Predatory Service: A Tale


Once upon a time in Greater Washington, D.C., there was a family-owned hardware, home remodeling and garden store chain. They were big warehouse stores, and pretty much synonymous with hardware, flowers, lawns, leaky pipes, Sunday shopping excursions, and earnest, if not always rapid, service, for decades. The old chain was pretty much the only game in town too, except for a few small stores scattered around in various town squares.

Then, seemingly over-night, several new, big, warehouse hardware, home remodeling and garden stores appeared across the area. They seemed a little cheaper, but not much; what they had, however, was this fantastic service model. The place was crawling with eager young experts who not only helped you find what you needed, but who also knew how you should build it, cultivate it, paint it, or tear it down. The usual “what the hell am I doing and where is that stuff?” anxiety of a visit to the old hardware chain was replaced by a feeling of confidence and being in the hands of friendly masters of their trade. It was wonderful.

It took less than two years for the new chain, a national one, to run the old D.C. institution out of business. Once that was accomplished, the eager, young, friendly experts disappeared, and prices rose. Now, when you went to buy fertilizer or paint or a power saw, you could wander for 30 minutes without encountering an employee. If you did, the chances were that he or she was on break, surly, and useless. The store rapidly moved in self-checkout machines, so even live cashiers were in short supply. The service, once so much better than the old chain’s, was now substantially worse. But there was no alternative.

It is taking longer, but now a grocery store chain is in the process of doing exactly the same thing around the D.C, area. The aggressive service model—if you asked for anything from the gazillion employees wandering around, they lead you to exactly what you needed, eschewing the traditional “Aisle 14!” answer, and of course, it never is in “Aisle 14.”—has already taken much of the business from the two grocery giants that held the area’s business for decades. I think I know what’s coming.

This technique is dishonest, a bait-and-switch, really, and from an ethical perspective no different from the anti-competitive, sometimes illegal tactic of predatory pricing. Yet it appears to be the perfect business crime. I don’t see how the government can make hiring more and better trained employees than the competition illegal, nor can I see how you can stop an enterprise that has driven its competition out of business from maximizing profits by cutting staff and service, if no competition is around to attract its deceived, disillusioned and ill-served customers. It’s just unethical, vicious, miserable conduct, that’s all, but it works, and most of all, there’s no apparent remedy, or consequences for those who engage in it. In this area, a homeowner has little choice but to validate the unethical strategy by giving business to this despicable chain, until a competitor comes along that has decent service—and the odds are, that one will just be lying to us too.

When I hear someone say, “Good ethics is good business,” I think of hardware stores in the Washington, D.C. area. Sometimes, more often than we like to think, terrible ethics is good business, and if business owners care about business and profits more than ethics, then bad ethics it will be. If businesses won’t avoid such unethical strategies and practices just because they are wrong, no matter how well they work and how hard they are to enforce against, then there is no way to protect the public.



14 thoughts on “Predatory Service: A Tale

  1. Hechinger Hardware, you’re sorely missed. Home Depot . . . shopping in your stores is a royal pain

    I’ve spent time in Japan, where sales staff are uniformly polite, devoted to assisting you in every way until the point-of-sale, and, most important, knowledgeable about the function, placement, and operation of the products they sell.

    Not so in the good ol’ US of A, where reasonably literate but marginally trained “sales associates” are usually of no real assistance, leaving you to your own devices to figure out window sizing/installation, electrical work, the proper choice of power tools, plumbing fixtures, etc. (assuming you can find what you’re looking for in Aisle ___).

    I’ve observed the many building contractors who queue up outside Home Depot at 6am to procure their daily supplies, and they no doubt are well served by Home Depot. But as for “Harry Homeowner,” Home Depot’s sales staff are by and large unhelpful, so you’re basically on your own.

    I do believe in the power of competition to improve service, efficiency, and performance; . . . . I guess I’ll just keep waiting until it comes back to the hardware business in Washington, DC.

      • That’s why I said local hardware store. We have several that I go to, I merely specified mine as Home Depot (not to assume that’s who you were discussing, but because the previous poster did and its also fair to commend that which deserves it).

        Needless to say, the local Lowe’s has good service as well, but slightly less so than Home Depot and their prices are slightly elevated. So unless its a lucky item that is less expensive I tend to the local Home Depot.

        • I suspect the relative decency of the big box hardware stores vary by store. I’ve had great dealing with my local home depot, and horrible ones with my local Lowe’s, but move 10 miles west to my parents’ area*, and the Lowe’s is considerably better than the Home Depot.

          *Yes, in Maryland, 10 miles is often a completely different area.

          • I’ve have the same feeling, I commute into the DC area and work across the street from a Home Depot. I live out in the north western suburbs and have a home depot about 15 minutes from me. I would rather drive the 15 minutes to the home depot by my house than drive across the street to the one by my work.

  2. The local grocery store around here hasn’t been locally owned for years . I worked for them when they were still family owned and they were wonderful. They went down hill for a while but now are remodeling and upgrading all their stores. There are two other upscale grocery stores moving into the area that I have dealt with on a business level and the one out of North Carolina has to be the honest and ethically run company I’ve ever dealt with when building a store . When we had problems or conflicts in the plans all we had to point out what was wrong and they paid the change orders. No arguing , no beating us up they just paid the change order.

  3. As a native Bostonian whose family moved to this area when I was five years old, I dearly remember Hechinger’s, Peoples Drug Stores, the Woodward & Lothrop department store, Jellef’s, Garfinckels’, etc., etc. They were all bought up by the big chains, and for the most part, we are (as with airline mergers) experiencing less and less choice about where we can shop or do business. When, or will, anti-trust laws kick in? Or can they?

    I will remove from the “bad” list our local CVS, which has had the same pharmacist for about 15 years, who knows us well, whose employees know me by name, and except for a terrible parking lot, feels like a neighborhood store.

    In response to the big chains and their claim that economy of scale makes prices lower, I would state, as a company owner of a small business, that time IS money, and spending time wandering endless aisles of various goods with no one to help you find what you want in fact raises the actual price of my dealings with them.

    To every extent possible, my husband and I try to support small businesses (many family owned, including restaurants) in our area. They deserve to survive, and we are doing all we can to support them.

  4. I have to say that if the first store had realized that it was being out-performed in the service area, they needed to improve in that area. If they had, now that the competitor’s standards have slacked, they’d be the ones raking in money right now. You’re also assuming the worst of the new grocery chain – it’s quite possible that they will maintain a dedication to quality service. Not really fair to assume they’re going to follow the same arc without any evidence of it, simply because they’re a) new, b) not locally owned, and/or c) a big company.

  5. Reminds me of the old Milton Freedman quote:
    ‘There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud’.

    So often the end portion of that quote is left off, but it’s the foundation to free enterprise; business must act ethically.

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