They found no change in profitability in small businesses after a Walmart opened. My general thinking would be that for a few businesses they saw a decrease in profitability, but overall did not.
Great points made, though I'd be curious about the data on change in visits versus change in average purchase amount at the Main Street stores.
Perhaps the boutique bicycle or furniture stores offer specialty products Walmart doesn't, but Walmart can still win business from them. Think someone buying the specialty dinner table, but then they buy all the placemats, dishes, and silverware (read: higher margin products) at Walmart. Buyers are savvy like that.
These higher margin "attachment products" were a major metric we focused on driving when I was a manager at Target. Target earned a measly ~$7 margin on selling a $300 gaming console, but 20-40% margins on the games, controllers, and the ("very necessary") extra cables.
I could only find one study on this: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1465-7295.2007.00091.x
They found no change in profitability in small businesses after a Walmart opened. My general thinking would be that for a few businesses they saw a decrease in profitability, but overall did not.
Great points made, though I'd be curious about the data on change in visits versus change in average purchase amount at the Main Street stores.
Perhaps the boutique bicycle or furniture stores offer specialty products Walmart doesn't, but Walmart can still win business from them. Think someone buying the specialty dinner table, but then they buy all the placemats, dishes, and silverware (read: higher margin products) at Walmart. Buyers are savvy like that.
These higher margin "attachment products" were a major metric we focused on driving when I was a manager at Target. Target earned a measly ~$7 margin on selling a $300 gaming console, but 20-40% margins on the games, controllers, and the ("very necessary") extra cables.