USA
Single-store independent retailers in the US are widely referred to as “Mom and Pop” stores. As with the UK, larger brands moving into the territory of these stores has piled pressure on smaller-scale retailers. For them, this has meant turning to franchise models like 7-eleven.
The biggest threat, however, is only just starting to emerge: Walmart, owner of Asda in the UK, but a grocery behemoth across the Atlantic, is only just beginning to enter the convenience store market.
Independents aren’t lying down, however, and one city where there is a developed organisation against the company is New York. Using the momandpopnyc.com website, the Neighbourhood Alliance spreads statistics and campaigning information. “…local business dollars are three times more likely to re-circulate within the community than those of mega-retailers like Walmart,” it tells readers, with a passion many RN readers would empathise with.
Writing an article in the New York Daily News, another anti-Walmart campaigner and spokesman for the city’s Small Business Congress, Steve Barrison, argued: “Countless communities, and peer-reviewed surveys across the country all reach the same conclusion: When Walmart moves in, small businesses and jobs move out; Main Street dies.”
There is, among American academics, a counter argument developing. Andrea M. Dean and Russell S. Sobel from West Virginia University have looked into the impact of Walmart on small business.
They argue that while direct competitors such as standard grocery or hardware stores might close when the supermarket arrives, its lower costs actually mean consumers have more disposable income to spend on small businesses locally.
They quote another academic to prove their point: “Emek Basker of the University of Missouri–Columbia has found that the opening of a new Walmart store results in city-wide price reductions of nearly 2%-3% in the short run and approximately 10% in the long run.” They conclude that, “consumers will spend at least some of those savings at other small businesses”.
Key products
“In the US, for example, the value of gas is now higher and the margins are higher,” says analyst Shushmul Maheshwari. “There is therefore more interest in selling petrol.” That’s no wonder – between February 2010 and June 2011 petrol prices rose by a dollar a gallon and continue to retain much of that increase today. Yet, according to data produced by the US Department of Transportation and US Energy Information Administration, undulating prices have correlated near perfectly with Americans’ use of their cars. It’s a classic example of the dilemma between raising prices more slowly and getting extra customers, or raising them too far and driving them away.
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