Tuesday, July 31, 2012

How to Compete with the Big Chains? Think Locally.

What do you do as a small, independent retailer when a major food chain, big-box store or national franchise becomes a direct competitor? All along you've been specializing in items that aren't in the mainstream but sell well, and then some big outfit like Sears or Walmart decides they're going to horn in on your action.

A perfect example is Kroger, the Ohio-based supermarket chain that recently began offering natural foods inside half of its 2,500 stores, setting aside aisles now designated as Nature's Markets. When this happens, what can you as a specialty retailer do to remain in business and retain your dominance in any niche market?

Your first reaction might be to lower prices in order to compete with the big stores. But that's like bringing a knife to a gunfight. There's no way you'll ever compete on price. Yet there are steps that specialty merchants can take in order to maintain position. 

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