As was indicated in Chapters II and III, there was an approximate 10% return of the 6,000 questionnaires mailed to Pennsylvania, California, New York and Illinois. The research staff has categorized these responses which provide comments and suggestions on how to cope and prepare for the survival of the small retailer. The categories are grouped by state returns and indicate the types of product lines or services provided by the respondents.
Chapter IV reveals the depth of fear and discouragement of the small retailers, as per their own statements, who are desperately concerned with their chances of survival in the face of mega-retail discount chain competition by the Home Depots, Kmarts, Wal-Marts, Targets and other "Big Box" competitors, as well as competition from other powerful retail chains. The narrative comments and quotes are [resented here in geographical order.
Before launching into the comments and suggestions made by the retail respondents which are to be found in Part II of Chapter IV, the author believes it appropriate in Part I of this chapter to review suggestions made by authors, Taylor and Archer, on how the small retailer can survive in the face of mega-chain competition.
1 This work was published by the American Management Association in 1994. It hoped to provide the small retailer with a strategy for survival.Part I of this chapter is a response to the book, Up Against the Wal-Marts, authored by Taylor and Archer. The author recognizes this serious work as well meaning--but finds the suggested strategies almost impossible to implement at the current stage of retail failure and stagnation. These small firms simply do not have the financial resources, staff or leadership to snap back in the ways suggested by Taylor and Archer. Were there a reason to start a new business with more than adequate management experience and venture capital, their "Ten Strategies to Survive" would be both helpful and essential. It is possible that some individual retailers might survive in the face of the "Big Boxes" by following Taylor and Archer's "Ten Commandments" or strategies. However, for the most part, the dying breed of "Main Street" merchants requires external and formidable help from local, state and federal governments as well as specialized agencies such as zoning boards, planning commissions and community development authorities prepared to provide incentives and subsidies to small retailers, currently available to the mega-retail discount chains who generally build their "Big Boxes" on former agricultural or industrial land. For example, a mega-retail discount chain store is given the right to retain sales taxes collected for a given number of years in order to help finance construction of and debt service for the "Big Box." As small retailers close, the sales taxes they formerly collected are no longer available to local government. These entrepreneurial subsidies and dozens of other incentives as well as tax abatements are generally not available to the small retail merchant.
Taylor and Archer are among those writers and journalists who attribute the failures of the traditional "Main Street" retailer to causes other than the price competition of the mega-retail discount chains. Taylor and Archer present a provocative and interesting volume which appears well-meaning in identifying ten survival strategies to enable the small retailer to compete more effectively with a giant Wal-Mart or other mega-chain retailers. The title of their book, published in 1994 is Up Against the Wal-Marts (How Your Business Can Prosper in the Shadow of the Retail Giants), as was listed in Footnote 1.
One cannot argue with the time honored principles presented such as "satisfy your customers"; "study the success of others"; "gather and analyze management information regularly"; sharpen your marketing skills"; "increase the customer's perception of value"; "position your business uniquely"; "eliminate waste"; "find something to improve every day" (the Kaizen Japanese method of incremental improvement); "embrace change with a positive attitude"; and "pull the trigger and start the battle."
These prescriptions would appear sound if the small retailer were not finding daily vacancies among his neighbors in strip malls; vacancies that result in the "Main Street" or the Mall taking on the appearance of a city ghetto, with boarded up properties and a sharply reduced traffic volume that makes the surviving retailers' look like lonely commercial outposts.
If out of every ten stores on "Main Street" or on a strip mall, three to five retailers close because of a neighboring Supercenter's announcing special promotions and discounted sales, what is a staunch "survivor" to do? The small retailer is unable to procure mass purchase discounts from manufacturers. Even in military parlance, if sixty percent of a company is devastated by superior weaponry, can a company commander rally his decimated troops and win? Do the valiant surviving retailers possess unique leadership skills and professional staff of the sort engaged by the mega-retail discount chains? Do they have the logistical support to survive the invasion of the supercenters?
The writer has visited many strip centers, "Main Streets" and malls, in a number of states and has interviewed a number of valiant survivors. In Part II of this chapter, the reader will certainly recognize their discouragement and disillusionment about the end of their "American Dream."
Taylor and Archer, while truly attempting to encourage small retailers to survive; nevertheless do recognize and observe the present devastation going on in malls, strip malls and the former "Main Streets" of Middle America. Furthermore, it is easy to see observers are shocked by the decline and elimination of most small retail stores in the ethnic and minority enclaves of our very large cities, in the East, Midwest and the West. The elimination of small retail store in the neighborhoods results in job loss and contributes to the ultimate conversion of a formerly socially stable neighborhood into a ghetto, beset by violence, crime, drugs and an underground economy.
This view is clearly expressed in the following quote from Taylor and Archer's opening statement in their book:
"'Main Street' Is Changing"
YOU WANTED WAL-MART. SOON THEY'LL BE ALL YOU GOT. GOOD LUCK THEN!"
While it is true that all of the troubles of the small retailer can not be attributed to mega-retail discount chains; nevertheless, the pricing power of these chains makes recovery on the part of the small retailer well nigh impossible.
A lack of foresight on the part of local governmental authority in failing to back downtown improvements; to make parking readily available; to control traffic congestion; and to provide fiscal stability have all contributed to the plight of the small retailer in America.
After describing the Bowman's Hardware closing (which the authors of this current study find very typical of the fates of hundreds of retailers studied in Pennsylvania, California, New York State and Illinois), Taylor and Archer cited several successful survival instances in New Jersey, Missouri and Arizona. Based upon this writer's experience, these "miracles" are the exception rather than the rule.
Taylor and Archer quoted Mr. Jack McNabb of a Trenton, Missouri Hardware Store as saying, "This is a tough business, and these are tough times," he told us. "But I'll soon have it paid off, and then we'll have some fun again."3
Taylor and Archer tell the reader that, in more prosperous times, this store supported the families of five owners. 4 Now it appears that only McNabb manages a living. Like the family farmers that make up his customer base, this independent "Main Street" merchant may be one of a vanishing breed.
"'Main Street' is Changing." 5
Taylor and Archer also tell of Casey's in Flagstaff, Arizona that apparently has had the capital to advertise, promote and add specialized employees. Casey's president, Robert Gondek, attributed his firm's survival in part to watching prices. He stated:
"We're watching our prices too. Wal-Mart has 50 or 60 items they advertise pretty hard in this area. We watch those items all the time. If Wal-Mart is at 97 cents on a bag of steer manure, we'll be at 99 cents and load it in your car for you." 6
Admittedly, small retailers must fight back to survive. But how can Casey's continue to match Wal-Mart's prices when Wal-Mart and other mega-retail discounters such as Kmart, Target, and all other "Big Box" retailers who buy through mass purchasing buy "direct" from manufacturers and suppliers, while McNabb and Casey are apparently unable to secure this type of recognition. As has been indicated in this study, access to wholesalers is disappearing for the small retailers.
Numerous retailers are buying from such wholesale clubs as Price/Costco and Sam's Clubs. Price and Costco merged in 1993 and is now the largest factor in the wholesale club industry with over $15 billion in sales. Sam's Clubs is the wholesale/warehouse sales division of Wal-Mart. In 1995, 453 Sam's Clubs had combined sales of $19 billion. Retailers are becoming members of these clubs in order to purchase inventory for resale in their stores in the short run. How can they match prices with Kmart, Wal-Mart, Home Depot and Target, "over the long run?"
Taylor and Archer provide ten survival strategies for small retailers to consider in competing with Target, Kmart, Wal-Mart and other important mega-discount chains. These precepts are:
Their work appears to be more appropriate in helping a retailer in planning a new venture, starting a new business, or selecting a new location. The book provides sound business advice for all retailers, large and small, of every type and description. However, the "generic" type of advice so generously offered cannot help most of the nation's small retailers who are under-capitalized; possibly deep in debt, unable to afford sophisticated information systems, costly advertising and promotion, and who are presently located in what appears to be "disadvantaged," "ghetto-like" locations. Here, the formerly lovely "Main Street" is loaded with vacant real estate. The historic neighborhood enclaves in large cities now exhibit abandoned stores and residential decline. Even malls constructed within the past five or ten years now suffer vacancies and reduced traffic as the "Big Boxes" of Target, Kmart or Wal-Mart open, perhaps a half mile to three miles from the former bustling commercial center.
The responses to our study show hopelessness, frustration and inability to respond to Taylor and Archer's ten strategies for survival, albeit, the advice is good. At a certain point the small retailer becomes a dying breed, unless the nation and Congress realizes what the impact of these failures will be on communities, joblessness and social disorganization.
Generally, wages in the mega-retail discount chains do not match the earnings of employees who worked in family-owned small businesses. Not only has the economic impact of the mega-chains been negative; but also the sociological impact, as communities lose their small stores, the mega-stores will become socially unstable influences, resulting in increases in violence, crime and joblessness.
The surveys offered each respondent an opportunity to make further comments, explain their quantitative answers or to express ideas or opinions on the current state of their businesses and their communities. What follows are those responses. They have been organized by state and city or region within each state. All responses are presented in order for the reader to get a feel for the positive as well as the negative comments of the small business owners.
