Venice, a city that was once a major maritime power and important center of commerce is now one of the most popular tourist destinations in the world. Its location on the Adriatic Sea enabled it to become a major stop on trade routes. As a main commerce center would, Venice flourished in population, economy, and power until the mid twentieth century. Originally Venetian retail was one of the strongest contributors to its economy but after WWI and WWII tourism became Venice’s main industry and economic support. Tourism is cited by most Venetians and even many outsiders, to be the main cause for the decline in traditional retail. The truth is that rise of tourism is only part of the cause of this decline. In reality, factors such as residential decline and world social and economic trends are also major contributors in this decline in the number of traditional and basic necessity stores such as butchers, bakers, and grocers.

However, a decline in the number of traditional food and basic necessities stores does not necessarily mean a decline in the retail sector as a whole. Since the total number of retail stores is not declining, it can only mean that touristic and non-food shops have been replacing traditional retail stores. There is indeed a decline in traditional retail stores in Venice that may be related to an evident influx of tourism related stores. Between 1990 and 2000 the number of traditional retail stores has decreased from 675 to 575. Seventy-five of those stores were providers of basic need items like bread, meat, and vegetables. In the same period the number of restaurants has increased by 110 and the number of bars has increased by 77 . This fact, however, does not necessarily mean that this is an inherently negative result of tourism.

Figure 1: Decline of basic necessity stores since 1971

The rise of tourism has also brought with it a demand for tourist oriented shops such as souvenir or high fashion clothes shops. The change of a retail sector is usually influenced by a transformation in the economy and physical surroundings. Based on demand in an area, the population an area must adjust its selection of products or supply. A high tourist population, for example, will most likely increase touristic product demand such as ready made food or souvenirs. An area such as Saint Mark’s Square contains 870 open stores, and as can be expected, many stores are targeted at tourists such as jewelry, Murano glass, and souvenir shops. The reality is that tourism in some ways is one of Venetian retail’s saving graces. It has been found in numerous cases that if a food store or traditional retail store closed and a tourist related shop such as a mask or souvenir shop did not replace it, it would remain empty and the city would lose one more source of commerce.

Figure 2: Closed store that has not been replaced

Tourism is actually a major factor in the stimulation of retail because tourists are usually the only people willing to pay for the often overpriced items in Centro Storico. However, those tourists who pay for overpriced items only facilitate inflation. For other tourists who are not as inclined to overpay or who simply cannot afford to overpay visiting Venice can become a burden. For some of these tourists day-tripping is the answer, where they save money by not having to pay for an overnight hotel stay. This however is less of a problem for Venetians, who pay at least 30% to 40% less than tourists for the simple fact that they are locals .

To illustrate this, Franco Conte the head of the Venetian branch of Codacons, the Italian consumer rights group is quoted saying, "If you are Italian, a croissant and a cappuccino costs €3.50 (£2.40)," he said. "If you speak another language, it costs €7. In restaurants, a pizza and a drink for two people costs between €20 and €25 for locals, perhaps cheaper for Venetians - but €50 to €60 if you are forestieri." Forestieri refers to foreigners and literally translated means "from the forest" or foreigner.

In 2002, the Euro, which was rapidly spreading across Europe, was introduced to Italy. When Italy adopted the Euro in place of the traditional Lira, prices all over Italy increased drastically and people were hit especially hard in Venice – an already overpriced and economically unfavorable retail setting. In a time when locals were unwilling to spend frivolously, tourists were the major contributors in maintaining Venetian commerce and income.

Figure 3: Tourists have been supporting Venetian retail

Why does the decline in traditional retail matter? Comfort level. Within the scope of retail, comfort level is defined as the ease in which consumers can obtain their basic necessities such as bread, meats and poultry, and fruits and vegetables. With a mean population age of fifty years, comfort level is a serious issue in Venice because as more stores close, people must walk further in order to obtain their basic necessities. An example of basic necessity comfort level of the sestieri of Dorsoduro is shown below . It can be seen that for most of the islands which make up the sestieri, the basic necessity comfort level is either below average or low.

