Do shops like Walmart and Starbucks kill local business?
By ugachaka
@ugachaka (297)
United States
January 18, 2007 11:13am CST
I had an economics professor who refused to step foot inside a Walmart because of the detrimental effect it had on local ma and pa operations. There is a Walmart being built just down the road from me, but a bunch of shops lining the road leading to the construction site have signs like "Go Away Walmart." On the other hand, in a community that I'll be moving to in a couple months, there is a strip mall with a couple shops but not a lot of business. Everyone in the area is thrilled with the idea of tearing it all down and putting in a Super Target. How do you feel about the idea of major chains moving into your area?
7 people like this
55 responses
@KrisNY (7590)
• United States
18 Jan 07
I think WalMart is great- If the ma and pa stores would lower the prices as WalMArt does then I would shop there and not WalMart. Every business in America (besides non-profit) are out to make a buck--- They have to be.. So if Wally World closes the doors to some small shops- sorry.. I;m still going to shop where I can get the best price.
Now on the other hand-- I don't shop for shoes or clothes here. I go to the local Boot shop for boots- they are higher priced but better quality.
So cost and quality is what I look for.
Look at Blockbuster.. they have no more late fees- and new movie rentals are for 2 nights-- Keep them up to a week before being charged- Why would I go to the local video rental place when I get charged if I am a day late and the rental price is the same... I wouldn't..
These bigger chains can do this because they have more stores which equals more profit.
I'm all for them!
@SaraCate (184)
• Canada
19 Jan 07
WalMart's prices are artificially low. They bully companoes into selling to them at lower and lower prices - to the point that, on their WalMart accounts, some companies are making something like a .03% profit. But the quantities are so big, they can't afford to lose the WalMart accounts. So they fire people, work the ones they have more relentlessly and at lower pay, etc. ...and eventually farm out the jobs overseas. (And shopping at such places supports those practices...)
The other issue with prices - WalMart employs the most people on welfare in the U.S. (They do this deliberatly, making sure to rarely provide fulll-time schedules, forcing employees to work over their scheduled hours without compensation, etc.) Are you really getting a lower price by the time you pay welfar for their employees? (Welfare comes out of *your* taxes!)
As far as quality - I suppose brand names have to be consistent, but beyond those, you're *not* getting quality at WalMart!
The other side of shopping at "Mom&Pop" type places is that IF you invested a little upfront, you might actually get lower prices in the future. Many small business have more at stake in terms of survival and thus more motivation to provide good service and keep their clientele.
Two examples: My husband and I have a favorite used bookstore in the town I used to live in. After several trips, the owner recognized us, and consistently gave us generous discount - far below his listed discounts. My grandparents anjoy going to a particular local restaurant. Grandma tells me regularly about free desserts, sometimes not being charged for lunch, etc.
So - for the most part, if you're willing to rub someone else's back, they'll eventually return the favor. If not, you get to live with supporting all the above, plus missing out on the personal relationships, superior service, and possibly even - *gasp!* - lower prices! at small businesses.
~Sara
@SouthernRain (59)
• United States
19 Jan 07
SaraCate, you said it all except that complacency is going to do the US in. Some people just don't get it. Bravo!!!
@not4me (1711)
• United States
19 Jan 07
I live in a fairly small town in South Carolina and the city won't allow a Starbucks to be built in the city limits because they fear it will take away from the local cafes. I personally think this is lame. This town has hundreds of tourists com in every week and this city refuses to build up! There is no mall, no good shopping center and only a super walmart where the employees are so lazy they never bring in the carts! Cities like this need to get off their high-horse and bring in some more business. I never srink coffee unless it is Starbucks. I'm not a big coffee fan but I know what I like.
1 person likes this
@jeweledbluerose (3061)
• United States
19 Jan 07
In the business world there is always going to be wins and losses. And anyone who owns a business pretty much knows that you have to stay ahead of the game to keep in business.
People should also realize that the once "small town" civilization that was going on will not last forever. The human population is growing and with that growth things are gonna change whether we like it or not.
It's not Wal-mart's or Starbucks' fault that they know how to run a business and do it pretty dang good at that. And no I am not saying that smaller businesses don't know anything about the business world cause they do, they just never wished to expand their business outward more so in a sense it doomed them to their own fate. Smaller businesses just need to learn how to step up or get out of the game all together.