A. California
B. Pennsylvania
C. Illinois
D. New York (Finger Lakes Region)
S1 - Luggage/Bags:
"Our store primarily deals with bags and luggage. One block away there is another
luggage store. None of them are (including ours) large stores. Yet, there is enough
competition to really drive the retail price down, even between two small stores. We can
imagine what it will be like if a national chain store is placed near our store. This
reminds us of a game of MonopolyŽ! But perhaps this is an inevitable trend every one
wants to make the most 'bang' for the most buck. So, it is only natural there will be the
predominance of nation wide chain-stores in which they may bypass wholesalers and purchase
goods directly from manufacturers. We are aware of the diminishing wholesalers (from
L.A.). We sense economy of scale at work everywhere, but in a more overt form."
S27 - Men's and Women's Resort Wear:
"The wording of your questionnaire makes an accurate answer difficult. We operate
specialty resort wear stores in resorts. A large store opening _ mile away would have no
impact but an operation across the street would. Also a large discount store would not
offer similar products. It is highly unlikely a discount operation would want to pay
$60-$100 per square foot rent and could discount the upscale merchandise we offer."
S26 - Books and Magazines:
"Information regarding publishers and other suppliers offering preferential terms for
'mega stores' would be helpful."
"Research regarding possible trade violations by mega stores helpful. Also their influence on making 'best sellers' simply by their purchases - what is their influence on a book's success?"
"Cultural influence of chain/mega stores purchase pattern (de facto censorship) - less profitability of some books - also their negative impact on small publishers - (high purchase and high return)."
S25 - Security Equipment:
"In our experience, the large mega-retailers carry the low end of product lines which
appeal to 'do-it-yourselfers' and handymen. Therefore we have shifted our emphasis to
commercial customers and the Navy. The large retailers buy directly from the manufacturer
and eliminate the distributors. We can not compete under those circumstances. If we do not
have distributors to supply us with merchandise, and we can not buy from the
manufacturers, that doesn't hold much of a future for small businesses."
S22 - Men's Casual Wear:
"I am located in Seaport Village, which is tourist/convention orientated. This may
not suit your survey objective, as many of our customers wouldn't have the option of
visiting a discounter because of time restraints or wouldn't want to, as they would feel
they could do that in their hometown. I currently make a strong effort not to carry same
labels available in the discount stores you named. Many manufacturers use a different
label for discounters - same goods, or they manufacture a lighter weight garment (less
quality) same look."
S20 - "Other":
"It seems a little late in the game to be trying to come to terms with the
destructive aspects of mega stores. Perhaps some time should be spent anticipating the
impact of electronic shopping and other emerging phenomena of our rapidly restructuring
economy."
"My experience with superstores - Home Depot, etc. - is that they have a broad range of products but lack depth. I find myself patronizing the niche retailers - the specialty bookstore, or 'Real Goods' catalog for products I want. My concern with superstores is that they don't just save the customer but they also define what's marketed without concern for origin of product (e.g. Chinese prison labor) or ecological consequences."
S19 - Jewelry:
"We are in a unique situation, as all our merchandise is hand crafted locally.
However, the average person has only so much time to shop and will usually prefer to go to
where they can get all their shopping done at once. We can not afford to go into a mall
and of course, could not produce/compete in price with the larger volumes necessary for
discount sales. We are seriously considering going out of business after 22 years in San
Diego."
S18 - Home Improve/Building Supplies: "The old adage in retail that 20% of the items make up 80% of the sales is pretty much true. The big box retailers tend to stock and sell mostly these items. In traditional retailing, these items (the 20% items) subsidize the other slower selling items. Additionally most of these items (the 20% fastest selling items) are purchased on a direct basis from the manufacturers excluding the wholesalers from the picture."
"As the 'Big Box' retailers come to dominate the market, traditional retailers are driven out of business because they can no longer survive just selling the slower selling items. Wholesalers are driven out of business for the same reason (and because of direct selling). Manufacturers cannot find retailers and wholesalers to stock and distribute the slower selling items. The end result is that consumers find that there are fewer and fewer of these slow selling products available. Yet, these slow selling items once represented 80% of total number of manufactured items."
"That local governments are doling out tax incentives to the mega-discount chain retailers in exchange for opening stores in their communities shows an incredible lack of understanding of the big picture. These huge businesses operate differently than small and medium size business and do not need help from our government. Instead of providing incentives for big business our governments should relieve small business of the huge burdens that they have imposed. There are an incredible amount of rules, regulations, and paperwork requirements that impact small business and large business differently. Because of economies of scale, each new regulation imposed on business has a minimal impact on large business but a huge and detrimental impact on small business. Governments at all levels need to understand this."
S16 - Tobacco Shop:
"It should be noted that my store is in an outdoor mall. I have a primary location
with innumerable tourists. The S. D. Convention Center is down the boardwalk and I am
surrounded by 7,500 hotel rooms. I may not be an ideal candidate for your existing study.
I felt you should have this insight for your study. I am primarily a tobacconist selling
cigarettes, pipes, tobacco and cigars."
S15 - Apparel:
"I have personally seen Wal-Mart and other discount stores completely shut down a
small town in southern Indiana. Businesses which had been in operation for years were
closed and the only opportunities for employment were minimum wage jobs. In addition,
clothing and other items are of a low quality, not really quality for price."
S14 - Beverages, Snacks:
"We are a small coffee vending (retail) operation which enjoys a good location in the
business district and long standing track record. Our 'edge' on the market is quality and
service and very low overhead. The disadvantage is that we rent our locations; and, if a
large company comes into the area, they could well afford to offer our landlord a deal
they couldn't refuse or one that we couldn't match. If we did pay the 'increased market
rent' one of our largest advantages would be lost (low overhead)."
O7 - Electric Equipment/Kitchen Equipment:
"The large retail stores have nothing but a negative effect on the small business,
especially in California. There is only so much business to go around and the increase in
the number of stores only means that each one's slice of the economic pie is only that
much smaller."
O2 - Picture Frames:
"Thank you for the opportunity to be included in this survey. As a young small
business man I feel that some of the large chain stores do a greater deal of bad than
good. If the United States wants to become an unfriendly discount warehouse then so be it.
But being a 'service' business I don't believe that is what's happening. I honestly feel
that someone forgot the most important thing about being a small business - 'the
customer.' Without service to the customer it is just a matter of time before all the big
stores are gone and the smaller 'Mom-and-Pop' shops come back (I hope)."
O21 - Specialty Shop:
"We are a specialty business with very little competition from large chain business.
We provide products and customer service on use of products not found in large chain
stores."
O105 - Sports Products:
"Large discounters will move in with lower prices. Independents will be forced out
and then when competition's gone, prices will go up again until the cycle starts again.
Service is the only way the small guy can compete. We have just liquidated due to discount
competition!"
O101 - Bikes/Equipment:
"I will close my business by July 1, 1994. No tax concessions were offered to bring
my business into town or to keep it in town. Many products which were sold in my store and
made available from the manufacturer solely for 'independent' stores now have appeared in
the discount stores via gray market trading. My customers were always quick to tell me
about the great deals they got."
"The American public will always pay in the long run for the services they get and expect and perhaps service and quality are after-thoughts soon forgotten. Many cities have over built re: shopping malls, especially those anchored by discounts firms, only to have the mall become a picture of blight when it cannot be filled with small tenants or the discount firm packs up and leaves."
O99 - Nutrition Store:
"Mega-chain stores buy or discount wholesale, because of high volume then sell or
discounts to attract consumers. Smaller margin of profit is offset by higher sales
volumes. Tax breaks and other incentives from all levels of government (local, state,
federal) favor big business unfairly to the detriment of the small business who gets no
break even though small businesses are the national economy's backbone. If this trend
continues, small businesses will soon become a thing of the past. Small business should
now get the breaks and larger ones should pay their full dues. When small businesses are
gone, the larger chains will be able to raise prices without competition from the small
entrepreneurs and retailers. Large chains are like sharks scavenging the fiber of the
retail world, swallowing schools of smaller retailers, leaving dead zones within 'miles.'
They will finally fail themselves and fold, because of over-building and the retail chain
wars."
O94 - Food Products:
"Some California laws need modifying to be more 'small business friendly'."
O93 - Eye Glasses/Contact Lenses:
"Please tell these cities that want these stores the truth about the lower wage jobs,
etc. They don't understand that they are putting small business out of business.
Unfortunately, here in Oceanside, they don't care! I have spoken to the Chamber of
Commerce and it has only got one side of story on these mega stores. There should be a
limit as to how close these stores can be to each other. In the San Diego area, we now
have 4 Price Clubs all within 6 miles of each other!! And now Wal-Mart wants to have 2
locations in Oceanside with the possibility of a 3rd!! I don't care what anyone says, but
it does hurt small business including myself. Thanks for sending me the survey. I'll be
happy to do it again."
O91 - Automotive:
"Big chains sell way too low the first year to gain customer base. My main concern is
automotive and your survey didn't pertain to this area. Large chains will decrease
employment because small businesses will close."
O85 - Food Products/Popcorn:
"One example: We sell a 3 _ gallon tin of popcorn for $18.95 with
butter-cheese-caramel. Wal-Mart has a 3 _ gallon tin they sell for $6.95. Their tin
doesn't have handles, but it is hard to justify three times the price. We pay $6.36 for an
empty tin."
O83 - Food Products:
"Elimination of small and medium size business would be the result of discount stores
moving to an area which eventually will cause the removal of working class and middle
income categories. In short term, middle class and probably some low income consumers
benefit from these changes but in the long run both will be losers and pay for short term
benefits."