Figure 4: Basic necessity comfort level map of Dorsoduro

The ability to obtain daily needs in one area is beneficial, convenient, and appealing to people. In Venice’s past it was common to find clusters of basic needs stores. Within a small neighborhood or block, typically there would be a butcher, grocer, baker and if you were lucky, even a candle stick maker. The importance of the proximity of cluster stores is that they rely on each other to offer different products. It is detrimental if one cluster store is not able to operate profitably or meet the local demand. If one of the stores closes, then the other stores next to it will suffer. A consumer may venture to another area to do his/her daily shopping, which in turn takes business away from the original sellers. In addition, if a bigger store such as a supermarket contains a wide variety of goods, it will probably replace the need to shop at three or four smaller retail stores. However, if a store with a diversified selection of basic necessity products such as a supermarket is not very near then the comfort level of a resident is not necessarily increased. This often results in residents travelling to regions with higher comfort levels and lower costs of living such as Mestre which is only 6km away seem more attractive to Venetian residents.

One theory about the level of comfort for an individual is presented by Christopher Bates. His theory states that there is a formula pertaining to the willingness of a person to travel in order to obtain his needs. P=F*k/t^2 is his derived formula which can be described as the following:

P= the willingness of the consumer to travel to the area where his needs are located F= the area of the store K= the physical attractiveness that the store can offer to the consumer T= the time it takes for the consumer to travel to the location

A value of P greater than 1 demonstrates a greater willingness for an individual to travel elsewhere to obtain their daily needs; whereas a number below one shows that an individual is less willing to travel a greater distance or to other areas to a destination to obtain products.

Taking into account the daily needs of the Venetians, the formula can show the overall satisfaction of the Venetians and why they will travel to the mainland to obtain their needs. Factored into the formula is the lack of availability and attractiveness that Venetian stores have to offer to their inhabitants. While the local shops around them might have the basic necessities that they need, these shops may not have the selection that the Venetians prefer. Although this may seem trivial, one must remember that as society advances, demands increase beyond basic primitive needs. A store may provide the necessities a Venetian needs such as basic living needs, but some luxuries are often desired. The stores on the mainland become more desirable to the shopper because of the wider availability of selection. Also, there are different modes of reliable, accessible and cheap travel to the mainland such as train, bus, and boat . This trend does not completely destroy the local traditional food store economy in Venice but it does put a strain on the stores. The supermarkets on the mainland become the main source of acquiring basic necessity goods but the local city stores are a source of convenience for picking up smaller daily needs. It has been found through survey of Venetians that approximately 93 percent of citizens shop at supermarkets either often or always, while roughly only 25 percent said they go to small stores either often or always .

The reasons Venetians shop for food at different types of stores is unique to each individual shopper. When quality and personal connection are indispensable, people tend to still favor small food stores, while the majority of Venetians purchase their food products at supermarkets. It is true that many citizens complain about the recession of small food stores and are very nostalgic for the old Venice, where one would visit the same butcher, baker, and grocer every day. For many, supporting these traditional businesses is indeed within their means, but they still choose the convenience of the supermarket.

Figure 5: One of the many supermarkets that has opened in Venice

This type of trend however is not unique to Venetians. It actually mirrors the general trend in most parts of the world. Currently, worldwide retail sales for independent grocers are on the decline. In modern society where convenience and low prices are everything, the majority of people prefer to use supermarkets.

A small analysis of 25 food stores and 4 supermarkets in the sestieri of Cannaregio showed that with the arrival of the 4 supermarkets between the year 2000 and 2005 all 25 food stores closed. Within that small sample of stores, 40% of the food stores were lost with the arrival of the supermarkets while the other 60% was replaced by other food stores. This small analysis is not enough to prove that supermarket openings is directly causing a decline in traditional food stores but it is a valid assumption that it may be one of the main contributing factors. Below is a graph representing the decline of traditional food stores from 1971 to 2005 as well as the increase in store closures .

Figure 6: The decline of basic necessity stores since 1971

Venice is a city of numerous antiquated laws - many of which have been “on the books” for centuries, but rarely enforced. John Berendt mentions in his book The City of Falling Angels when quoting a Venetian resident, that if the average citizen “added up all the taxes and fees you supposedly owe, you’d have to pay something like one hundred and forty percent of your income.” These laws are fluid and always changing and the retail stores change accordingly in response. Up until June 11, 1971 Venice only required an informal licensing agreement in order to operate a retail store. It was then that Venice finally began to require specific and limiting operating licenses for these stores according to the goods they offered (Law 426). This is when the first retail data collected by the city began to appear. Then in 1998, Law 114 was passed. This law allowed any store less than 250 square meters to be able to open and operate with little more than notifying Venice of their opening and plans. This allows the large majority of Venetian stores to operate without a formal license, but luckily there is still some tracking done on the basis of the store opening notifications .

