The Impact Of Big Box Stores On Small Retail Shops

Companies in the retail industry operate in a high price elasticity environment as there is not much product differentiation to leverage. Buyers face almost no switching cost if they chose a substitute offering better value. On the contrary, large and diverse population making small purchases works in favor of the industry. No one individual or a small group has the power to significantly impact the industry, but overall buyers enjoy have a high bargaining power in the industry.

The case is about The Sports Guy which is an independent sporting goods store owned by Bob “Rocky” Rhodes; his business is in the retail sporting goods industry. The store is located in the south part of a small town which is just outside the Greater Toronto Area. The town has been growing rapidly for the last few years and the area around the store has become a prosperous neighbourhood, making their location a busy commercial area. The Sports Guy store sells sports related clothing and equipment. About 70% of their sales consist of equipment and uniforms bought by local teams, and 30% of sales consist of regular (walk-in) retail trade. The store’s sales have increased over the years

Would you like it if your neighborhood slowly fell into ruin? Walmart and other big box stores destroy neighborhoods and should be banned. First of all, big box stores are bad for local business owners. Specialty stores lose customers, because of the convenience and a wide selection of products, people tend to shop there instead. For example, many butcher shops shut down, because Walmart has its own meat Section. In addition, having a big box store built in your area can change your daily life. They bring in more traffic and noise, clogging up the roads you usually take, and exchanging the chirping of birds for honking car horns. Dan Freeman, lives on Bleaker Street, had a store built in the area recently and he says, "its changed so much".

     The discount retailing industry, in which Wal-Mart competes, suffered slower growth in industry sales and in new store increases by reaching maturity. This resulted in a shakeout that has left the industry very concentrated. These trends are likely to continue due to intensified competition driven by companies seeking to expand market share by gaining efficiencis and economies of scale in distribution and purchasing. Indeed, in 1993 the top 5 discounters accounted for over 70% of total industry sales. Consequently, barriers to entry are high. Other barriers to entry include the high capital expenditure requirements of leasing or buying the

A foundation can be partnered with an expansive firm comprising of a few stores, or it can be a little, owner-operated store. Foundations likewise vary with respect to their scope: They can be broadened, offering a few unique items, or can be specific, offering just a slender arrangement of items. An essential piece of examination on retail markets has concentrated on understanding the conduct of chain stores, particularly grocery stores, across nearby markets. However, although chain stores are widely popular and attract a large amount of people, there are small stand-alone stores that survive, even in the midst of popular chain stores. Contrasted with chain stores, stand-alone stores have a tendency to have smaller scale and degree, have a tendency to offer more personalized items, and, at times, better administration and customer service, and by large, cost more. It can be contended that the capacity of stand-alone stores in retail markets are truly not the same as that of chain stores. Their present business system insists or have the tendency to emphasize that they are different from chain stores. “For example, a local stand-alone electronics store (The Stereo Shop) in Rochester, New York, used the following text in a television ad: “Those chain stores come and go… We treat our customers right. That’s why we have been here for 15 years…” A typical stand-alone store is

The growth and dominance of large, national chains is a ubiquitous feature of the U.S. retail sector. The recent literature has documented the rise of these chains and the contribution of this structure change to productivity growth in the retail trade sector. Recent studies have also shown that the establishment of single unit firms they are displacing. We dissect the shift towards large national chains on several margins. Explore the differences and entry and exit as well as job creation and destruction patterns at the establishment and firm level. With malls franchises strips big box realtors increasingly dotting the landscape there is concern that middle-class jobs in manufacturing in the US are being replaced by minimum wage Jobs in

Large corporations will often drive out many of the surrounding businesses or shops around it. As a result the remaining shops that survive the entry of a big box store located further away can receive greater profit as they’re less surrounding stores to compete with in the nearby area (Columbia). This is contrary to the common belief of being destructive to all mom-and-pop shops. Instead it proves generate more profits for surviving mom-and-pop shops that can now raise their prices up for shoppers nearby and enjoy less competitive pricing as there less shops close by to compete with. Whatever the smaller business specializes in also would also increase in pricing and generate greater profit and may also be why the business is surviving. Large corporations attract new businesses in a community. Large corporations provide a 48% increase in retail permits in areas with Walmart’s (Ordway and Kille). In addition, there is a direct correlation between the development of large corporations and an increase in tax revenue (Ordway and Kille). According to a graph provided by the Hatamiya Group, Wal-Mart has managed to increase tax revenues by 28% in communities that contain Wal-Mart. Cities often attempt to attract large corporations and favor them more as they prove to be of great benefit to their economy. Demonstrating that not only do large corporations benefit mom-and-pop shops, but they also can benefit the consumer through increased economic competition as well as improve the economy of an

A sense of identity as a person in a community, not just some number without a personality, can be nurtured through design. In such spaces, for example, Market Square in Pittsburgh, residents feel connected to other people as opposed to the atmosphere of anonymity that characterizes strip malls with undifferentiated chain stores or an overcrowded space overrun with both street traffic and chain stores, such as Times Square. Pittsburgh is often referred to as one of America’s “most livable” cities, and the diversity of people in Market Square attest to its democratic ethos. Businesswomen rush to work in heels or sneakers. Hipsters work at their laptops in coffee shops. Old men feed pigeons scraps of bread. Those without cars wait for buses.