O81 - Furniture/Appliances:
"We are so busy trying to keep the doors open, so I don't have time to make comments.
Business is BAD - BAD!"
O78 - Computer Equipment:
"As a small businessman I recognize it is next to impossible to compete against
mega/retailers/discounters on price. But we will continue to strive to beat them on
service."
"A large part of our business is selling, installing and maintaining networks. I believe (hope!) that this focus will keep us profitable and allow us to compete in the future. We also repair computers quickly, again something that the mega/retailers/discounters have not adequately provided."
O76 - Optometry:
"These companies, while they profess to promote jobs and add to the tax base and help
the economy: nevertheless, from input I have had from other practitioners, they actually
do just the opposite: They run small business 'out of town'; provide inadequate jobs and
are only concerned about the bottom line! Prices that they charge for similar products
that I have, are at times below my cost or at a level that I cannot compete with. There
are only so many tax dollars. By adding another store, how can the tax revenue be
increased? This is the big lie of the discount chain stores."
O73 - Shoe Store:
"I have two views about national discounters. 1) Our town already has 1 Target, 2
Kmarts, 2 Long's and now we are getting a Wal-Mart. All of these retailers sell 'some'
similar products to mine and they get them much cheaper than I do - thus this is bad for
my business. 2) Our town is in terrible need of businesses who can bring employment
opportunities and tax dollars to us. I personally would rather see more upscale larger
retailers come."
O68 - Food Products:
"The big question is what are local merchants and centers doing to compete with the
national discount centers. For example, uplifting stores and malls that are looking so
worn and are not as attractive to shop in as are new stores."
O63 - Audio Stereo:
"It is my opinion that the U.S. Government PX's are engaged in unfair business
practices which present the most adverse impact on my business. They sell the same product
at an average mark up of 20%. They do not charge sales taxes and in addition they now
offer financing. I feel this has been a major impact causing about a 40% decline in
business for the last 3 years. I feel the Exchange and PX should be limited to selling
necessary items such as food only, not luxury items such as car stereos and electronics.
We as business people and taxpayers are financing the government to operate at a loss and
extending the time of recession."
O61 - Furniture:
"I am a sales representative in the home furnishings field. I also offer warranty
services as an addition to the products I sell. I currently sell to Price\Costco, so I
can't say it would be bad for me personally for their expansion. However, the other large
discount chain retailers do take away from my customer base on a retail level."
O59 - Computer Equipment/Electronic Equipment:
"We are a family business in existence for over 20 years. Two locations (1 -
Escondido; 1 - Oceanside). When we opened typewriter shops, we sold typewriters. Now Price
Club, Sam's, Wal-Mart, Kmart, Silo, Circuit City, Sears, Montgomery Wards, all sell
typewriters, word processors, etc. They sell at prices less than we can purchase from the
manufacturer as a dealer. As a dealer we have quotas to meet in order to stay a dealer and
be able to buy machines, supplies and parts. We are now a service oriented business."
O58 - Optometry:
"I am personally against retailers such as Wal-Mart, etc. They do not offer good jobs
to the local public and do take away from jobs provided by the smaller business. Thus,
their promise to add the 'so called' revenues to the city coffers is untrue, since these
big retailers put many others out of business. Then the profits leave the local areas and
go to the big corporate guys."
O56 - Paper Products:
"In 'general' there is already too much retail space now available and the giants are
killing off the small retailers. While some of us hope to grow big enough to compete, most
of us will not survive. Community planners and local and state governments put too much
emphasis on tax revenue and not enough on quality of life, and plan too much commercial
and not enough desirable housing, which leads to too many instant slums and not enough
family desirable living areas."
O54 - Scuba:
"Currently I compete with the Federal Government 'MCB Camp Pendleton.' They have
already created a mega store environment. You excluded government competition from your
study. PX systems are as big as Target. The PX in my area went into competition with me in
1983. My business dropped 30%."
O53 - Food Products:
"The aspect of mega-retailers which greatly affects me is my ability to buy 'a few
items' from a local hardware, lumber or business supply store - they're gone. Meanwhile
the mega-retailer thrives and I have to buy 10 of something when I only want one, because
they only package usually in bulk sizes."
"No personal contact, no help with products, limited variety, etc. are all problems with mega-retailers. Everyone can save if you would consider the savings in terms of paper/tree waste, postage (2 ways) and general ecological conservative principles."
O52 - Food Products:
"I have been in this location for four years. One year ago another store just like
mine, but four times bigger, opened up about _ mile from me and my sales since then have
decreased over 50%. They have not gone back up yet."
O51 - Electronic Equipment:
"Some of the products sold by the chains may be factory seconds, refurbished and not
clearly stated. Small business must have the same leverage as bigger stores. If a product
cost me $200 - the bigger stores should not be able to buy cheaper except in car load
lots. I am selling a personal service and products that the big stores have a hard time
competing against. Experience and fair competition may be a solution to the problem."
O49 - Food Products:
"My business is in a center that has a Target store in it. There is a proposal to put
a Wal-Mart two blocks away. The tax base will not increase because the people that were
shopping at Target will buy at Wal-Mart. Target will be forced to compete more
aggressively, prices will come down and less taxes will be collected. The customer base
will stay the same."
"Within a five mile radius we have two Price Clubs; one was very busy all the time until they opened the second one. Now they are not so busy at both locations. It proves my point that they are splitting their customers, not increasing the customer base."
O48 - Beach Snack Shop:
"I am very concerned with large chains moving into and eliminating small business.
Over a long period of time, there is dramatic damage in the community. We lose the
community family."
O47 - Food Products:
"In Oceanside, proposals are being considered for three Wal-Marts, - one has been
okayed! In these economic times the carrot of sales tax revenue is being taken by local
government. All the while, the three established Price Clubs (San Marcos, Vista, Carlsbad)
have all reported reduced sales (cannibalized each other) and one will have to be closed.
We have cities competing against each other for a mega-store and the result is
short-sighted irresponsible planning with the small business losing out big time."
O38 Building Supplies:
"The Home Depot has been here for 10 years. We can offer more for less on a service
and personal level. They, on the other hand, can purchase certain goods at a substantial
saving usually under my price. They buy direct; we cannot. How can we compete?! The
government thinks that these companies are small business. They are wrong - we are!"
O37 - Lawn and Garden:
"When Home Depot opened its doors several years ago, my sales dropped 15-20%. With a
slow economy, people assume Home Depot and Home Base are cheaper, therefore my sales have
continued to drop."
"On a positive note, many customers are returning to the service that we provide. The 'circus' atmosphere is costing them sales as well. Thank you for asking our opinions."
O34 - General Store:
"Predatory pricing by large retailing chains should be controlled."
O30 - Florist:
"No one said it would be easy to compete in any venue."
O27 - Photo Processing:
"We already have a tough time surviving in Oceanside. The city's business has
decreased. Businesses in my center have moved or gone out of business, accounting for a
40% vacancy in the center."
"Selling my firm is probably out of the question because of Oceanside's reputation for poor business as of late. Wish me luck!"
O26 - Doors/Windows/Kitchen Cabinets:
"If the manufacturer sells direct to the large chains, then why not sell direct to
the small businesses?"
O39 - Home Improvement/Lawn & Garden:
"I love the big guys - they sell the cheap products that break down, and I repair, or
replace with quality products."
O24 - Furniture:
"Give small business same breaks that are offered to large chains, particularly tax
breaks."
O23 - Auto Equipment and Services:
"There is no question that big chains, who have such buying power, are putting small
and medium size business out of business. I did not know that any one out there cared
about small businesses going out. These big stores carry everything. The Price Club even
has a travel agency inside. I think this is absolutely disgusting."
O20 - Women's Work Apparel:
"Uniform sales are generally a more service oriented and group sales type of
retailing. It requires a more knowledgeable type of selling and marketing. I would only
expect a moderate decrease in sales. Most uniform locations require male/female garments
in all sizes, ranges and colors. National discount retailers do not have the space nor
qualified personnel to handle our type of products."
O18 - Meat:
"There is nothing positive I can say in regard to having a large discount store
locating in our area."
O17 - Hearing Aid Sales/Service:
"This survey is an excellent idea. I had not considered the impact on my business of
the large retail outlets, so I appreciate the opportunity to respond."
O65/66 - Electronics/Video:
"I am totally opposed to the 'corporate-tization' of my community. (store A). We are
being run out of business by blockbuster corporate companies who have more buying power,
governmental tax breaks and the ability to direct dollars and lobby groups to keep status
quo. The 'Mom-and-Pop' video business is in peril! (store B). We compete with everyone
from grocery chains to drug stores to McDonald's which are using rental and sell through
videos as 'loss leader' items. No entity is willing to stop this from happening. We cannot
compete with below cost or free!"
C20 - Variety Store:
"As a franchisee I rely on my franchisor to constantly be on top of my business needs
and changes. We are very limited to what we can do. I feel because of their constant
changes and the downsizing of their staff, that these actions have affected my business
[ex: advertising, upgrading equipment, new ideas to keep up with the changes of our
competitors]. I am relying on myself more and more to stay in business. I have gone from
being able to have 2 days off and working 8 hour days to working 6-10 hour days and I'm
not alone. Many other franchisees are doing the same thing."