@kapileo (47)
• India
19 Jan 07
Big Daddy of Shopping experience Walmart as all knows is THE strongest shopping experience that one can have.The way the company is able to influence other small players in the market is worth noting.Its an art for them to get the products at a very reasonable rate and then pass on this benefit to the customers......
This is the major reason why Walmart has been able to lead the pack in retailing in the US.Even in our country India, Walmart is tying up with a local company named Bharati to franchise their products as the government here feels that the entry of Walmart can have a very big influence on the local small players which will ultimately end them down in the drains.But on the contrary it is very welcome as it will help improve the quality of the product provided to the customers as competition among Walmart and Reliance and other major players will come into place...
On the whole it will be a slap for the small players but ultimately it is going to help the customers and the society.
@nw1911guy (1131)
• United States
19 Jan 07
Uh you should know that, on average, WalMart's products are lower quality.
@AmberNormandin (883)
• United States
19 Jan 07
well i personally shop at walmart a few times a week because they have what i need. some of the local ma and pa places that are left dont carry what i need. i do think the big chains are running out locals, and its not right, but i think the locals should send a survey out in the mail about what customers need that they dont carry and maybe they will get more business if they take interest in the needs of the people.
1 person likes this
@mydogisdaisy (99)
• United States
18 Jan 07
It is absolutely true, whether it is a big store or a new small store that is the competition. Whenever a new place opens that means some revenue will go to the new store and not to the original store. Now is it because of prices, most likely.
Also whoever said they go to Wal_mart because of prices and not small stores and that the small stores just need to lower their prices. Guess what Wal-Mart pays way less then a small store does for their merchandise. for instance my Mom and I own a scrapbook store. There is a product that both we and Wal-Mart carry. Wal-Mart sells the product for $169. We as the store pay $165.50 plus shipping for the same item, which means my cost is more than what Wal-Mart seels it for! How can I lower the cost and still make a dollar? I can't so I have to decide whether it is worth carrying the item and only make a few dollars or letting Wal-Mart sell it and them get the money.
Due to Wal-Marts business demands and practices many farmers and companies that Wal_mart buys from only make pennies on the dollar so that you can save a nickel or dime. I prefer to shop at stores like Target that have fair business practices and support fair trade.
Crystal
1 person likes this
@sharone74 (4837)
• United States
19 Jan 07
This is the way of the modern world, The way of the new industrial revolution is conformity, comfortability, quality, and better prices for " the masses". I am certain that Sam Walton started pretty small himself. In fact he was probably born into a mercantile family. The businesses that cater to as many of the human "neccessities" crammed under one roof at a reduced price that individual and even smaller merchant groups cannot even hope to aquire the same types of items at a 300% markup from what Sam and his 'Marts' are paying for the same item, often even from the same distributor!
The sad fact is that Wal-Mart and Costco and Ross are aiming to put the "little guys" in the shade so that they can line their pockets with ever more of the "market share". Since they are undercutting their much smaller competitors for both cost of goods and are able to sell those goods at a better profit margin and still sell it for less because they sell VOLUME. Volume is what business is all about. How many units? When do I get them? How much do I pay? And how much am I able to sell them for to make at least a 150-300% markup on cost? There are an ever growing number of distributors and importers who will not even allow Mom and Pop an audience into their August Prescence because even if they were to mortgage the mom and pop shop they still wouldn't equal the buying power for a year of Wal-Marts purchasing for 3 days!
Alas and alack, the mom and pop shop is soon to go the way of the buffalo and Indians roaming the American Plains in warpaint!
@rash219 (808)
• United States
18 Jan 07
the longer the chain the costlier the product become maybe you got to remind that to your professor not everyone has a good spending budget....if a consumer can get the same product for 10-50$ less from wallmart y will he go to a local buss. plus there the benifit of looking thru a variety of product under one roof saving a lot of time and money....personally i would be thrilled....but if i had my own shop well i wll be one of the ppl standing with a sign.....
@nw1911guy (1131)
• United States
19 Jan 07
Ahh but when WalMart starts buying the goods from overseas where the labor is cheaper then what? Particularly if you worked for a company that was supplying them but can't compete on labor costs.
