The more and more I talk to people today is I get a sense that they share a common feeling. They are all getting really tired of the experience they are having while visiting most of the Big Box Stores. Some examples are Walmart, Home Depot, Canadian Tire, Bulk Barn, Mark’s Work Warehouse, Best Buy, Future Shop. Not all of these stores are a bad experience. But they have a lot of things in common that will ultimately cause their downfall, in my opinion.
The first one is their buying power and how some of them use it on their suppliers to gain that better price that you see as a bargain. It’s all short term because that approach puts the suppliers out of business. One of the above stores opened in my town and couldn’t get the proper shelving locally because the original supplier was out of business. Guess what, the contract for the shelving goes to the lowest bidder which means the lowest bidder finds out they can’t produce it at that price and they go out of business. They had to have it brought in from a source thousands of miles away.
The formula said they must open on a particular day no matter the cost, including cracking the whip on the staff. They used to call us all into a store wide meeting to tell us it wasn’t going fast enough. And it’s going to be even slower now because you just wasted more production time by having this stupid meeting and you demoralized the hard workers. Breaks just got longer. Lunches were longer and the trips to the bathroom were more frequent. Head office people should just stay locked up behind their desks unless they are willing to get their hands dirty. I loved getting my hands dirty. Staff doesn’t ask why then. They just say what needs to get done.
So eventually, the number of suppliers dwindles to a point that the big stores start thinking about taking control of the supply source. That’s kind of like taking the vise-grips to your own lower body parts. So their short term price advantage has dried up. They hope their competition has dried up by now. But there are always entrepreneurs out there that live in the neighbourhood and decide that they could open up a store and do better than those big box things.
The second one is how employees are handled. Low wages. They would prefer pack mules but the mules won’t do their bidding. You might as well leave your brain at home because they aren’t interested in your ideas. They have a “tried-and-true” formula that some bean counter has developed and they are sticking to it because it worked somewhere. So the employees just avoid the customers because they get enough grief from their employer and the smart ones just leave. Enough is enough.
The entrepreneur recognizes that the job needs to get done but happy employees result in happy customers which is good for business. The entrepreneur recognizes he must be perceived as competitive and looks for alternate ways to make the in-store experience worthwhile. He also knows that he must provide price incentives to draw customers into the store.
In my town, there is a medium sized grocery store and two big box grocery stores. One of these big box stores is right next door to Garden Foods, the medium-sized family run grocery store. The store is always quite busy because they have fresh produce, helpful and friendly staff, reasonable prices, fresh baked goods, a huge deli and meat department, a hot food department.
The staff actually look like they enjoy working there and they say things like “excuse me and how are you and thank you”. It actually feels nice in the store. And customers can be found talking to each other all the time. You learn how to drive your shopping cart in this store. Everybody always says sorry when you do the “sneak-around” in the aisles. No one gets upset. Once in a while the owner says hello. He is busy but if you ask him to help, he will or at least direct you to someone nearby that he knows can help.
So why would I shop elsewhere? Sometimes I need white bread flour and the real dark demerara sugar but that isn’t too often. They don’t stock that stuff in the store.
The other way the big box store tries to keep it’s price down is by shopping off shore. Again, that is short term thinking. Freight isn’t getting any cheaper. If fewer and fewer local people are gainfully employed then fewer and fewer shop at their stores. The bean counters see that this particular store is under performing or, if it is a franchised store, revoke the franchise. In both cases the store closes. Bulk Barn was the first to go. The staff didn’t look too happy and the prices weren’t very good.
And they offer the equivalent of fast food up-sizing in their products. Do you really need 24 light bulbs or an extra jumbo jar of not-so-delicious jam?
Some of the big box stores will figure it out and adjust their strategy but start looking for a better choice because their days are numbered. I won’t miss them because they don’t really care about me and I don’t care about them.
Guess we’re even.