C19 - Jewelry:
"Cities are strapped for income and have to raise revenues with increased parking
fees which affect businesses that cannot afford large areas for free parking. Also,
increased business license fees and large mega stores with their 'in-house' credit plans
will eventually doom all small businesses. City Councils have not got business 'smarts'
and legislate small businesses to death. I have had my own business for 35 years and it
just gets worse every day. The fun is gone and the money is gone - only a fool would open
a small business today."
C15 - Hardware:
"The big chains usually sell cheap products which puts the home owner in need of our
services. However, quality products prices can't compete with big chains so we end up with
a rip off reputation for charging a decent price for quality work and quality
material."
C13 - Home Improvement:
"The best way to compete is service. Our big job is getting customer in the first
time."
C12 - Home Improvement:
"Most small businesses have been hard hit by the economy in last 3 years. Our
business is down 35% to 50%. We have used up our savings and other resources. We have cut
staff and all the fat from our budget. As owners we spend more time in our stores. There
is little left to give, if we lose any more of our business - WE ARE OUT OF BUSINESS!
'Mom-and-Pop' are on death row! Down to the last appeal! Send in the priest not the tax
man!"
C10 - Ice Cream:
"Large businesses can afford lower prices by allocating or prorating profit margins
among several different products. Economy of scale."
C8 - Office Products:
"I do not like the City helping major stores open with tax breaks/land deals, etc.,
when the effect is to put many small business people out of business. Unless they are
bringing new buyers into the city, they are only moving sales tax dollars from one place
in their city to another."
C4 - Paper Products:
"A large competitor that handled the same or similar services would put me out of
business."
C2 - Jewelry:
"It is necessary to stop irresponsible opening of new businesses in the areas already
filled up with similar businesses."
C58 - Jewelry:
"1) Restrict to some areas all national discount retailer stores. 2) If local
government waives taxes five or more years, than obligate the mega-retailer to stay five
extra years after the five years waiver. 3) Tax extra for the number of stores they have.
4) Obligate manufacturers to give same prices to small business. 5) Waive some taxes to
small business. 6) Lower Workman's Compensation insurance to small business. 7) Special
loans to small business at lower rates."
C55 - Reupholsterer of Furniture:
"Small business can compete with large business providing government entities do not
tax and or regulate us to death and offer incentives to large business that are not
available to small. Small business worst problems include above and excessive insurance
premiums, especially Workman's Compensation, health care cost of employees, unions. Small
business is only surviving now because it gives better service and quality and is
accepting less pay or rewards for its efforts."
C51 - Kitchen Products:
"Fedco, military base are 'not for profit.' It's very hard to compete with this type
operation. I think if they are not for profit, they should not be allowed to sell the same
products I do. People will often come in and see products I sell (and stock) then once
they have all the information on the product they will go to a warehouse club or military
base and purchase it cheaper."
C48 - Food Products:
"I have found that the large mega store customers have a negative impact because
their business is one stop shopping. After an hour in Wal-Mart, etc. the last thing you
want is to stop some place else for ice cream, etc."
C47 - Sewing Fabrics:
"Chula Vista, CA is unique. The Mexican border is five minutes south, San Diego
proper is ten minutes north. There are now 3 and very soon 4 Kmart stores within 8 minutes
of my store. There are 3 Home Depot centers, 1 Home Base, 2 Targets, 3 Major Malls, 1
Office Depot as well as a multitude of other strip shopping centers . . . all within 8-10
minutes. Drive for 20 minutes and easily triple these figures."
"Originally, these mega stores offered depth and low prices . . . very competitive prices. Price/Costco has zero profit prices . . . (net) margin. They are selling at cost only . . . deriving their 'profit' from quick selling in volume and 60-90+ day terms from their supplier. Price Club sells the same products as I do at a cost below my wholesale cost . . . and I still must pay freight! Competitively, it's not very fair. Will they still sell below my cost after I am gone?"
"For the consumer (me too) it is very good. I get selection, depth, low prices...if I shop around, and quick delivery, no hassle refunds. I travel a lot and observe other small communities (i.e. Eureka, CA; Grants Pass OR...etc) where the small 'Main Street' has become one-way only and boarded up or vacancy signs proliferated about the 'Main' part of town. Property values declined and 'Main' street moved to the outskirts near the interstate. This is progress?"
"I would hate to work all my life for a business that I am committed to, only to find it worthless after 50 years and retire to a Social Security program which may not exist when I am eligible."
"Only answer: Change with the times. Technology is moving foreword and so must we. Go back to school . . . get smart."
"Note: In the interim many new-generation type establishments such as coffee houses, teen related businesses generally run by new business families i.e.; the young and the restless, are popping up in the downtown areas and giving new life to those blighted areas. Small scale, but it's working. The blighted downtown/abandoned dockside in Boston, MA has been and is being rejuvenated with AFL-CIO funding into senior housing...and it looks pretty nice."
C45 - Communication Equipment:
"We are not worried about honest competition, because we provide excellent service to
the customer. But the real problem begins when they start selling their equipment at cost
or making only a very small profit (i.e. Price Club). We need to mark up our merchandise
at least 20% over cost so we can pay a decent salary to our employees."
C43 - Optometry:
"Currently in practice eight years. It has never been necessary for me to see
patients more than 2 _ - 3 days per week. Income is supplemented by working as an
independent for other offices. Kmart and Wal-Mart (and Price Club) have moved in recently
and that has sent the small patient load that I did have plummeting. Other private
practitioners in the area have been impacted similarly. The profit margin was barely
enough to justify the existence of my practice. With the current changes in competition;
the practice will either have to be moved or sold."
C41 - Books and Games:
"Video Games - The large chain mega-retailers buy direct at cheaper prices and often
use the video games (i.e. Nintendo/Sega) as 'loss leaders' and therefore make it extremely
difficult or impossible to compete on new video games."
"Comic books - Many comic book publishers are embracing the mega-retailers, but at this time I think it will be a plus for direct market comic stores. But we will see what the future brings."
"Trading cards - Many trading card manufacturers offer special products to the mega-retailers which usually are more desirable than the products offered to small hobby shops such as mine. Usually these products are sold by their employees at drastically inflated prices to small stores such as mine and rarely offered to the public."
C37 - Food Products:
"At the present time it seems to me we have more stores than customers. With more
stores all we do is keep dividing business."
C36 - Men and Women's Clothing:
"We are owned by a corporation (Melville) so I don't know if I should even be
releasing these figures. The reason I am is that I am an entrepreneur and currently
opening a small business of my own. The hardest thing about this whole business venture is
lack of support. Communities need to get together and work together in order to keep the
money flowing. I am interested in any ideas on how to pull people together. Please contact
me!"
C34 - Food Products:
"How can a small business compete when my purchasing of some products are more
expensive than their retail prices?"
C30 - Variety Store:
"I feel that the small business managers must somehow make cities that give your
Wal-Marts & Kmarts non-tax status for years should be held accountable, as the cities
lose revenue whenever the small businesses are forced to close due to the excessive
competition. Also one should check-out the methods that Kmarts and Wal-Marts use to keep
their cost down as far as employee wages & benefits. Do they give their employees the
total package that my company offers?"
C28 - Pipe and Cigarette Shop:
"Predatory pricing also affects manufacturers in a negative way. Suppose you
manufactured a great quality washing machine and had agreements with lots of independent
stores to sell and service your product at reasonable prices. A big discounter moves in
and demands that you sell him your product. He discounts the hell out of it, probably
offers no service. All of your independent outlets drop your product. Now the discounter
wants to buy more but at large discounts. The manufacturer has no choice but to discount
to the discounter. He cheapens his product in materials and by possibly moving production
to another country. I firmly believe that manufacturers have the right to decide who they
will and will not sell to. After all they may have generations invested in their product's
good name. We see some of the collective items that we sell and have a lot of our money
invested in, being discounted by Costco/Price Club."
C25 - Men's Clothing:
"If the present trend continues of the mega-stores, numerous small merchants will not
be able to survive with such competition; as is already evidenced in many areas.
Bankruptcies are and will continue to be a common occurrence amongst small business."
"The 'impact' is and will continue to be devastating. It is the strangulation of the small business segment in general."
"After 32 years in my business, never have I been more discouraged by trends in the large corporate invasion and the ultimate break up of small business."
C22 - Health and Beauty:
"It is a difficult environment for small business. Unfair pricing from manufacturers
is a major concern. Contract lock outs is another. Changes in those may help lead to a
more level playing field."
P10 - Men's and Women's Casual Wear:
"It is getting more difficult to compete not only with the large retailers, but with
garage operations, i.e. screen-printers, etc. If things don't improve soon, I will be
forced to make some decisions regarding selling, liquidating or some other option."
P7 - Computer Equipment:
"The cheaper brands of computer equipment sold in mega-retail stores floods the
workplace with inferior products. Purchasers, who do not understand the technical
differences between brands and models, base their purchase decision on price alone. As a
result, I have been forced to service increasing numbers of 'junk' computers - that often
takes more time, and is less 'fulfilling' (professionally speaking)."
P4 - Specialty Sales:
"My business is a specialty sales business. This area is difficult for a challenge
from mega-marketers. However, my daughter's job as a pharmacy tech for a drug store chain
is threatened by Wal-Mart's arrival here, as is my friend, the optometrist, and many
others."
