Who will win in a modern version of the tale of David and Goliath -small shops versus hypermarkets? Will neighborhood grocers be able to cope with commercial retail behemoths unarmored and equipped only with "a sling and stone"? In the following minutes we will be telling you more about the dispute and the future of small grocery stores in the vicious battle for every single customer.
Some experts say that the golden age of Goliath is running out and that the business is moving from large commercial retail chains to small neighborhood convenience stores "within easy reach" from home. Supermarkets are already losing positions as one of the reasons is the saturation of the market. The other is related to high fuel prices, the boom of electronic commerce and the economic crisis that forces most people to buy only the most necessary products, rarely making extravagant purchases. It’s been a long time since the weekly shopping was the main hobby for the weekend. Gasoline is already expensive, and besides, what's the point in traveling long in traffic jams when you could easily find the same goods in a nearby grocery? Many people returning from work now prefer to go through a local store and do some quick shopping for dinner.
Small grocery shops rely mainly on their regular clients
Other professionals in commerce are in the opposite opinion. They see the future in hypermarkets because they believe that the market is not yet saturated. Now there are 54 large retail chains per one million Bulgarians. In the capital Sofia only, two new huge hypermarkets are expected to open doors before Christmas.
"We can not fight them with lower prices because they sell even at below the delivery price, they engage in unfair competition and are stifling us with their unrealistically low prices," says Sasho Alexiev, owner of a small grocery mainly selling fruit and vegetables. The neighborhood has several large stores and the competition is tough.
“It's getting harder and harder and it seems like we won’t be able to survive much longer. Grocery stores like mine are usually owned and run by families. We make our living this way. If we close down, we will lose our jobs and our mean of livelihood."
According to Sasho who has been in the groceries business for 20 years, small traders tend to disappear from the market at the expense of the behemoths. Because of the economic crisis, people look for cheaper goods and no longer regard quality as the main criterion.
Large retail chains may sell several items on promotional prices but would profit form others
Will David be able to win the fight with Goliath?
"No”, the trader says firmly. “The future is in hypermarkets." Neighborhood shops survive thanks to their regular customers. "We know each other and as soon they enter the shop, I know what they are going to buy.”
"Yes, it's nice to know the personal tastes and preferences of your customers, but I am not sure how long this will last. It is very difficult now”, Sasho complains. “The problem is the unfair competition because the state seems to be more tolerant to large chains as they are said to provide jobs. Yes, this might be true, but how many jobs will a medium-sized retail chain provide - 100-200? And how many thousands of shops will have to close and how many people will become jobless? Nobody says anything about this. For example, I have two employees, and there are many shops with two employees who will lose their jobs. Let there be competition in prices, quality, etc. But we can not fight with their prices. Supermarkets can sell a few items at a loss, but they can compensate by selling other items at higher prices. I can not sell at a loss because I have only 20 to 30 products and they have thousands," says Sasho Alexiev, owner of a small shop in a Sofia neighborhood.
So how could David fight with Goliath?
"With quality products, good service and flexible working hours” – Sasho lists the assets he holds in his “sling”. “No matter whether there are customers or not – I have to be in the store. People depend on me. They come here because they know they will receive quality products, a good word, compassion and a smile."
English version: Rossitsa Petcova