Nail Salons Replace Chain Stores as Public Enemy No. 1

Nail Salons Replace Chain Stores as Public Enemy No. 1

Jaded New Yorkers bemoan the prevalence of Starbucks and Chase branches, which often replace quirky, locally owned businesses as rent for retail space escalates.

One city councilwoman, Jessica Lappin, even campaigned on ending “duanereadification,” calling out the drug store chain that seems to be on every corner in Manhattan.

Despite the perception that chain retailers somehow chip away at the fabric of life for urban dwellers, a New York Times infographic earlier this month painted a different story, showing the preponderance of nail salons versus coffee outlets selling $5 Frappuccinos.

The illustration, published alongside reporter Sarah Maslin Nir’s multipart series documenting exploitation of workers at nail salons, showed there were more than 30 nail salons in one Upper East Side neighborhood that is home to six Starbucks stores.

It’s too early to know if the city and state enforcement actions spurred by Nir’s articles will drive salon owners to suddenly start paying minimum wage and offering humane working conditions.

What is clear is that a sizable number of consumers are willing to pay more to shop at businesses that are socially responsible. 

It’s possible to buy a $1 cup of coffee from the ubiquitous New York City coffee cart, yet caffeine-craving Starbucks customers are willing to endure long queues and spend twice as much for a “tall drip with room.”

Starbucks is a good citizen.  When most businesses hung “Restrooms for Customers Only” signs, Starbucks became a welcome relief station in New York City.  That’s on top of the free wifi, fair trade coffee beans, college scholarships for employees, spousal benefits for gay staffers and complimentary five-pound bags of used coffee grounds for gardeners – not that many urban dwellers have much room to grow tomatoes.

Following Duane Reade’s acquisition by Walgreens, community engagement has really stepped up.  The top sponsor for Sunday’s New York City AIDS Walk was the Duane Reade Charitable Foundation.

Bright red $1 foam balls are selling briskly at Duane Reade and Walgreens stores nationwide in the days ahead of Thursday, the inaugural U.S. Red Nose Day, a fundraiser aimed at helping children living in poverty.  Walgreens President Alex Gourlay said Monday the retailer and its partners had already contributed $5 million to the cause.

Chase, too, understands the need to do more than keeping its ATMs stocked with crisp twenty-dollar bills.  The banking giant recently plunked down $100 million to help rebuild embattled Detroit, donated $1 million for Nepal earthquake relief, and doubled down on its commitment to hire 200,000 veterans of the U.S. military. 

While the nail salon industry remains highly fragmented, it should not require a private equity-backed consolidation to prove that consumers will patronize – and  pay a premium for – businesses that authentically adopt CSR principals.

We’ll be watching to see if an industry roll-up happens, or if a national luxury hotel begins marketing its spas as models of good citizenships versus storefront nail salons.  Another possibility is that a trade group, like the Korean American Nail Salon Association, could set CSR standards and require members to adopt them.

My guess is that an outsider will quickly build a nail salon brand elevating the importance of employee “partners,” the use of non-toxic products, and meaningful contributions to the communities where these parlors operate. 

Let’s hope they nail it.