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Will Walmart's Smaller Stores Threaten Local Businesses?

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A longtime foe of small business owners, big box retailer Walmart now is threatening to invade their space even further with the introduction of hundreds of new smaller stores.

This time around, though, experts believe small business owners, who often have a loyal customer base and knack for customer service, may not be so outmatched.

 “People have learned to compete with them over the years,” said Kenneth Stone, a professor of economics at Iowa State University who has been researching Walmart for more than 20 years. “There are many examples around the country of small businesses that are very astute at offering what the public wants.”

According to Bloomberg News, is beginning construction this month in Arkansas on three of its new smaller-format stores, which will be just one-tenth the size of the usual 185,000 square-foot Supercenters. The smaller stores will feature a grocery section and a pharmacy.
Stone said this isn’t the first time the big box giant has tried a new approach.

“They have been playing around with various formats for years, and they haven’t had too much luck with it,” Stone told BusinessNewsDaily. “I think they are going to have a tough time with this one also.”

Retail expert James Dion agrees it could be a difficult start for the smaller Walmart stores. “It is a whole different world in retail running an 8,000- to 10,000-square-foot store, compared to an 80,000- to 100,000-square-foot store,” Dion said. “Walmart is initially going to struggle with this concept, but I think eventually they will get it right.”

While the thought of a new competing business coming to town is a bit worrisome, one local business in Gravette, Ark., – where Walmart is slated to open one of its first smaller stores – is banking on good customer service to keep its patrons from straying to the new competing retailer.

“It is concerning, but competition is good,” said Lindsey Watford, a pharmacist at the Gravette-based Teasley Drug. “Our customers have chosen us because we really get to know them, and go the for people.”

Dion said small businesses in the towns Walmart targets for its new stores will need to know their customers better than ever and offer top-notch service to keep Walmart from poaching their patrons.

“That is a way for them to compete with (Walmart) initially and forever,” Dion said. “People will pay a little bit more for good customer service.”

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.