are not conventional landlords. They do not own buildings to turn a profit. Instead, The Guardian finds that they are hedge fund managers or institutional investors. This means that they are far more interested in chain stores than small businesses. What’s more, the banks give a property more value if it houses a national chain. Hedge fund managers find it easier to leave a building empty, hoping for a chain store to fill it, then simply write it off during tax season. Basically, the retail over-pricing placed on the city is the culprit for running out small business, not Amazon.
Changing the Tides
The Guardian reports that things may be changing for business owners in New York, albeit slowly. Landlords are beginning to get impatient in their wait for chain stores, as reflected by a wave of deals in SoHo recently. Small business owners are insisting that landlords have some give as well as take in transactions, meaning that everyone gets something. Further, a brick and mortar storefront is no longer about simple product. They are now about bringing people to the Internet to help customers understand the product. This marriage between the storefront and the Internet translates to sales for small businesses. Certainly, small businesses want customers to use Amazon. Amazon users are savvy, smart, and tend to comparison shop while hanging out on the Internet. Using Amazon means navigating the Internet, which means an increased chance of a customer finding the brick and mortar business.
Truly, Amazon is not taking away small business. Investors who refuse to budge on rent prices are the culprits. While the tide is changing back to favor small business owners, those small business owners still want shoppers on Amazon. Online shopping is actually in conjunction with shopping at small businesses, and it will have a hand in helping rebuild small business America.