Keep Out the Competition Judiciously

There are few cities as protective of local-based retailing as San Francisco. In the Hayes Valley and North Beach corridors, no retailer with more than eleven U.S. outlets can set up shop. In certain other corridors, such a retailer needs to obtain a conditional use permit following a Planning Commission public hearing. The net is cast wide: Retail financial services like banks are included in these neighborhood restrictions.
     One argument is that the city’s economy benefits from tourist dollars and visitors want offerings different from what they can find at home. Another argument is that San Francisco residents pride themselves on living in distinct neighborhoods, each neighborhood with its own personality.
     Keeping out competition might offer indirect advantages for consumers. With fewer and smaller businesses bidding on storefronts, rents inflate more slowly, giving an opportunity to retailers to keep item prices lower or put more money into décor and customer service. On the negative side, an absence of competition can instead lead to exploitive pricing and neglect of décor and customer service, since the retailer is the only game in town.
     Public support for the sorts of restrictions San Francisco has implemented will prevail in your neighborhood only if the retailers make it worthwhile for the consumers by offering them both direct and indirect advantages from limiting the competition.
     The story, dating from the early 1900s, credited with originating the term “the only game in town” sticks any recipient of that designation with negative associations: A traveler asks the hotel desk clerk to recommend a place to play some high stakes poker. The desk clerk says, “The bar next door has high stakes poker going all the time. But I’ll tell you that the dealer there cheats people blind.” “My goodness,” the traveler asks, “why do people play poker there?” The clerk replies, “It’s the only game in town.”
     Why might you aim to be the only game in town? Because the hotel desk clerk’s answer to the traveler was incomplete. People played poker at that bar considering it was the only game around going on whenever you wanted to play. People were willing to accept losing their money in order to have fun playing cards, drinking, and socializing. Customers came back because they received value.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Dress Up Your Neighborhood 
Become the Only Game in Town 
Count on County Origin If Quality’s Clear