News
Small stores taking on Wal-Mart
Francis Duncan operates a farm and home store and Don Koontz runs the downtown hardware store. Like other local merchants, their biggest competitor is Wal-Mart.
By Carl Manning
Associated Press in the Chicago Tribune
"We don’t try to compete with them; there’s no way. We let them do their thing and we do ours," Duncan said. "If they get something we have, we just close it out."
Duncan and Koontz are among the independent retailers who have heeded the advice of economists to find a niche that will help them survive the large-scale discounters and big-box specialty retailers.
For Duncan, that means selling agricultural items such as salt blocks and bailing twine, along with lumber and fencing.
Since 1985, Duncan has been co-owner of Hiawatha Farm and Home across from the spot where Wal-Mart opened four years earlier on the outskirts of this rural northeast Kansas town of 3,400.
"I would rather be here than downtown or across town. Wal-Mart draws traffic. A lot of guys drop their wives off there and then come over here," he said.
Koontz knows perhaps better than most what he’s up against. He managed the local Wal-Mart store for five years before going into the hardware business in 1997.
"I can’t buy as cheap as Wal-Mart, that’s a fact, but I can provide better customer service, and that’s a fact," he said. "I focus on things they don’t have."
As he talks, Gus, a German shepherd-husky mix, lies on the floor watching customers come and go. "He’s my people greeter," Koontz said with a chuckle, referring to the Wal-Mart employees stationed at the discounter’s front door.
When Koontz took over the hardware store, he shifted its emphasis from items like motor oil and car filters to more plumbing supplies and paint. He also puts a premium on special-order items like a grill for an outdoor cooker.
Word of mouth
"You come in and tell me what your problem is and I’ll figure out what you need," Koontz said. "If you are happy with my service, how many people are you going to talk to? They say, `Go to Don’s, he’ll fix you up.’"
Like other local merchants, Koontz knows most customers by their first names and prides himself on personal touches. For contractors, he runs an open charge account and settles up at the end of the month without interest.
The experience of Hiawatha merchants demonstrates that a large discount store does not always mean an end for local businesses, said Kenneth Stone, an Iowa State University economics professor.
"People say it’s running small businesses out of town, but the good ones find ways to survive," said Stone, who has studied Wal-Mart’s impact on towns for 20 years.
But, Stone said, competition has gotten so intense over the years that many smaller stores simply cannot survive a corporate colossus.
"It’s primarily the big-box stores that have caused a lot of this, not just Wal-Mart. This is the epitome of the capitalistic system," he said. "The people who figure out a better mousetrap are going to survive."
Wal-Mart spokeswoman Sharon Weber at the company headquarters in Bentonville, Ark., said the nation’s largest retailer doesn’t set out to force local merchants out of business.
"Our only strategy is to bring everyday low prices to our customers," Weber said. "We never want to see any business go under."
Helping local economies
Weber said Wal-Mart helps local economies by providing jobs, bringing in customers and purchasing from local suppliers.
Steve Smith, a pharmacist for 34 years, built a corner drugstore in 1984, about the time Wal-Mart opened its pharmacy.
"Wal-Mart made me a better businessman. You look at ways to compete," Smith said.
For example, Smith prepares customized prescription medications to help meet unique patient needs. He visits customers at home to make sure they take their medications correctly, and he delivers or stays open late to take care of a customer.
He also offers a variety of specialty equipment such as walkers, crutches and chairs for the disabled. He has a room where he can talk privately with customers.
At Just for You Jewelry and Gifts, co-owner Debbie Phillips decided to expand her customer base for collectibles and fine jewelry by starting a Web site four years ago. "It’s not the majority of sales, but enough to make it worthwhile," she said.
Copyright © 2003, Chicago Tribune
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