The strictest laws regulating tourist shops are placed on two of Venice’s most famous areas, the Rialto Bridge and St. Mark’s Square. Store licenses from other areas are non-transferable to these two regions. This limit does not apply exclusively to tourist shops in these areas, but bars and restaurants as well. If a shop closes in this area then one is able to move in, but the absolute number of stores in the region is fixed, such as 870 stores in the sesteri of San Marco.

The government also attempts to shelter residential areas from tourism. These areas are Santa Margherita in Dorsoduro, San Leonardo in Cannaregio, Via Garibaldi in Castello, and the Rialto in San Polo/San Marco. In areas such as those it is actually illegal to open any store that may fall within the tourist category. The government even offers small incentives to anyone who opens a food store in one of these four zones such as 50% reduction of the price for trash removal and tax exemptions for public space protrusions such as signs, awnings, or displays.

However, street vendors are a different situation. These vendors are actually rarely taxed, if at all. In actuality, almost 27% of Italy’s gross domestic product is not accounted for due to the lack of taxation . Their plastic, garbage bags full of purses, sunglasses, and a multiplicity of other items to be sold can be found throughout the island of Venice. This untaxed commerce does not contribute much to the economy but rather just lines the pockets of the individual vendors.

Figure 7: Many vendors line the streets of Venice

Another aspect that needs to be taken into consideration when analyzing the Venetian retail dilemma is social trends. Young Venetians are opting to move away from Venice in search of lifestyles more like other more modern cities. These young people often go to college instead taking over the family business. When the owner of a traditional retail shop retires, it is customary for him to hand over his store to their children, however this next generation tends to not to be interested in the small shop owner life of long hours with little incentive.

In accordance with world trends towards modernization, family dynamics are also changing. Family size is smaller today than in the past. Rossella Palomba, of the CNR National Institute for Population Research has found that Italian couples feel under strong pressure to become parents - but "one child is enough to fulfill this social duty." So Italy has become the land of the single bambino or bambina: a quarter of women born in 1963 have only one child . Even eating habits have changed. Traditionally, Venetian families would all eat together for the majority of daily meals. People worked close to home and could travel back for meals very easily. With commuting distances increasing, workers often can not come home for lunch; it is much easier to eat out. Without large meals being made at home, less food is purchased from stores.

The Venetian retail situation is a multi-faceted issue with a number of influencing factors. Due to the dynamic nature of economics and more specifically trading, there are a number of factors that affect the development. The evolution of retail stores is affected by many issues such as industrialization, globalization, and the influx of tourism and it is a dynamic ever changing cycle. Trying to cite one specific aspect of life such as Tourism as the sole cause for traditional retail decline is a very presumptuous move. The decline is more likely a combination of social and economic factors such as costs of living, politics, population loss, employment, and world economic trends.

In cities like Venice, it is easy for the city’s socioeconomics to be overtaken by the tourism industry without proper regulation. In order to keep Venetians on the island, it is vital that measures be taken to preserve both residential areas as well as food stores so citizens can lead lives comparable to that of other cities. The Venetian government has taken steps to help regulate tourist shops in certain areas, as well as given incentives - albeit small ones - to shop owners in some of the residential areas. However, the Venetian government is notorious for its bureaucracy and inefficiencies that prevent proper regulation practices. Short term traditional retail will survive, however its future is not known. If it is to sustain itself, a balance between traditional and touristic retail and their influencing economic factors must be attained in order to preserve the traditional retail stores and the Venetian residents.

References

"US Department of Labor: Grocery Stores." http://www.bls.gov/oco/cg/cgs024.htm (accessed 10/20, 2007). Berendt, John. The City of Falling Angels. New York: Random house, 2005. Chandonnet, Greg, Andrew Christo, Patricia Pope, and Karen Singh. The Evolution of Stores and Decline of Residential Comfort: The Availability of Necessary Goods in the Historical Center of Venice. Worcester, MA: Worcester Polytechnic Institute, 2004. Goetze, Rolf. Understanding Neighborhood Change : The Role of Expectations in Urban RevitalizationBallinger Pub. Co., 1979, . Greene, Ta Karra, Benjamin Isabella, Freddy Jervis, and Danielle Modeste. Residential Comfort Level: An Analysis of the Venetian Retail Sector2005.