Can Mom-and-Pop Shops Survive Extreme Gentrification?
When I was about 6, my dad and I were sitting near Wall Street when I asked him why so many men were wearing suits and ties. It was the 1970s, and we lived in Greenwich Village, a place where you could see men wearing almost anything except a suit and tie. My dad, a theater actor, told me that the people on Wall Street cared about money, and as a result, they had to dress formally. I even remember feeling bad for these poor chumps.
Since the 1970s, though, the financial industry has grown faster than nearly any other in size and as a proportion of the overall economy. In 1970, it was about 4 percent of the G.D.P. Last year, it was twice that. The impact is felt everywhere in the United States, but it may be most evident in the Village. The artists, weirdos and blue-collar families that I grew up with (save the lucky rent controllers) are long gone. They’ve been replaced, in large part, by guys in suits.
During the ’70s and ’80s, the Village was the Jane Jacobs ideal, a neighborhood crammed with small mom-and-pop stores. That’s changed too. That old house-plant store is now a Marc Jacobs boutique. The dowdy bird store with the parrots in the window became Magnolia Bakery. The onslaught of luxury brands — Ralph Lauren, Jimmy Choo, Burberry, among them — has been so relentless that I’m happy when I see one of the old shops still in business. As an economics geek, I also wonder how in the world they survived. How have they innovated? How were they shrewd enough to overcome the rising rents and profit off a new, wealthy clientele?
I recently stopped by the oldest Village business I could think of, McNulty’s Tea & Coffee Co., which was established on Christopher Street in 1895. David Wong, whose family bought the place in 1980, didn’t have any savvy business secrets. When I asked how business had changed since the ’80s, Wong shrugged. “It’s about the same,” he said. What? Back then, nobody was talking about fancy coffee. I remember avoiding walking on this block for fear of being propositioned.
Wong clarified himself: Yes, the neighborhood had changed drastically. So had its taste for upmarket coffee. McNulty’s used to stock a fairly small selection; fancy beans, like French Roast Java, sold mostly during Christmas. Now their big sellers include Puerto Rican Yauco Selecto, which goes for $26 a pound. But demand has grown at just about the same rate as the rise in rent and the price of beans. And the Wongs have done little to innovate. McNulty’s had the same disheveled charm that it always did, from the beautiful Chinese tins that held tea leaves to the wall of rubber stamps they use to mark everything. It doesn’t sell coffee online. “We’re not way richer or poorer,” he insisted. “We’re about the same.” And this didn’t bother him.