Last year, they shut down the post office in our town.
Well, not exactly. What they did was consolidate three branch offices into a single post office, which they located in a part of town that's absolutely impossible to get to, especially during rush hours.
What's interesting is what they did with the building of the post office they shut down. Rather than use it for another governmental office, it was sold to a local developer who renovated the building, divided it in half and leased it to two tenants:
—A fresh-food supermarket that offers organic, locally sourced produce, meat and other basic groceries. (It's part of a national chain that competes with the likes of Whole Foods, Sprouts and Trader Joe's.)
—A greasy-spoon restaurant (as we used to call it) that offers hamburgers, fries and other comestibles that are great (I'm told) when you are suffering from a hangover.
Both businesses opened their doors about six months ago. Last week, I read in my local newspaper that the supermarket closed. The greasy hamburger joint, on the other hand, is thriving, and there are plans to open a second location in town.
The supermarket advertised aggressively through direct mail, in local media and in Valpak, offering discount coupons for as much as $15 off of some items. I personally never visited the store (it's too far from where I live), but friends and neighbors who did said the store felt cramped and the merchandise was priced way too high (who discounts groceries by $15?). The fact that we also have a Whole Foods and Trader Joe's in town didn't exactly help, either.
As it happens, I have visited the burger joint — it ain't cheap, but their gourmet steakburgers with all the trimmings are truly terrific.
There are several fast-food hamburger restaurants in town, including all of the national franchises, and a fair amount of Irish-themed pubs and other red meat-oriented eateries. Yet the burger joint's business continues to grow. So what exactly happened here?
In my opinion, this is a classic case of how the so-called "new economy" has not erased, amended or changed the fundamental laws of market economics.
If you took a basic economics course in high school or college (microeconomics, to be exact), the very first concept you learned was the laws of supply and demand in a market-driven economy. When demand exceeds supply, prices go up; when supply exceeds demand, prices go down. Demand decreases when prices are raised significantly; demand increases when prices are decreased.
Whenever I visit my local supermarket and want buy milk, bread, butter, orange juice and other basics quickly (You do know that all supermarkets locate basics at the very back of the store so customers have to walk the entire length of the store and — hopefully — pick up impulse purchases along the way, right?) I always go down the organic food aisle to get to the back of the store. There's never anyone there and I know I won't be tempted to buy any of those items.
Lest anyone accuse me of being overly cynical (the horror!), there's no question we all need to eat healthy, fresh, organic, non-GMO, sustainable, low-calorie, low-fat, throw-in-your-favorite-buzzword-here food. People aren't stupid. They know eating at the burger joint will not help them live longer. If organic food cost the same as the usual junk, I have no doubt that many, if not most, people would buy organic, and that the fresh-food supermarket would have wiped out its local competition.
But, sadly, as we all know, organic, healthy food comes at a premium price, and a lot of people don't want to pay it. They want to live and eat healthier, but they are also value- and cost-conscious. The burger joint offers good value for the price; the fresh-food supermarket simply didn't.
And these concepts apply to more than just food. Recent articles in The Wall Street Journal indicate that sales of gas-guzzling SUVs and other large vehicles are way up because of today's historically low gas prices. Now, we all know that gas prices will go up sooner or later, and that these larger vehicles are terrible choices for the environment. But man, do they look good on the highway. And you feel safer riding up high, surrounded by ten tons of metal, don't you?
Sometimes the only way to get people to do the right thing is for the government to mandate it. But without a solid economic incentive, even the government can't change peoples' behavior. Look around your neighborhood. Lots of people are putting solar panels on their roof, seriously uglying up their homes and jeopardizing their curb appeal. Why? To combat global warming? Or to potentially lower their utility bill and get a federal solar-energy tax credit?
Remember that relocated post office in my town? Well, the local UPS stores and FedEx outlets have reported a significant increase in volume since the post office's relocation. They're more expensive than the post office, but they're more conveniently located and you can get in and out of them much faster.
If only something like that could be done for organic produce stores...
Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.
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