P2 - Full Service Restaurant:
"I have felt the impact of several 'cookie cutter' chain restaurants that have
sprouted in recent months. In the last year 13 new restaurants have opened in a 5 mile
square area. They are confined enough to offer a variety of choices to customers and are
located near Price Club, Home Depot and a few other discount houses nearby. They are not
owner/operated and I believe without personality or the 'human' touch. I have to work too
hard to please many of my customers only to have them tell me how wonderful this new place
is or that. Chain restaurants seem to have very deep pockets to decorate and send out
colorful, slick ads in our local paper. 'I can't afford it, so I have to work harder. I
will never offer specials - my quality will not be compromised just to compete."
P27 - Auto Parts/Labor:
"The largest problem I see with a large retailer moving close would be its ability to
buy direct from factory. If I were also able to buy direct, I could compete."
P26 - Home Improvement, Building Supplies/Labor:
"We are in the construction industry. We provide a full line of glass products and
commercial case work. Since the Home Depot and Home Base opened up we have all but lost
our glass income. They provide and install all glass related products either direct or
through subcontract with area shops. Our suppliers are selling to them at big discounts
because of their volume, we can't compete in this market. We've been reduced to a
commercial cabinet installation shop - having to move our business."
P24 - Food Products:
"Wal-Mart's arrival has hurt and helped in our area. It forced Long's Drug Store out
of business so that site - the 2nd major business of Poway Town and Country Shopping
Center, has been vacant over two years. Several adjacent businesses were forced to
close."
"Wal-Mart's employees frequent the restaurant improving my lunch business. I lost several employees to Wal-Mart. Several of the merchants in our center have been hurt by Wal-Mart's lower prices."
P20 - Flowers/Gifts:
"In Poway and surrounding areas, there are too many businesses competing for the same
thing.
P18 - "Other":
"Cities should strongly weight the needs of the small business owners, who are solid
establishments over the prospects of luring a national chain mega store."
P33 - Toys/Games:
"We no longer carry a large variety of nationally advertised merchandise. We no
longer carry bicycles, only on special order. Wal-Mart opened 2 years ago."
P48 - Liquor:
"Comments below will be hard to change in my geographic area (10 mile radius). Rancho
Bernardo is the best place to own a small business (retail). Why? Because it is a very
small business area compared to population."
"Poway in comparison is the worst place to own a business because the business area is much too large compared to the population. The City of Poway derives its income from retail dealers. The more small businesses (retail) the more income for the city of Poway."
P46 - Retail Auto Sales:
"We are a franchised new car dealership. In general, a mega-chain outlet will not
harm our business. However, they do provide a threat to our low end automotive service
business. We can compete given our name recognition with the factory. An independent
garage would have a more difficult time surviving."
P40: Art:
"Although I am in Poway, my business does not depend on this community for business.
I have an art business that deals with a wide range of clients and quality of art work.
However, I am impacted by these mega stores because they attract the client with a limited
budget and there is no way I can compete with the buying power they have in purchasing low
cost art and framing which they then transfer to their pricing. Often a poster framed is
sold for less than it costs me wholesale."
P37 - Pet Food/Supplies:
"I am a small pet store. There is a Petco pet supply store that has been almost
directly across the street from us for a number of years. Recently (May '93) a Pet Supply
Warehouse opened down the street, several blocks away. As they came in with the aspect of
lower prices, Petco dropped theirs (particularly the pet food, which is already a low
profit margin). To maintain my customers I had to lower my prices as well. I experienced a
30% drop in sales from a very good year in 1991. The recession hit us in 1992, and the Pet
Supply Warehouse opened in 1993; we are hoping for some recovery."
"Further, a Wal-Mart and Home Depot opened in or near our community, also Price Club. Theoretically they should bring more business to our community, but Wal-Mart also sells fish and the supplies I carry. Customer service, however remains our real asset as well as the need to keep our prices competitive, if at all possible."
P36 - Drug Store:
"Give breaks to the individual businessman (taxes, 'signage,' etc)."
P32 - Optometry:
"Cities give away so much to the big retailers to get the sales tax revenue. All
other commercial developers have to pay full fees for sewers, drainage, roads, etc. So
since the mega-chains do not have as much costs going into a project so that their 'rent'
can be significantly lower aiding them in undercutting existing businesses that got no
breaks."
P35 - Food Products:
"Our business is mainly for India, Pakistan, Afghanistan and other mid-east
countries. So, there is no effect from big chain stores. However, we can't compete with
them in fresh produce and soft drinks."
P52 - Computer Equipment:
"It is impossible for the small business to compete with the national discount
retailer. For every one that opens, 10-20 small businesses go under."
P50 - Women's Clothing:
"I feel communities should be very careful not to give a deal to the big retailers
that hurt the community financially."
M30 - Furniture:
"I am a distributor for a national specialized product with a high dollar price tag.
It is a very small volume customer base. If my manufacturer were to sell to a major chain
there would be no more distributors for them any where it took place. It would be
impossible to compete even if they purchased at the same price; however, it is usually
lower. If it is only for some of the product line, I think today's consumer will settle on
a lower price and compromise for it."
M2 - Computer Equipment/Stationery:
"Small business is being forced out - too many rules and costs and competition. Soon,
many people will be on unemployment."
M7 - Fitness Equipment:
"In general, mass merchants, at least in the fitness equipment industry, carry lines
of equipment that don't measure up to the quality equipment specialty stores sell."
M8 - Carpet:
"The impact on small companies by the 'Home Depots' of the world with unlimited
capital, etc. is causing an erosion of the middle America. In the end the consumer will
pay more."
M16 - Carpeting/Flooring:
"In the flooring business in which I am engaged in retailing carpets, vinyl, wood and
ceramic tile, several major carpet mills, i.e., most prominently Shaw Industries are
engaged in what I consider anti-small retail store programs. They offer programs, such as
Shawmark which require stores to buy in at from $20,000 - $40,000 annually which I can't
afford!"
"Home Depot is our largest competitor locally in flooring. However, customer perception that Home Depot has better prices (not true) is being discovered. Further, HOME DEPOT does not provide the personal helpfulness, as well as professional installation, that I do."
M19 - General:
"We are a family owned corporation. I have been in retail several years and
experienced a decline in business when large chain stores carried the same product line
(western wear) at lower prices. It seems customers are willing to give up service and
product knowledge for a lower price."
M25 - Athletic Equipment:
"Unfortunately, at this time the superstores appear to be the future in retailing. In
order for small businesses to survive, they must be extremely specialized in their field
of profession and offer services that can't be offered by the discount retail giants.
Small business can no longer rely on the basic retail sales, but must pursue special
services and orders that will enable them to be successful. The impact of the discount
superstore will be devastating to most small business that compete directly with the
superstores who can not differentiate their business from others."
M26 - Flooring/Counters:
"Their size (chains) lets them buy for less. They pay their help less money,
consequently workmanship is poor. Too late for customer, they have already signed
contract. These large companies know exactly how to stop people from backing out. Even
when the product quality is bad."
M32 - Carpeting/Flooring:
"These types of clubs are hazardous to my business because of the margins they work
on. We combat them by smart selling and service they can't match."
M31 - Home Improvement/Domestic Products:
"We are a very service oriented business specializing in designing and coordinating
living spaces. Our main mega chain competition would be Home Depot. We cannot buy as well
as well although we also buy from manufacturers - therefore we must impress our clients
with our personal care and talents as designers."
4N - Pharmacist:
"Part of the biggest problem in our Industry today is multi-tier pricing by Drug
Manufacturers. They sell to different classes of trade at different levels. If they have
one standard price for everyone with volume discounts available to everyone it would place
competition on a level playing field. Discriminatory pricing must be eliminated. Once the
price factors are gone, then the consumer will look for service and this is where we as
small businesses can prevail."
11N - Furniture Importer:
"Personally, I resent mega-chains who receive significant tax-breaks. They usually
provide no relief to the community's economic dilemma. CARREFOUR was a primary example.
Soon after their 5-year tax break, they took their profits home. Although I shopped there,
I was not impressed with their company and usually went elsewhere for more knowledgeable
salespeople. If mega-companies want a parcel of land, they should not be catered to;
rather, provide a good community economic plan. I am confident that small towns don't want
them - therefore, no tax breaks!
12N - Hardware:
"Opening the big chain store, it should assess the customer, but not the small
retailer like myself. Currently, my business sales have not increased for 5 yrs. It means
that I already lost or am losing some customers to the chain store. On top of that, if
more chain-stores come to town and open up new businesses, I no longer will be able to
compete. Because I know I'm the losing one. Don't you think bankruptcy or leaving the town
will be better off for me?"
19N - Market:
". . . . Because they too sell similar products as I do, the competition is high and
the sales low. But undeniably, the major grocery chains that have recently been built
right outside of my immediate neighborhood and hurt my business greatly."
20N - Jewelers:
"Closed our doors 12/31/93 after 23 years in business!"
21N - Office Equipment:
"My business is primarily a service business, but I have still felt the impact of
large business. KINKO's recently opened a 24 hr. 'mega-center' in my area and the only way
I can remain competitive is to spend a great deal of money in advertising. A small
business obviously doesn't have the advertising budget of a major franchise and the level
of frustration rises with each passing day."
5FG - Lumber/Home Improvement:
"The legal system and the federal government have failed the small business people
immensely. Family- owned business people, middle class people, who have worked in these
businesses, they are the core of people left to carry the burden of supporting the City
and the government. What will happen if we are gone? Total collapse is possible. The
result of these stores infiltrating a city like Philadelphia will cause the small family
business to become extinct."
