Specialty retailers are facing more competition from the giants than ever before. I get calls and emails on a regular basis asking for advice on competing against these big-box stores. Unfortunately, there is no easy, one-size-fits-all solution. However, that does not mean that it isn't possible. Here's an example of what one health food retailer did when a giant moved into town.
Living Seed Health Foods, based in Toronto, had been in operation for over 20 years when a major health food chain announced they were opening just one block away. The two owners of Living Seed (a husband and wife team) decided to wait before making any major changes. However, shortly after the giant retailer opened, they found their sales dropping so they knew they had to take action.
At the time most of their business came from food sales and they knew they couldn't compete with their new competition so they gradually changed their product selection. Eventually, their product mix became 80 percent supplements and 10 percent food compared to 60 percent food and 30 percent supplement before the change. They were patient--helping customers learn more about the products they bought even when the products were purchased from the giant down the street. However, they didn't stop there. They gave their store a makeover that included designing a new logo, painting the interior, and introducing new shelving. Over time, customer counts started to climb and business began to return.
The entire process took about four years and there were times the owners felt they weren't going to make it. But persistence paid off and they are happily co-existing with the giant retailer.
It's not easy to compete against the big-box stores and giant retailers but it is possible.
I came across this story in the Sept/Oct issue of Canadian Health Food Retailer. I hope it has been helpful. As always, I welcome your comments.