Studies: Street vendors do not compete with brick-and-mortar merchants

The Daily News recently ran an editorial calling for research on whether fruit and vegetable vendors are unfairly competing with brick-and-mortar small business owners. The Korean Small Business Service Center, which represents many green grocers, claims that the Green Cart vendors are driving them out of business. We welcome further research, but it is not necessary. A whole series of scholarly studies has already documented that street vendors do not compete with brick-and-mortar establishments. In fact, they help their businesses. In New York, Professor John Gaber conducted nine months of field research on 14th Street during the early 1990’s.1 He found that the goods sold on the sidewalk (t-shirts, watches, socks, etc.) were different from the higher-end and bigger-ticket items sold in stores (stereos, furniture, etc.) The “vendors complement the existing array of affordable goods retailed by store owners with smaller and usually very inexpensive items (i.e., 3 pairs of socks for $1).” Beyond a mere lack of harm, Gaber discovered a “positive synergistic relationship” between the vendors and their brick-and mortar counterparts. He found that the vendors drew people to the area and encouraged them to spend more time there, which translated into more business for all. For example, he saw that vendors provide food to hungry shoppers, enabling them to continue shopping for longer. Nearly identical results were found in Los Angeles. Studying vendors in the MacArthur Park area, Professor Gregg Kettles discovered that there was little head-to-head competition between vendors and storefront merchants.2 “Sidewalk vendors avoid selling from places adjacent to merchants selling the same product or products,” he found. Indeed, he observed that the vendors tried to be “good neighbors” to nearby merchants, by, for example, sweeping the street near their places of business. In Chicago, Professors Morales, Balkin and Persky undertook an economic study of the famous open-air street market on Maxwell Street, which closed in 1994 before being reopened, later, in a smaller form.3 Combining ethnographic and economic analysis methods, the professors estimated a $49.3 million economic loss as a result of the market’s closure. Many retails shops had gone out of business since the closing of the market, they observed. Additionally, with the vendors gone, many wholesale distributors who supplied them also had to close their doors. Throughout history, the removal of vendors has led to a loss of foot traffic that harms brick-and-mortar small businesses. As Suzanne Wasserman documented, merchants on Manhattan’s Lower East Side banded together in 1929 to lobby against street vendors.4 By 1940, however, “the East Side business community, which had fought for ten years to remove the embarrassing pushcarts, now complained that their removal irreparably damaged their trade.” The stores, who saw their sales drop as much as 60 percent, “had severely miscalculated the extent to which their business depended upon that of the pushcarts outside their doors,” wrote Wasserman. More recently, City Limits magazine documented the complaints of brick-and-mortar merchants on Fulton Street, in Brooklyn, after the street vendors there were removed in 2001.5 In addition to drawing customers, and contributing to a vibrant street life, the vendors served a public safety function. “If somebody was in trouble, they’d be the first ones there – even before the cops,” said one merchant, complaining about the loss of the vendors.
1. Manhattan’s 14th Street Vendors’ Market: Informal Street Peddlers’ Complementary Relationship with New York City’s Economy, John Gaber, Urban Anthropology, Winter 1994. 2. Legal Responses to Sidewalk Vending: The case of Los Angeles, California, Gregg W. Kettles, in Street Entrepreneurs, edited by John Cross and Alfonso Morales, May 2007. 3. The Value of Benefits of Public Street Market: the Case of Maxwell Street, Alfonso Morales, Steven Balkin, Joseph Persky, Economic Development Quarterly, November 1995. 4. The Good Old Days of Poverty: The Battle Over the Fate of New York City’s Lower East Side During the Depression, Suzanne Wasserman (New York University, Department of History: Ph.D. Dissertation, 1990). 5. Sold Out: What happens to the neighborhood when vendors disappear?, Hilary Russ, City Limits Magazine, September 2002.