Small family grocers’ inherent advantages over chain stores: a review

Abstract

Purpose As a result of the growth of the modernization of retailing, small family grocers have suffered because of the disadvantages of their limited operating resources in comparison to those of corporate chain retailers. The purpose of this paper is to use the biological analogy of natural selection to illustrate how the idea of retail coexistence rather than mutually exclusive competition can work to the benefit of small family grocers. The inherent differences between chain retailers and small family grocers are examined and their inherent advantages identified. The appropriate strategies for small family grocers toward the particular market are then proposed. Design/methodology/approach The review of literature is implemented through the lens of biological analogy to identify the inherent advantages of small family grocers over chain retailers. Resource-advantage (R-A) theory is then incorporated to explain the synthesized framework. Findings Size and operational orientation are identified as the inherent differences that small family grocers can utilize to gain some inherent advantages over chain retailers in relation to the proposed segments. The establishment of a personal relationship with the customer is the key inherent advantage that is naturally facilitated by the individual orientation of the small family grocer. Within R-A theory, inherent advantage is seen as a special case of a comparative advantage in resources. Originality/value The different viewpoint inspired by the biological analogy that permits small family grocers to shift their mindset from retail competition to retail coexistence and to re-examine their own inherent advantages to serve the heterogeneous demand of consumers.

Salient environmental attributes and their value for small independent grocers

“…This is generally expected since past studies have found communion-oriented people with whom friendship can be easily developed to be more likable (Wortman and Wood, 2011). Particularly, the small independent grocer context may privilege consumers’ direct perception of the storeowner without the interference of an organisational image (Srichookiat and Jindabot, 2017).…”

“…In the service triangle, the customers are likely to expect the employees' performance based on the promises communicated by the organisation's marketing activities such as advertising and other promotional activities (Bitner, 1995). This expectation is different in the context of small independent retailers because customer attitude towards the storeowner is not influenced by the organisational promises (Srichookiat and Jindabot, 2017). In contrast, customers have a greater opportunity to interact with the same storeowner and that naturally accommodates the establishment of a service relationship.…”

“…Particularly in the food retailing sector of developing countries, small local retailers experienced a greater impact because of the more rapid expansion of modern retailers than that which occurred in the USA and Western Europe (Reardon and Hopkins, 2006). The small local retailer is characterised as a single or double unit shop house (approximately 500-1,000 square feet) operated by the store owner, which purveys fast-moving consumer goods in an unorganised environment (Srichookiat and Jindabot, 2017). Some researchers have referred to them as unorganised retailers in contrast to organised chain retailers (Ramakrishnan, 2010).…”

“…The area most investigated was the strategies adopted by small retailers, about which there were 49 studies categorised into seven sub-strategies consisting of competitive advantage ( n = 17), promotion ( n = 8), planning ( n = 8), location ( n = 3), technology adoption ( n = 3), pricing ( n = 2) and miscellaneous ( n = 8). Another 20 studies beyond those traced by Runyan and Droge (2008) have since been conducted and were reviewed in connection with the present paper out of which 11 consider small retailer strategies consisting of competitive advantage ( n = 9) (Armstrong, 2012; Coca-Stefaniak et al , 2010; Goodman and Remaud, 2015; Grimmer et al , 2015; McGuinness and Hutchinson, 2013; Mutebi and Ansari, 2008; Quinn et al , 2013; Ramakrishnan, 2010; Srichookiat and Jindabot, 2017), location strategies ( n = 1) (Litz and Rajaguru, 2008), and planning strategies ( n = 1) (Praharsi et al , 2014). The extant literature shows that competitive advantage studies still dominate research into small retailer strategies.…”

Exploring social media usage as a communication channel among independent food retailer SMEs in South Africa

“…This facilitates direct contact between the owner and customer, which promotes relationship building. Small retailers can react quickly to changing customer needs (Srichookiat & Jindabot, 2017;Kelso, 2018). The strategic management decisions of small businesses are to a large degree dictated by the market.…”