Will mega-convenience store chains drive out the competition?

August 31, 2023 5:40 pm

(Photo by Jim Obradovich for Iowa Capital Dispatch)

It is a pleasant drive, our journey to work in the morning. We get on North Union Road, a county black top two lane passage, and proceed toward Cedar Falls. For a while, the road runs parallel to the Cedar River, then by a collection of well-maintained residences and finally, as one approaches the intersection of 1st street, cornfields on both sides. You can see how the crops are progressing if you are interested.

But this writing is not about North Union Road, it is about First Street, which runs from the west to east into the populated areas of the community. Initially, a two-lane road, it quickly turns to four with a turning lane in the middle. The first convenience store you see is called the Big Ten Mart. After the Hudson Road intersection is the Music Station. Then the Metro Mart at the Center Street intersection.  All of these are well-established stores, providing a variety of services and products.

If you were an aspiring businessperson, you probably would not think what this stretch of transportation needs is another convenience store, but on the southeast corner of Hudson Road and 1st Street, here comes Casey’s General Stores.

This is not unexpected because that is what Casey’s does. It moves into close proximity with another convenience store and then gradually overtakes them because of the financial resources the large corporation has at its disposal. In this case, it helps that Casey’s has an agreement with Hy-Vee to honor its gas card discount.

Can these other businesses survive Casey’s intrusion? I do not know, but I do not normally bet on the ant when, armed with a fly swatter, it takes on an elephant. Meanwhile, another Iowa convenience store chain, Kum & Go., has been sold to a Utah-based chain called Maverik. More consolidation.

It certainly will not be an economic battle that attracts national attention, but some could argue it should. It reflects a growing nationwide trend, which is the continual accumulation of wealth in the hands of a few.

When U.S. Sen. Amy Klobuchar ran for president in 2020, I bought her book, but didn’t read it because it was, well, another book by another person running for president and I assumed it promised that the sun would always shine on America. I was wrong.

The book, “Antitrust,” details the history of the battle of taking on monopoly power in the United States. It does trace the long and painful path to the emergence and use of the Sherman Act to fight against the interlocking trusts and the use of monopolies to control the national economy. It details the winning efforts to rein in the power of J. P. Morgan, Andrew Carnegie, William and John D. Rockefeller and others.

While Casey’s is far from a monopoly, we face the same challenges today in many industries. In their new work, “The Big Myth,” Naomi Greskes and Erik Conway detail how much the concentration of money and power have flowed to the chosen few:

“At the level of the whole society: the three million people who make up the wealthiest one percent of Americans are collectively worth more than two hundred and ninety-one million who make up the bottom ninety percent.”

The whole concentration of control by a few companies has brought us down to only four, soon to be three, pharmaceutical companies, three major telecom companies supply 99% of wireless services. Nationally, we now have five book publishers. Much of this has occurred because the leaders of both political parties thought we should be the best friend of big business not the regulator, and that somehow, helped with generous political contributions to both parties, big was better.

Why this is a threat to the American economy and our future growth is, upon reflection, easy to see. The free enterprise system is successful because of competition. If the large, established business can determine who can start or remain in business, prices to consumers rise while ingenuity falls. Those who control the market will and do not feel the need to research, develop better products, and to innovate. The fundamental pillar of a market-driven economy is being removed. There is no desire to build the better mouse trap.

As for me, I will still drive down North Union Road, turn onto 1st Street and head toward Cedar Falls. But national changes will impact the view.

This column was originally published by the Waterloo-Cedar Falls Courier.

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Dave Nagle
Dave Nagle

Dave Nagle, of Cedar Falls, is a former Iowa Democratic Party state chairman and three-term U.S. congressman from Iowa.