Big Box Panic

Why retail giants like Wal-Mart won’t take over the world


| May - June 2008


On the corner of Newbury Street and Massachusetts Avenue in Boston sits one of architect Frank Gehry’s least inspired creations: 360 Newbury, a big box of a building, which is appropriate considering that its first three floors have long housed big-box record stores. But for the second time in 10 years, its retail space sits vacant. Its last tenant, the British-owned music giant Virgin Megastore, broke its lease in 2006 after four unprofitable years hawking CDs and DVDs to local college students. A company spokeswoman promised “to seek an alternative Boston location.” It has yet to do so.

Virgin snapped up the space in 2002, when the failing music retailer Tower Records vacated the building ahead of its descent into bankruptcy. Back in 1987, when Tower launched its largest megastore in the Gehry building, the future of Boston’s independent record store business looked grim.

Vinyl merchants and industry experts predicted that most independent retailers would feel the pinch of the big box; megastores like Tower would have more stock on hand and, it was presumed, would offer significantly discounted prices. The three-story Tower Records would pose a direct challenge to small, local stores like Newbury Comics, a comic book merchant turned record shop specializing in independent music, hard-to-find imports, and seven-inch records by local bands. To make matters worse, the new Tower store would be situated on the very same block as Newbury Comics.

But it wasn’t just the specter of Tower that frightened small retailers like Newbury Comics. The music business was experiencing rapid growth in compact disc sales, and chain stores were expected to become the dominant players. Giants like Recordtown, Strawberries, Coconuts, Musicland, and Sam Goody—most of which have now either disappeared or declined—would come to dominate the industry, the Boston Globe predicted. Among independent stores, the Globe wrote, Tower’s arrival was precipitating a panic. So ominous was the thought of a big-box music store in Boston that the New York Times covered the store’s opening, suggesting that the independents might as well throw in the towel, since Tower “has virtually no competition in its league.”

At the time, Newbury Comics co-owner Michael Dreese told the Globe that he too was worried, and that when all the chains had settled in—the British giant HMV would soon open a megastore in the area—“there’s going to be blood all over the place.” It would, presumably, be the blood of the independents. The Times spoke in the past tense, suggesting that the indies’ demise was a foregone conclusion.

“On the block where a punk-rock record store, Newbury Comics, once held sway,” the Times sighed, “a new Tower Records sells that kind as well as more mundane music and a wide assortment of videotapes.” Strawberries, a regional chain, responded by upping the ante. Its store would stock, a spokesman said, “60,000 cassettes and close to 50,000 CDs,” versus the typical average of “12,000 CDs and 13,000 cassettes.” Who could compete with that?

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