Chains have many advantages over small businesses that give them more durability during downturns. They have deep pockets, and greater ability to borrow. The l

Chains have many advantages over small businesses that give them more durability during downturns. They have deep pockets, and greater ability to borrow. The location today is unprofitable, but they can afford to look out a year and decide to eat losses, expecting to make it up. Small businesses, especially retail, are much more susceptible to cash flow disruption. They also have economies of scale that let them run at higher margins, so they often will be losing less during tough times because they are spending less. You can see it in action in almost any trendy neighborhood. Each downturn kills some small shops, and chains survive. A unique shopping district in 2007 now starts looking like an outdoor Westfield Shopping center. Is the Apple store in Brooklyn closing down because it isn't profitable today? They can sit on the lease for two years with zero revenue if they want. Meanwhile the boutique denim shop or tea house is already out of business 2 months ago.