Introduction
This paper discusses how the mega-stores driving away small businesses, and the effect this has on the US economy. Small businesses that largely supported the American economy have continued to shrink in number as their place is taken up by mega-stores. The effect of this has been the reduction of living standards and rampant unemployment. Many citizens who previously owned and ran small businesses have lost jobs as the small enterprises are driven out of business by the mega-stores.
The emergence of mega-stores into the market has affected both the economy and the social life of communities. Mega-stores and other big retailers offer lower prices than the small businesses; they therefore attract more customers than the small business enterprise. Mega-stores have put up a stiff competition for small businesses forcing them out of the market.
Mega-stores Driving Away Small Businesses
Before the mega-stores and giant retailers hopped into the retail market, small businesses such as department stores and retail chains were doing profitable business. The business environment changed soon after mega-stores and giant discount chains begun opening up branches all over. The government started releasing funds for construction of mega-stores and other giant retail shops, supporting them to spread further (Hoovers 34).
Swirski argue that small businesses are capable of creating more than half of employment opportunities and domestic products in the US (112). People are able to earn a living through self employment in small businesses. Killing small business by supporting the growth and development of mega-stores, only leads to escalation of the unemployment situation in the country.
Mega-stores put more emphasis on volume purchase and offer a variety of products and services (Pieters and Young 50). These stores are huge with enough space for moving around and even provide space for customers to park their cars when going round on shopping. Customers move away from the squeezed small business enterprises to the spacious and one stop mega-stores. Most people prefer doing their shopping from the same store (a one stop shopping) and mega-stores deal with general merchandize (Harper 22).
Mega-stores have also succeeded over small businesses because they comprise of a variety of the shoppers needs. Many of them comprise of different departments ranging from household, restaurants, mini markets, garage facilities, video rental shops etc. There are others that offer accommodation services, the convenience of getting all these amenities and needs in one place has been the attraction of many to mega-stores (Swirski119).
Mega-stores continue to thrive even in small towns where small business owners had relocated pushing them out of business still. Mega-stores offer lower prices for their goods than small businesses. Small retailers end up closing their businesses to seek employment in the mega-stores (Bannered 88). This has led to many retailers who were living a middle-class life to seek jobs in mega-stores for wages which are lower than what they used to earn from their own businesses.
Mega-stores are also involved in buying small business enterprises to clear the competition and expand their own branches. Small businesses have failed to compete with the mega-stores even though they offer more personal services. This leads them to be driven out of the main market to a more limited position in the market (Hoovers 45). Mega-stores have further driven away wholesalers who usually served small retailers. This is because they are able to buy directly from manufactures, and act both as retailers and wholesalers at the same time.
Customers always compare mega-stores and small businesses and choose the most convenient and cheaper place to shop. There are factors that they consider while making their comparisons. These include quality of products and services and reliability. Most mega-stores win over small businesses because they offer better services and quality goods and they are reliable. Mega-stores use modern business technology tools such as QuickBooks POS, which give them a high competitive edge (Swirski 125).
They use modern technology for distribution, computerized tracking systems for customers and managing inventory controls. Mega-stores have also attracted government attention with the hope of receiving more tax from them and job opportunities for its citizens. All these factors have led to the driving away of small businesses.
Conclusion
On one hand, mega-stores have continued to grow and become successful, but on the other hand their success has become a threat to small businesses and the community at large. As mega-stores continue to thrive so many retailers who owned successful small businesses lose their source of income. Moreover, many employees have lost their jobs. Small businesses can survive only if they can learn more effective ways of doing their business and competing with mega-stores.
They should use the latest technology for distribution, tracking systems and inventory controls. Government should also release funds to support and assist falling small businesses which have impacted not only the retailers but the local communities as well. Small businesses should be encouraged because they have a greater significance on the local economy and the community.
Works Cited
Bannered, Subhabrata, Bobby. Corporate Social Responsibility: The Good, the Bad and the Ugly. Massachusetts: Edward Elgar Publishing, 2007.
Harper, Stephen, C. The McGraw-Hill Guide to Starting your own Business: A Step- by-step Blueprint for the First-time Entrepreneur. New York: McGraw-Hill Professional, 2003.
Hoovers. Hoover’s Handbook of World Business. Boulevard: Hovers Inc, 2002.
Pieters, Gerald, R. and Young W. Doyle. The Ever-changing Organization: Creating the Capacity for Continuous Change, Learning, and Improvement. Boca Raton: CRC Press, 1999.
Swirski, Peter. All Roads Lead to the American City. Hong Kong: Hong Kong University Press, 2007.