@UcoksBaBa (800)
• Indonesia
19 Jan 07
poeple lucky was in hand of God for me but if the fact the walmart is a octopus in local business they can destroyed the other,and in fact them kill the effort the other,especially vertical markets traditional at hand around walmart, but them really killing the local business according to me.
@tanujbhargava (310)
• India
19 Jan 07
Yes ..
They do ... Because they deliver the same products ! .. but the brand name Wallmart adds to it !
But I don't see it as wrong. Because everybody is here to make profit.
If they are selling items at low prices.. its their management who is looking for it, they are not here for social service..
@crazynurse (7482)
• United States
19 Jan 07
When superwalmart came to my small town, within a month Kroger closed completely. Another large chain, Food City, one of its two stores in this town. All but one locally owned 'mom and pop' have closed. The one that remains is only open because (in my opinion) it serves as a tax write off for the owner. Superwalmart ruined this town. They charge what they wish, have terrible service and do not support local chairities or anything.
@nw1911guy (1131)
• United States
19 Jan 07
Another good point, a complete lack of contribution to the local area. And the customer service at WalMart makes me so mad I can't stand it.
@maikeeho (196)
• Philippines
19 Jan 07
well, guess its time for the local shops to do something for their shops so they can keep up the competition. everybodys just trying to make some money. Compet in healthy way
@talfonso (246)
• United States
11 Mar 12
Sometimes yes and sometimes no. While I have heard stories on how small towns fueled by small businesses (corner penny candy shops, florists, bakeries, shoe stores, etc.), there are few towns that didn't suffer much from the coming of Walmart.
Why not? Well, people need those jobs and people need cheaper stuff to buy. Case in point: the Supercenter in Brandon, FL, near my home. It's thriving because people want to buy necessities like food and clothes on the cheap. Sure, they might have killed a few businesses here and there, but there are some local stores that still thrive. Even the local Asian food mart is thriving despite Brandon having, like, two Walmart stores.
But let's not forget that even if it didn't faze some local businesses much a few times, Walmart still has its nadirs. I mentioned before that it adds new jobs, but the wages for the most part are not impressive. I heard story upon story about workers having to go on WIC, Medicaid, and other government assistance because they can't afford health insurance.
And applying for jobs is just as hokey as working for them. Nowadays they have those pointless personality tests by Unicrazy/Crudnos in their applications. If you answer so honestly, chances are that you're not able to get the job. Better have a cheat sheet and sanity handy to apply there
Despite having watched the film, Wal-Mart: the High Cost of Low Price and videos of people against Walmart and read articles, stories, and websites about being anti-Walmart, it has a few bright spots. Sure, it kills local businesses for the most part, but a few of them see stability in customers despite its stores' presences.
@7nicole1 (1633)
• Canada
19 Jan 07
Im from a bigger city so it really does'nt seem to effect anything here but I do know a COSTCO bulk warehouse is moving here and there's a big worry it will take all of Wal-marts business. I say good because I hate Wal-Mart. They are all about money and I find the staff to be rude and not really helpful at all. Your right though nig businesses do take away or destroy smaller businesses.
@maxine553 (107)
• Canada
19 Jan 07
I did a business course just recently and as far as wal-mart goes a company should expect a 10% loss of sales per month
@missyd79 (3438)
• United States
19 Jan 07
being on a limited budget, i shop around to different stores to get the most of my money. my step father on the other hand, hate walmart and target chains because he is like why drive so far out of your way when we have a grocery store and a hardware store a mile down the road. he is all for the ma and pa shops.
@marriedman111399 (1207)
• United States
19 Jan 07
I think that stores like Walmart do hurt smaller business. They cant compete or carry all of the brand names that a bigger store can. We have a Walmart opening up right near my house. I do shop at Walmart though because they have good prices.
@whiteheather39 (24403)
• United States
19 Jan 07
It is probably very admirable of your professor to stand up for his convictions. To me I will buy where I can save the most money and that is mostly major chains who can afford to sell cheaper than smaller operations. Bottom line the dollar savings is the name of the game for most consumers.
@sims1955 (36)
• United States
19 Jan 07
I like the thought of places like Wal-Mart moving within a thirty mile radius of me because it don't take all day to go to the store. When it comes down to it you might as well go to Wal-Mart and get it done and over with. They have everything under one roof and usually that is where you will end up anyway because you can't find what you want at a cheaper price.