Many downtowns first emerged as a distinctive place due to elite residents with homes in the area, which served as meeting places for important business transactions. By the late 19th century downtowns had typically been laid out with designated business blocks (Ford 2003). The growth of the business block as an economic center and booming downtown forced out any competition that were not appropriate with “high rents, social pressure and architectural change” (Ford 2003, pp 45). This was the origin of the spatial structure and land use patterns that are associated with contemporary downtowns. The origin of the town structure is most commonly affiliated with European cities as models of spatial layout. Specialty business and retail districts that characterized American downtowns and what we now image a good downtown to be are directly linked to it European counterpart. The key characteristic that defer from the European model was the tendency for American cities to be street-oriented rather then place-oriented. This contributed to the more linear structure of the city, business pursued locations on the “main street” rather then near major plazas or religious buildings (Robertson 1997).

Small businesses beware- Walmart is coming to town. Within two years of a Walmart in Chicago opening its doors, 82 of the local stores around it went out of business. Walmart store openings kill three local jobs for every two they create (Blasio, 2013). Walmart does this by reducing retail employment by an average of 2.7 percent in every county they enter. A study commissioned by the Los Angeles City Council in 2003 found that Walmart is a net loss for the communities it moves into. An influx of “big box retailers” such as Walmart was estimated to cost an additional $9 million in state health care costs and a loss in pensions and retirement benefits so large that the increase in public assistance necessary to make up the shortfall could not

First of all, big box stores have a positive impact on individuals as they provide a net welfare benefit to customers. To begin with, large retailers offer lower prices than small stores. Based on the finding of a 4-year long study, average prices for 20 food products of nontraditional retailers are 27 percent lower than small stores (Hausman & Leibtag, 2004). Another example for this is that dairy prices are 5 to 25 percent lower at large retail companies than traditional supermarkets (United States Department of Agriculture [USDA], 2006). That is to say, consumers are able to lower living expenses while shopping in large retail companies. Moreover, nontraditional retailers increase the range of shopping and food options available to customers.

Perhaps the most definitive example of New Urbanism has been DPZ's project, Kentlands, a 352-acre community in Gaithersburg, Maryland begun in 1990. An oasis of good planning in a sea of suburbia, it is not only a model of Traditional Neighborhood Design (TND) but also the predecessor to many other such neighborhoods developed within CSD areas. In Kentlands, much like Seaside, the Citizens' Assembly runs a recreation center and provides for common maintenance of public areas. Civic buildings and shopping in mixed-use buildings are within walking distance of the development's six architecturally distinct neighborhoods. This compact design reduces auto traffic significantly, allows children to go about their daily business without requiring a mother chauffeur and puts workplaces near their employees.5

Corporate world, today is littered with Multinationals and local giants who would do anything for a profit. They are either unfriendly to the environment, use animal and human testing or indulge in hoarding, corporate fraud and trading counterfeit items. The list of ways they could harm or cause civilians discomfort is endless. Wal-Mart, the leading retail company in the world has become a target to public resentment and wariness on part of small businesses. The paper supposes a scenario where Wal-Mart is opening a new store in a small town. It will predict the reactions of the residents and the small business owners and prepare a counter argument.

Over the past ten years, Walmart has been losing retail market share and their customers to competitors that can offer more reasonable prices at greater convenience for their customers. Walmart is losing money to Amazon and other online shoppings sites (D’Onfro). These competitors can offer the same or better price for a better quality item. Amazon can guarantee free, two day shipping if the package meets their requirements (Order with Free Shipping). To collect real data for the inspiration for our idea we sent out a survey to every teacher and many students in the district. Me and Cole had a total of 122 respondents, a majority of them were between the ages of forty one to fifty and were female. In one of the survey’s questions, several respondents wrote that they regarded Costco as a more superior and desirable retailer for a more potential shopping option. Respondent sixteen replied that the changes that must be made to Walmart for them to regularly shop there were “A higher quality in their goods while keeping the low prices, obviously that will be a hard thing to do but Costco manages to do it. In a sum up be more like your rival Costco. The marketing strategy of costco is simple, sell goods in bulk for the lowest possible prices. This can be a strong competitive edge for these retailer because their customers feel they are saving money and time, by buying more than what they need in a given amount of time. Changing the angle of the target customers can completely

Small and medium retail companies in cities and towns across the UK tend to face many