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Big Box Stores Vs Mom and Pop Stores - Case Study Example

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This paper 'Big Box Stores Vs Mom and Pop Stores" focuses on the fact that Big Retails Stores also known as Big Box Stores gained prominence in the last decade. At one side, they gained the favour of local customers for offering products at relatively cheap prices. …
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Big Box Stores Vs Mom and Pop Stores
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Download file to see previous pages Managers and owners of small stores argued that national retailers were able to offer cheaper prices since they bought items in bulk amount and also that the reach of these national retails allowed them to offer a wider range of products. It was also observed that when big-box stores opened up their stores in a new locality, several small stores were forced out of business. In this paper, an attempt has been made to understand the impact of big-box stores on mom-and-pop shops and whether the criticism against big box stores is valid.

Big box stores as defined by Barry, Evans and Mathur, 2011 are discounters with stores between 50,000 and 200,000 square feet, single-story buildings, and strategies based on high volume via low markups’ (Barry, Evans and Mathur, 2011).

The term big box store is generally meant for stores that are operating as part of a retail chain and have numerous products to offer. Big Box stores can generally be divided into two categories: speciality stores and general merchandise. Retail stores such as Wal-Mart, K-Mart and Target fall in the category of general merchandise while JC Penny and Best Buy are categorized under speciality stores.

Big box stores are always big; this means that with large operating units these stores have a bigger shelf display. These retail stores occupy a huge space in terms of land which allows them to stock greater merchandise. This means two advantages for big box stores; firstly, when big box stores buy products to sell further, they usually go directly to the manufacturer. This implies that they go away with intermediaries and are thus wholesalers in the true sense. Being wholesalers, they have the advantage of selling their wares at a cheaper price as compared to ordinary stores including the traditional mom-and-pop stores. And with the recent recession, this means more customers for the stores.

Also, big box stores, and popularly Wal-Mart, derive profit by selling products at highly competitive prices and using a higher volume of sales to make profit.    ...Download file to see next pagesRead More
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