On Ninth Avenue in Manhattan, not far from where I live, there’s a small neighborhood hardware store called Chelsea Convenience Hardware, which is distinguished by its unlikely display of dozens of Russian nesting dolls in the storefront window. Inside, tools and supplies are piled to the ceiling, and when you enter, the owner, Naum Feygin, an immigrant from Boris Yeltsin’s Russia, looks up to ask you what you need.
The “convenience” in the store’s name is no misnomer, for the place is extraordinarily efficient. It is cheaper and faster than ordering from Amazon and offers expert advice that reduces the risk of buying the wrong thing. It is all too easy on Amazon, for example, to buy halogen bulbs that don’t fit your lamp base; Mr. Feygin has spared me many such headaches. And the store’s small size is a virtue: Unlike at Home Depot, you can be in and out in 10 minutes.
Nonetheless, Chelsea Convenience is set to close at the end of November, another casualty of rising commercial rents and competition from e-commerce. The closing is of no great economic significance, other than to Mr. Feygin. But it is a microcosm of the forces reshaping the United States economy, often paradoxically and for the worse. Why is a less efficient, less personalized and more wasteful way of buying screws and plungers — ordering online — displacing the local hardware store?
Mr. Feygin, who is both the owner and main employee of his store, was born in the Soviet Union in 1962. Like many Russians, he took a chance at the end of the Cold War to come to the United States. The Soviet economy hadn’t exactly rewarded entrepreneurship, and an older cousin living in New York City promised great things. “There’s money on the streets here,” Mr. Feygin recalls his cousin saying. “I’m too old to pick it up. You come, you pick it up.”
The American economy in the 1990s may not have offered instant riches, but it did offer genuine opportunities for people like Mr. Feygin. The economy was growing fast and was structurally different from what it is today: more open, less consolidated and free of onerous rents, even in big cities.
Arriving in 1991, Mr. Feygin first worked at a hospital and then tried selling musical instruments, without much success. He had more luck selling Russian souvenirs at flea markets — the hand-painted dolls and other Soviet curios that now populate his storefront window. “I must have put the prices too low,” he says, because the souvenirs kept selling out. He saved his money, and he and his wife had two children. In 1997, as the economy boomed, he bought the hardware store and has run it ever since.
Sometimes neighborhood stores close because their business model is no longer viable, as with video rental stores in the age of on-demand streaming. But that isn’t the case with Chelsea Convenience. Not only does it offer neighborhood residents better prices and greater convenience than Amazon offers for small-ticket items like screws and superglue; it is also of immense value to the superintendents, plumbers, electricians and others who repair and maintain buildings in the area. For these workers, Chelsea Convenience offers an array of specialized parts that might otherwise be difficult or impossible to obtain in a timely manner.
In this way, stores like Chelsea Convenience are a vital part of the infrastructure of a city. They also play a social role in the neighborhood that enterprises like Amazon and eBay cannot replicate. That this is a cliché of the mom-and-pop shop makes it no less true. Chelsea Convenience is a social hub; it seems as if someone from the neighborhood is always hanging out, chatting about something. “People come in here,” Mr. Feygin says, turning up his palms in a gesture of blasé wonderment. “They want to talk about their life, my life.”
According to Mr. Feygin, business began to slow down about three years ago, despite the growing economy. “Amazon, eBay,” he explains. “People ordering without advice.” They might not get what they need, but still they order online.
Here we can see how an ideology of convenience is reshaping the economy. Ordering things like tape or bolts online is rarely cheaper or faster than popping down to the local hardware store — not to mention the wasteful packaging — but many of us do it anyhow. Clicking on a product from the comfort of your couch seems more convenient — and that impression of ease can have more influence on our behavior than better service, quicker acquisition and lower prices.
Even more damaging than the competition from Amazon, according to Mr. Feygin, was a huge rent increase. He says he faced a near-doubling of rent, from about $6,000 to $10,800 per month, for his 600 square feet. Property taxes, which are tied to property values, also rose sharply. It was too much.
Competition from Amazon and a rent increase might seem like distinct phenomena, but they are two sides of the same coin. Both reflect the transformative consolidation and centralization of the American economy since the 1990s, which have made the economy less open to individual entrepreneurship. Amazon represents the increasing monopolization of retail; the high rents are a symptom of the enormous concentration of wealth in a handful of coastal cities like New York, San Francisco and Washington.
Both phenomena contribute to the same regrettable outcome: In today’s economy, returns on investment have shifted away from the individuals like Mr. Feygin who take personal risks. Instead, wealth is being routed to large middlemen, national monopolies, property owners and shareholders.
So Chelsea Convenience is scheduled to shut down on Nov. 30, not because of a recession or poor business decisions, but because of what amounts to a fundamental change in American capitalism. Mr. Feygin played by the rules as they were in the 1990s, when success in business mainly meant selling goods above cost. But that isn’t enough anymore.
The fate of Chelsea Convenience shows, in its small way, that business and capitalism can be at odds — that the drive for immense capital gains can drain the life out of human-scale business. For entrepreneurs, the American economy, with its extreme centralization, is becoming more like Soviet economy Mr. Feygim left behind.
As for Mr. Feygin himself, he isn’t sure what he will do next. “It is hard,” he says, “very hard.” He had hoped that his son, Willem, would want to take over the store. But Willem is “not so stupid,” Mr. Feygin says. “He works for a hedge fund.”
Tim Wu (@superwuster) is a law professor at Columbia, a contributing opinion writer and the author, most recently, of “The Curse of Bigness: Antitrust in the New Gilded Age.”
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