1S - Video Store:
"We have already seen the effect that Blockbuster and CVS, for example, have had on
our business. Our video store nearest a Blockbuster (517 S. 4th St.) has the slowest
growth rate of all five of our stores - 4% compared to 20%. On the films that both we and
larger chains sell, like children's videos, our sales are very low. They often sell these
videos at our cost. We have just started a promotion of three free rentals with selected
'Kid Vid' purchases in an attempt to stay competitive. Our major advantage is customer
service. We also sell and rent unusual titles, creating a different niche. On the other
hand, as a consumer, I think these stores will save me money. I've already seen this with
Caldor. My other, non-business thought is a concern about traffic. I have seen other
neighborhoods where the increased flow has put a serious strain on existing roadways,
making travel for the locals a nightmare."
3S - Hair Salon:
"The small business owner has kept service a priority and in a time of poor service
that has a unique value."
10S - Wallpaper:
"I feel that manufacturers and distributors are helping the chain stores put the
smaller businesses in bankruptcy by offering the chain stores better pricing and
discounting."
12S - Jewelers:
"Currently have Wal-Mart for anchor store in our S. Jersey location. Has definitely
shown to have negative affect on our business volume."
17S - Market:
"I think it is very bad for the government to allow these types of businesses to come
into areas and operate. Too much burden has already been put on small business without the
giant companies coming in and putting a lot of small businesses out."
"Small business is the heart of this country employing the majority of the workers. They keep getting knocked down by taxes and now these types of business practices."
21S - Jeweler:
"I believe that if you offer good service & quality you will have very little to
lose to a discount store."
24S - Clothing:
"My company also manufactures men's neckwear, vests, and robe/boxer short sets which
we sell to retailers. Large discount operations have a deleterious effect on our business
on two fronts. They tend to drive small retailers out of business (our main customer
base); and, two, they are ruinous to our bottom line by their very nature of being a mass
discounter. In other words, it is not profitable business with them. They source the world
looking for cheap labor which makes me non-competitive."
26S - Electrical/Home Improvement:
"Our main concern is Home Depot, not that we can't compete; but, when a Home Depot
comes into an area, we believe that they lower prices below cost to get their foot in the
door because consumers are creatures of habit. Then we've heard that when they put
everybody out of business they raise their prices."
27S- Auto:
"The area of South Philadelphia is heavily saturated with auto repair shops and would
be hurt economically with the addition of discount service facilities coming into the
area. This would cause a number of shops that are on the verge of closing to do so causing
more people on the unemployment lines. The economy is very fragile in this area and should
not be subjected to anymore mega-chain business openings until the economy becomes more
stable."
29S - Hair Salons:
"The large chains should NOT be given any type of tax deferments because the
responsibility of paying the taxes and/or increases will again fall upon the small
businesses who cannot afford it and who will be forced to close."
"With the economy the way it is people want to pay cheaper prices for almost everything even if the community in the main loses jobs. These large chains can do nothing, but hurt small businesses. If a new business wants to be in an area, then the government and the community should decide whether that chain will help or harm the community."
33S - Jeweler:
"Jewelry business is rather personal/individual - consequently, some of your
questions were not relative to our particular company. Ours is an 80 year old business and
lots of our sales are by word of mouth, our proven honesty, and our employees who continue
to enjoy their positions working for a small family type of business."
35S - Pet Store:
"I feel it is unconstitutional to stop any retailer from entering an area. I do feel
the tax breaks and real estate deals are wrong."
"Just make the playing field the same and let the competition continue."
37S - Pharmacist:
"Wal-Mart just lost a law suit to three pharmacies in the local courts of their home
state, Arkansas, for allegedly driving drug stores out of business because of claims of
"predatory pricing." I believe that the major mega-retail discount chains are
known for taking more out of a community than they put in."
38S - Jeweler:
"If a large company moved into our area, I would try to enter into contract work with
them to do the repair or special order work my jewelry store deals in. If we could not do
the work, we would try to advertise quality work, personal service, and better prices. If
we see a drop in overall profit and gross sales, I would then look for other locations to
start over; but, it would have to be a large drop in business."
41S - Bookstore:
"I own a small independent bookstore. After 2_ years as the only 'new' bookstore in
my area, a huge Tower Books opened around the corner (about 300 feet away). My sales
started to drop slowly as my loyal clientele were wooed away by price cuts of 35%! Tower
could sell books (because they bought larger quantities and 'drop shipped' to their
various locations) at prices that I was buying them for! I have survived 2 more years, now
I am closing up." (May 1994)
44S - Optical:
"Out of all of the nationals coming in, only Wal-Mart does optical right. Therefore,
most will have very little impact on our company. I believe that the customers the deep
discounters attract are the customers they bring in for TV's, appliances etc."
49S - Home Improvement/Tile:
"Companies such as those Mega companies mentioned, have caused much concern in my
field. The impact on product identification is cause for alarm, with most people related
in the field of ceramic tile imports. Since the recent opening of Home Depot in the
Philadelphia market, I cannot say that I can express the same confidence that I have had
in pricing products. It is quite obvious that easy product identities are singled out and
low-balled so that smaller businesses dealing with some similar products will look bad.
This type of tactic has had a negative effect and has caused hype in our industry."
CH 86 - Plumbing/Kitchen Supplies:
"Since large mega-retail chains entered into the retail trade, they have attained tax
benefits not available for the smaller shop. Typically these large scale companies deal
directly with the manufacturer and then sell to the consumer. Now if they receive tax
credits i.e. Home Depot, they have the best of all worlds. They sell, in some cases, for
what the smaller company buys the goods for. We do have a community interest, product
selection interest and service (complete) to the end. We want to be here to stay, but with
an uneven playing field, why waste the time."
CH85 - Women's Casual Clothing:
"We started in Des Plaines in 1897 and have never had any special favors or help from
our city fathers. Our money has stayed here in town and we have helped hundreds of local
people earn a living. Why an established discount retailer has to have help is beyond me.
If they can't stand on their own two feet, they should be told to move on. Their profit
goes to headquarters, ours pays taxes for the town."
CH77 - Stationery:
"Events that have hurt our business in the office supply industry are:
CH73 - Health and Beauty/Rx Drugs:
"My situation is unique in that I have an ethical pharmacy which is surviving only
because I value the quality of my workplace more than I value a large paycheck. Consumers
aren't aware of the fact that small businesses are quickly disappearing. The service and
personal service given will be a thing of the past unless something is done. It will be
like the 'service stations' and no one will even miss having a service attendant pump
their gas for them because they weren't from that generation."
CH72 - Paint/Wallpaper:
"I'm hopeful that the independent dealer will survive. It takes a lot of people,
sales and profit to keep these big chain stores going. Let them fight each other! In the
interim, we will continue to offer above par service, and product knowledge with the
thought of out living the big store image."
CH71 - Optometry:
"Tax breaks are given to mass retailers to move into an area. I get no tax breaks -
totally unfair."
CH68 - Office Supplies:
"We have Super Kmart, Wal-Mart and Eagle about 3 blocks apart in Elk Grove. What's
the point?? Woodfield is 5 minutes from them and now Office Max is 5 minutes from there.
It's not fun anymore. 50% or more of office supply dealers have gone out in Chicago
area."
CH67 - Snacks, Sodas, Cigarettes:
"Low select prices on select items such as sodas hurts the vending business."
CH62 - General:
"Don't give tax breaks!"
CH61 - Restaurant Equipment:
"Redevelopment, industrial revenue bonds and tax abatements should only be used for
manufacturing or distribution businesses; not retail. Jobs are not created, only
transferred by retail."
CH59 - Food:
"The large chains run so many 'loss leaders' that it is almost impossible to survive,
much less grow your business. They sell many items well below my cost."
CH47 - Equipment Rental:
"Simplify government regulation and paperwork both nationally and locally to allow
more time to focus on the developing business. Anything to level the playing field with
larger deep pocket companies."
CH40 - Video Equipment:
"The commercial property tax is driving small businesses out."
CH38 - Food Products:
"I just spoke recently with our mayor about the 'tax breaks' that 'Sam's Club' gets.
I, as a small business owner, would never get the breaks and concessions that our elected
officials give these large retailers. The mayor agreed. This left a feeling of
hopelessness in my throat. It is very difficult to compete these days."
CH36 - Medical Equipment:
"We provide home medical equipment. The majority of our customers receive our
products and service via our drivers and service vehicles. The large retailers have had an
eroding effect on our business. The result to date has been customers receiving less
service with no knowledge of warranty, billing, or adequate follow-up. If compatible tax
incentives were made available to existing established small business, long term
employment and tax revenue would have a positive impact, long term, on each
community."
CH35 - "Other":
"Tax concessions to large companies should be given to start-up businesses only, not
established companies who take advantage of local inducements regularly. Kmart used low
rate financing on their leased properties. Wal-Mart as well. On the other hand, these
large discounters offer attractive well stocked stores at low prices which benefits all.
Many small businesses at retail are mismanaged by their owners."
CH32 - Food Products:
"Major complaint is these large merchandisers ask for and generally reclaim large tax
breaks and incentives to come into a community. This is never offered to small business.
We always pay full price and continue to carry a heavy load of the community
responsibilities."
