Wal-Mart and local merchants
The proponents of Wal-Mart’s entry into the local scene argue from the human resources perspective. Their emphasis is that since the chain provides more jobs, it should be allowed to open anywhere. They further justify this by arguing that there is no need of keeping small retailers in business while masses remain jobless while Wal-Mart can offer a solution whenever it opens a store (Brunn, 2006). In fact, when Wal-Mart opens a store, the majority of the employees are sourced locally to indicate corporate citizenship of the firm among the locals.
The other argument is from the consumer price perspective. Wal-Mart is known to offer its products cheaply giving customers a wide bargain compared to other stores. Thus, the entry of a store is a great welcome to the community given that getting goods at a great price would be possible. However, in some localities like Chicago, unions had elbowed Wal-Mart out before 2005. Their reason for doing so being that the retail chain would contribute to mortality of their ventures.
Unlike other types of retail chains, Wal-Mart with its ‘Always low prices’ slogan targets localities shunned by competitors (Toney, 2007). These are small towns or unmerited suburbs. Reducing the mortality of local merchants Wal-Mart does not appear to wound local merchants when it opens stores (Gillette, 2002). The American giant retailer creates a mixture of fright and respect from local merchants. Wal-Mart stores on the face value seem to create a market for local suppliers due to the retail capacity.
However, in reality, the retail chain price demands makes suppliers unable to trade with the terms go under (Brunn, 2006). Sometimes Wal-Mart even procures supplies from outside the US in order to save on prices, a move that has driven a number of suppliers out of business (Toney, 2007). Although it is widely believed that the retail giant is a ‘brutal killer’ of local merchants, merchants have devised ways of remaining ahead of the game.
First, local merchants are always advised to adopt to compete favorably like increasing customer service (Carl Manning Associated Press, 2003). Local merchants have learned the best basics of competing favorably with the retail giant, one of them being heavy investment in customer service (Gillette, 2002). The relationship between Wal-Mart and local merchants is improving given that price bargains are given to local merchants as well. Secondly, local merchants have learned to play their league and allowing Wal-Mart play theirs (Gillette, 2002).
In this case, if stock being offered has local merchants has been adopted by Wal-Mart, the best important step is to diversify into other types of stock while slowly shedding off what Wal-Mart is offering (Carl Manning Associated Press, 2003). This is because it is impossible to compete with Wal-Mart price wise. Economists advice local merchants to invest in creating market niches that will constitute loyal customers. One of the ways of creating a market niche is avoiding being indifferent with customers. This can be achieved by making sure that a merchant knows his/her customers by name (Craft, 1992).