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How to Compete with the Big Box Store Down the Street

2 minutes Read

big-boxA new “big-box” store has opened down the street. What should a small business owner do to stay alive?

A megastore is being built a few blocks from your business, and you’re worried. At first you tell yourself it’s all right, and that you’ll do just fine. Then, every day on your way to work, you watch a space being built that can fit 30 of your stores inside, with room left over for a snack bar. Then it gets very real. If you’re like most business owners, that realization is followed by the feeling that you might not make it.

But you have more control over what happens next than you might think. Let’s look at what you’re likely to face, and how you can deal with it.

Determine how you can—and can’t—compete.

  • Price
    • The truth is that you can’t compete with big box stores on price. They’re able to negotiate huge discounts with suppliers. Even if you deeply discount your prices, they’ll probably still undercut you.
  • Convenience 
    • You can offset the price advantage by making your customers’ shopping experience simpler and more enjoyable. A customer looking only for a plumbing part, for example, might rather drive to a small store, where she can park close to the entrance, walk a short distance, and head to a checkout line less than ten people long. Customers are often impatient, and willing to pay a premium for convenience.
    • Now look at your own operation, and consider how you can make it more appealing. One complaint of customers in the bigger stores is they can’t find what they need. Make sure your signs are clear and everything is organized how a customer would look for things, not how you want to inventory them.
  • Customer Service
    • If you’ve ever tried to get help in one of the megastores, you know how frustrating it can be. In a smaller store, with more employees per square foot, customers stand a much better chance of getting the help they need. Make sure your employees know about the products they sell and where those products are located in the store.
    • Finally, offer services that your big-box competitor doesn’t, such as fast delivery of large items, customer loyalty perks, and the like.

Take advantage of small business benefits.

  • Supplier Perks
    • Some suppliers will offer special deals to their loyal small business customers, partly because sales to smaller businesses generally have a higher margin than sales to the big guys. On select items, you might be able to beat the competition’s prices. Ask your suppliers what they offer.
  • Small Business Grants
    • While small business grants can be tough to secure, you still may want to look up government education and consulting programs, Small Business Association loans, and small business grants. You might qualify for and benefit from programs designed to assist small businesses like yours.
  • Small Business Programs 
    • Some of the major retailers actually offer assistance to small businesses in their area. Go to the company’s website, and if you don’t see anything on community relations, contact the community relations department and see what they have to offer.

Even after incorporating all the right procedures, you might end up having to tighten your belt. If you are realistic about what needs to be done, and willing to make the changes necessary, there’s no reason you can’t continue to be profitable, despite the new big kid on the block.

Photo credit: Pavel L Photo and Video/

IMPORTANT INFORMATION: This is not investment, tax or legal advice. Should you have questions please consult you own attorney, tax accountant or other appropriate expert having expertise in the area of your question or before making important decisions in these areas.