Competing hardware stores will benefit Minneapolis neighborhood

It can be a humbling experience walking into Settergren’s Ace Hardware, my neighborhood hardware store.  The humbling part happens when the high school-age employee asks if he can help me.  I consider myself a pretty handy guy and, being a guy, I don’t tend to ask for help.  So, if I ever respond, “Why yes, you can help me,” then my issue usually covers a topic well beyond home repair 101.   The humbling part is that the kid more often than not has the answer. 

That’s a testament to how well Mark Settergren runs his business.

Paging through the Southwest Journal in early July, I read that Settergren is planning to expand his business and open another hardware store a neighborhood away in Linden Hills.  Good for him and good for Linden Hills, I thought.  Why should my neighborhood and the Windom/Tangletown neighborhoods be the only places to find the courteousness, expertise, convenience and product quality that I’ve come to expect from Settergren’s?

However, the article also noted that there was some controversy because the Linden Hills neighborhood already has a hardware store with a 90-year history.   The article reports how “some questioned why Dave Luger, the longtime owner of the old Co-op building, sold the property to a hardware store when other prospective purchasers presumably would have used the space in a way that doesn’t compete with existing neighborhood businesses.”

An emotional letter to the editor followed in late July criticizing Settegren’s decision to open a hardware store so close to Bayers Do It Best Hardware.  Two competing hardware stores, according to the writer, “will be a lose-lose-lose all the way around.”

After reading the letter, I had a fleeting thought that I should respond as it left a perfect opening to explain the economic benefits of competition.  And trust me, my Minneapolis neighbors need some lessons in basic economics.

While I never had time to respond, I’m pleased to report that someone did.  In fact, two people responded.   Pete Christensen penned a particularly strong defense of competition.  He wrote:

The emotional response is to protect the existing. In some cases the existing is merely a  zombie of a company plodding along. In others it is a thriving business. And while many do not like competition, it is competition that ultimately forces the production of better widgets, processes and solutions for the market. The tendency is to protect the one at the expense of the many. There is a desire to embalm the nostalgic feeling of the local corner store. Competition forces efficiency and product selection that will allow a store to remain viable. The many gift shops along Xerxes prove that very point. They all serve a market and offer products that can coexist profitably on that one block. 

The reality is the competing store may be larger and may be able to employ more workers. It may offer an alternate selection of product that the community wants. No one knows until it is created and allowed to try to earn a profit. The community through its spending action will decide what stays and what cannot survive.

Christensen’s entire response is well worth reading.