CH20 - Lighting/Electric (a distributor):
"As a distributor, the trend to buy direct is not only with the national discount
retail chain, but also smaller, independent family owned business. The problem is, they
still can't compete. Their distributor, such as my company, also can't compete. Therefore
the middleman and small companies both get destroyed."
CH19 - Auto Parts:
"This country was founded on freedom and the free enterprise system. This system is
in grave danger by both our government and big business. The tax burden on small business
is now higher than our profits. A ground swell of small business is needed to stop these
current trends. Small business is a major employer, yet government treats us like second
class citizens."
CH14 - "Other":
"At least make it so large retailers must make a profit on items sold and pay their
full share of all taxes (sales and real estate)."
CH12 - Auto Body:
"We are an auto body repair facility and not really affected by mega-retailers but
have seen concerns from local hardware stores and neighborhood drug stores."
CH11 - Pharmacy:
"Large chain stores are robbing America of its heart. The average person is not
capable of perceiving what they will be missing when all the small business people of
America are gone. Their children will not find their first jobs, the little leagues and
churches and bowling leagues will not have sponsors. Our country is losing its soul -
corporate America is like a bad virus!"
CH9 - Greeting Cards, Stationery:
"My business distributes greeting cards, etc. to non-chain accounts. Our business has
been strongly affected in addition to our customers. A significant number of 'Mom-and-Pop'
locations have fallen by the wayside, unable to compete. In addition, the number of party
outlets has also diminished our sales as well. Our highest year in sales occurred in
1991."
CH8 - Software:
"I certainly agree with what you are surveying, however my answers and survey are
probably meaningless as I am in the proprietary software market and the companies you
speak of have little or no impact on me other than to possibly pull some of my business if
they sell some of the supplies I need."
CH91 - Auto Equipment:
"Big retailers have definitely decreased our sales in tires and exhaust parts and
shocks. Difficult to compete with Kmart prices on above items - also tires sold at Sam's
Club in area."
CH96 - Party Supplies:
"The larger discount houses hurt the small retailer. Consumers do not understand that
their claims to have lower prices are not always true. They can afford T.V. and radio
advertising while we can only rely on reputation and service. Grocery stores are getting
out of hand; they should sell groceries and leave the greeting cards, gift items, flowers
to the small retailer. I feel soon there will be no room for the small retailer because of
rent, taxes and discount stores."
CH98 - Lawn/Gardens:
"We handle premium lines of mechanical equipment that have traditionally been
marketed through certified independent dealer networks, outlets created by manufacturers
to assure the availability of professional expertise in the sales, service and maintenance
of their product lines. This 'value added' support cost is rarely provided by mass
merchants and thus this savings in their cost of sales plus their buying power, provides
them with their retail price advantage. In the long run its the consumer who will suffer
overtime as mass merchants force out 'value added' dealers. This type of product
eventually needs service. Few manufacturers of top end products provide for service only
dealerships. Sales have always been and still are the prime requisites of a dealer
franchise. As sales through 'value added' dealers diminish and those dealers become
competition victims to the low prices of mass merchants, then sources of professional
service and maintenance will become a problem for customers, and too late we will
understand that the lowest price was not the best price in the long run."
CH97 - Jewelry:
"I think the large corporations will dominate our economy. The true craftsmen will
sell out or go bankrupt. The jobs created in the large corporate stores are low wage and
often part-time. There are not as many management positions in the large corporate stores.
The youth in America are not studying the right subjects to compete in our global economy.
Technology is also taking jobs away. What took the U.S. 50 years to learn up to World War
II now takes less than 5 years to learn. I think the strongest entrepreneurs will survive.
Many less motivated people will work at Kmart and spend their checks hoping to win LOTTO
or gamble at the Casinos! Plus, big firms take over other firms and then they scale down
help, etc. - laying off many people."
K51 - Auto Equipment/Services:
"We are an automotive repair/service business with over 32 years experience in this
field. We have had mega-retailers entering our area rapidly in the last 2 years. Being
able to determine the problem and to determine the cause and effect, and to recognize the
solutions would be very difficult. As an example, to lower prices would only be a possible
temporary fix. Our local government has waived mega-retailers requirements through tax
abatements in the Northfield Square Mall. I am very interested in your study and look
forward to receiving additional information."
K50 - Florist/Arts and Crafts:
"Products you have listed do not pertain to our florist/gift shop retail operation.
However, there are national and regional chains that would affect us like Frank's,
Michael's, and Christmas chains."
K48 - Video Equipment/Games:
"There was a time when the video rental business was profitable as a stand alone
business. Now it is not, for a number of reasons: 1) Large stores use rentals as a 'loss
leaders'; 2) Purchase price to large stores are much lower; and 3) Major discounts are
available from manufacturers not available to small independents."
K47 - Food Products:
"We are faced with severe competitive pressures. We are truly an independent food
operation. Our competition is Jewel, Kroger, Eagle Supercenter (new 180,000 square feet)
and Kmart Supercenter (new 160,000 square feet) store. We will probably not survive. We
have fight and desire but we don't have the capital or mega dollars to compete with the
discount chains. We can't purchase product in many cases for what competition is selling
at retail. We also lack the buying power that large national and discounters have. As I
see it, the large are forcing out the small, with discounts to the consumer, until they
secure the market - then they do what they want."
K45 - Lighting/Electrical:
"Having regional warehouse home centers (Blains, Menard's, Home Base, Builder's
Square, Big 'R') in our areas has sharpened our abilities to survive. We are able to
describe the 'enemy' to our team members much more clearly."
K44 - Telephone Systems and Lines:
"Discount chains are wonderful for products that do not require additional service.
The customer ends up with the best price. On the other hand for products that require any
service, you should purchase at a smaller more personalized store."
K43 - Athletic Equipment:
"Currently, within a two mile radius, Wal-Mart, Super Kmart, K's Merchandise, and
Target compete for the same customers. The only way our retail business survives is
through service and quality products. There was a time in the business when large
retailers could not buy the high end sporting goods' products. Recently that niche has
eluded us - the specialty store. Fortunately for us, we have developed a sporting goods
team business which sells and serves the needs of over 300 grade schools, high schools,
and colleges. If we had not started a new business and continued to solely concentrate on
retail, we would have considered selling the business."
K39 - Health and Beauty:
"We have already experienced Super Kmart, Wal-Mart and soon Target. When I purchase
products for my business I have been forced to look harder at price and quality. Consumers
right now are only concerned with price; they are not looking for quality. When in a
discussion with clients we try to point out the value of personalized service and that the
mega-retailer really doesn't care, as to what will happen if they spend all their money
there in terms of jobs, families, communities, etc."
K - 38 Food:
"In our local area (Kankakee, Bradley, Bourbonais) TIF[Tax Incentive Funding] Money
has been used by Bradley & Bourbonais to develop large retail areas in the last 10
years. They used the TIF money to develop farm ground (not blighted areas as originally
proposed). During this time they have raped the tax base of the City of Kankakee. Many
Kankakee business have moved from Kankakee to Bradley and Bourbonais."
"Now that retail business has left Kankakee, Bradley and Bourbonais and county officials have decided to end TIF money for retail business, Kankakee has lost the weapon (used against them) to recoup retail business. TIF money was misused here and a warning should go out to other communities."
K37 - Games, Hobbies, Books:
"I live in Bourbonais, IL and have my radio controlled hobby business in Bradley, IL.
When we started seven years ago, we had no help from the village as far as tax incentives;
in fact never gave it a thought to inquire. We have worked hard to keep our business
intact, but find our taxes going higher each year both personally and business-wise to
maintain these large retailers that come in under the TIF Programs and then leave in seven
years or less. We little people are getting the shaft."
K33 - Optometry:
"We need to get rid of the one hour labs that draw people. They don't do the service
that they say and prices are high. We need to get back to the old ways. If we have to have
them I would try to limit only one per town. In so many towns there just too many of
them."
K25 -Doors and Windows:
"The tax abatements provided chains are an unfair practice; I know that helps mega
chain competition. This alone allows them to reduce prices to hurt other small
businesses."
"A free market to all, giving large and small businesses the same local advantages in taxes, land, etc, is most important to the survival of the small retailer."
K24 - Electronic Equipment:
"I have experienced several times in my career what happens when a major chain
leaves. The buildings are left vacant. Their restrictions to buyers because of competition
are contributing to why these large buildings are left empty. In our area TIF increments
have led stores to move a mile or two at most to be in another town and receive tax
breaks. I have also got to see local schools and police forces suffer through problems
because no tax money comes from TIF."
K21 - Audio Stereo Equipment:
"With a lower overhead I have been able to compete favorably with the large
discounters; however, if one moves close to me I may lose a handful of customers but the
increase in traffic would also increase new customers."
K20 - Food:
"A Super Kmart opened in February 1994 near our business strip and we have noticed a
definite decrease in customer traffic and sales. A Target will be opening in July and we
will probably experience another decline."
K18 - Auto Mechanical Service:
"I have a service business that employs four employees that make a decent living, not
minimum wages like mega chain stores. This puts me at a disadvantage even before their tax
breaks come into effect. I get no tax breaks. If I need money to remodel, I have to
finance it myself at local banks not unlike the national corporations."
K17 - Children's Dance Shoes:
"We are a small manufacturer of dance shoes, shipping nationwide to retail stores and
dance studios. Also we have a very small local retail business. Local Pickway and Wal-Mart
have brought in cheaply made dance shoes from other sources and sell them at almost
wholesale prices. We have lost several large retail accounts across the nation. Due to
this low pricing, small retailers cannot compete because of the nature of the product and
customers who are uninformed about quality."
K16 - Lawn and Garden:
"It looks like local, state and federal government help the giants who want to take
all the sales away from the small merchant who made the American way of life possible,
leaving us just to do service work for the giants. They make the easy money and we do the
hard physical work for them in the service sector."
K15 - Furniture:
"The big chain stores are taking advantage of tax breaks. They move from town to town
and close smaller stores. They build their stores with out-of-town builders, so nobody
local makes a profit on them. They want to make a living in town but don't support the
town."
K14 - Hunting/Fishing Equipment:
"We have four chain discount stores in our area and it is very hard to be competitive
and make a living."
K12 - Meats/ Poultry:
"We in the Kankakee, IL area are already experiencing the opening of several TIF
businesses which are creating problems for the smaller operations due to their discount
pricing on certain sale items. In my business we deal with fresh meat products and they
are highly perishable, so any drop in business is very critical. In the last year we have
experienced the opening of a Super Kmart and the state has been working on the highway for
one year. These two factors have created a 10% drop in our total sales."
K10 - Optometry:
"We are a full service, one hour optical business. We already have experienced a
Super Kmart opening (3-6 months ago). Our prices were already competitive - in some cases
lower. The only people we lost were a few (approximately 20-40) contact lens patients who
wanted a lower price on contacts. The average was $10-$15 lower, however, we don't make
our main profits from these patients, so the loss was negligible. Also when these people
go back for a new exam they will find it (the exam) $25.00 more!"
"Overall the opening hasn't hurt us much; however, we are a franchise with a national name, not just a small local owner. Even though we are not just a single owner, I do agree that Kmart, etc. do have the advantage, insofar if they have a slow month they can get an infusion of funds, etc. from their corporation, while we have to struggle along!" K7 - Home Improvement/Building Supplies:
"There should be some kind of truth in advertising when quoting such as 50%, 60% or 70% off, or 'Special Sale.' But what was the original price?"
K4 - Foods:
"There should be government regulations that super or big business locations be
limited to certain areas, because most or almost all of those big businesses get a tax
break from the state or city that they go to. Small businesses don't get that
privilege."
K1 - Gift Shop:
"We try not to carry the same products you find in discount stores. Our gift shop
carries the finer crystal, bronze, pewter and other specialty items. The Railroad Shop,
located on the second level, also carries items not found in discount stores."
K61 - Water Conditioning:
"We have to meet a customer on service and personalized greetings since we do not
have the buying power to attain the 'best' price as the large chains do. We are able to
meet an individual customer's needs personally; they are not just a number."
K58 - Jewelry:
"I mainly feel that mass merchandisers serve large numbers of people but lack quality
merchandise in our field. We, on the other hand, have to present a quality picture or
image to attract those who are more discerning. This includes educating the market we go
after, while still maintaining an edge on fair competitive prices. We belong to trade
groups that help us compete. The Kmarts, Wal-Marts, etc. don't seem to help the
communities they do business in."
K62 - Home Improvement Supplies:
"1. Reduce trading area to 3 mile radius. 2. Advertising locally. 3. Chains steal
employees to hurt your effectiveness. 4. Chains steal employees to hurt traditional
experience. 5. Chains then release employees after two years to reduce their payroll after
competition has been knocked out."
NY48 - Athletic Wear, Toys, Athletic Equipment:
"Geneva is an area in need of development, and Geneva already has Kmart and Wal-Mart.
The damage from their development was not major at best. There wasn't much available that
they created too much competition for. The area that needs to be reviewed here is the
definition of what we have in small businesses and then attempt to attract businesses that
are needed and wanted by the people. Geneva is too much duplication which is so
counterproductive. Same old-same old doesn't sell."
NY44 - Office Products:
"We operate an office products business. At the present time we are still not greatly
affected by the new Wal-Mart store. What the greatest influence is the prices published by
discount stores operating out of Syracuse and Rochester and the 'Paper Cutter' (Fays
Drugs) in Auburn and the catalogue they distribute. My concern is the fact the discount
stores sell, at the same or lower prices what I pay for the same merchandise. The
manufacturer offers these products at prices that are not available to me because of a
much lower overall volume."
NY40 - Marina Supplies:
"Wholesale stores have forced me to lower my inventory, reduce the prices of goods
sold and reduce my work force, but that's only part of the problem. School and county
taxes have doubled. Canal permits have gone up 800%. Cigarette and Alcohol tax has
increased. Beer licenses also went up this year, making me think seriously of ending the
sales of beer and cigarettes, because the reduction of the profits being made. New York
State is forcing the small business man out."
NY37 - Jewelry:
"Too many stores which are 'Mom-and-Pop' operations will be closed down by these mega
stores with their buying power and low prices. Only stores that can provide service and
knowledgeable service employees will survive."
NY36 - Silver and Crystal:
"Factory Outlet Malls and mega-retailers are destroying and will continue to destroy
'Main Street' in small town America. As 'Main Street' disappears, so will the tax base
which is so vitally needed for the entire community."
NY34 - Furniture and Stationery:
"I only hope I can make our business last long enough to educate our four children. I
will not allow any of them to work for us. I would not wish this on anyone. We have told
our children they would be better off working for a large company. My 15 year old says
'You say you have more freedom with owning your own business, but all my friends' parents
get days off and vacations and their families don't always discuss work.' I think the way
retailing in America has changed is revolutionary. There is no going back, the consumers
will not permit it."
NY29 - Computer Equipment:
"We have responded to the encroachment of large retailer selling computers by
specializing in markets that are not the 'retail' consumer."
NY28 - Food:
"Most open minded small businesses can survive large chain competition by adjusting
to their weaknesses such as specializing, offering personal services, delivery, and the
list could go on and on depending on the individual situation."
"Generally small business cannot be everything to everybody when they are up against the giants. Reduce the areas that you are weak in and concentrate your efforts on the strength of the business."
"Our strength is subs, salads and sandwiches. When we opened 12 plus years ago, McDonalds and Burger King were here already. Now there is Arby's, Wendy's, Subway, Denny's, etc. While a dozen or more independent businesses have come and gone, we are surviving."
NY10 - Home Improvement:
"We have had a Wal-Mart move into our area within the past two years. We lost 35%
gross sales and fired all employees. The best thing to do is to provide service and
knowledge."
NY7 - Tavern:
"I feel the American public welcomes the discount prices offered by large discount
houses, as long as it does not affect them personally. My business is a small 'blue
collar' tavern. I pay $2,140 every three years for a state license to sell on premise
liquor and beer and off premise beer. Large food and discount stores (i.e. Newmans,
P&C, Fays Drugs) pay $75 per year for a license to sell off-premise beer. These large
stores use beer as a 'loss leader' to get the public in the door. They sell my only
product to take out for less than I can purchase it wholesale. In my opinion, N.Y. State
requires license fees for the money only."
NY6 - Restaurant:
"It is extremely difficult at the present time to compete with larger competing
restaurants, especially franchises, because in a tourist area, it's the franchises that
are the first draw. Taxes and insurance and Workman's Compensation costs continue to rise.
Suppliers continue to raise their prices and yet if we do, everyone becomes upset and
stays away. It's basically a 'no-win' situation."
NY5 - Auto Supplies/Service:
"The way things are right now, if a chain came here in Geneva it would probably force
us out of business."
NY4 - Men's Wardrobe:
"We are a better men's specialty store. Chances are, a customer who wants a better
quality in men's wear will come to us or a similar type store. I feel a Wal-Mart type
store hurts a store like us by taking away traffic from our 'Main Street.' We lose window
shoppers who might stroll in just looking, and possibly make a major purchase. The
mega-chains compete with so many types of stores (hardware, electronics, etc.) that people
will tend to go there first before checking 'Main Street'."
NY2 - Jewelry:
"The Geneva market was already affected by introduction of Kmart, Wal-Mart (2
locations), Wegmans and Tops (Superstore). Market surveys for this area do not support
this amount of retail space and now three major outlet strip plazas of over 150 stores are
planned for Geneva development within 12 months."
NY1 - Men's Casual Clothing:
"One of the biggest negative impacts is the reduced downtown traffic caused by these
mega stores. It is hard to draw customers to a downtown location. These chain stores, by
being situated on the out-skirt of the city further erode customer traffic. A positive
impact is that you have to become a better merchant in order to compete. You cannot remain
stagnant."
NY54 - Bikes/Equipment:
"It's a free enterprise society so they have every right, but these 'mega stores' are
putting us small guys out of business and ruining downtowns."
NY55 - Bar and Grill:
"I don't understand why I was sent this survey. My business is a floundering bar and
grill. In the nine years that I've owned it, I have seen business dwindle to nearly
nothing because of laws, rules and regulations and the economy."
NY57 - Lumber:
"We currently have Builders Square locations in Syracuse and Rochester. Although they
are approximately 40 miles from us we still realize their impact. Home Depot is currently
building and/or planning stores within both of those market areas. To further complicate
our rural market, the Depot is developing a strategy to penetrate the rural/smaller market
areas. It goes without saying that it is tough as hell out here and getting worse. We are
doing everything possible to survive. Our business plan is not designed for 3 to 5 years,
it is based on daily survival. Without help, I believe most independents will not
survive."
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