Since the advent of 20th century, we have seen a number of prominent supermarket brands dominating the retail market. With the expansion of such brands to tier-1 and tier-2 cities many people believe that, it can lead to the closure of many local business' and, ultimately lead to the end of local communities. I agree with this argument, and in this essay I will put forth my views with supporting examples.
There are a lot of people who believe that, large supermarkets can increase competition in a region, and this will mean consumers will have a better choice of products at reasonable rates. This is because big supermarket brands buy products in bulk from the suppliers and play the volume game, unlike the local mom and pop stores. Due to this reason they are able to keep the price low and pass on the benefits to the customer. For example, it has been estimated that, Walmart buys close to 200 tonnes of diary products each year, such large volume purchase helps them keep the prices at least 20% lower than their local competition.
However, it is a well know fact that, with the entry of large volume retail players like Walmart many of the small business in local communities are not able to compete and going bankrupt. This is because, some of these mom and pop stores cannot bring down the margins on products like their competition, since it will affect their business. For example, based on the research conducted by a leading consulting firm it's been found that once Walmart starts operation in a town, 50% of the local business close down in the region within one year. Such closures have an adverse effect on local communities in terms of loss of livelihood and jobs
To sum up, I believe, local players in smaller markets will not be able to sustain the business due to competition from larger players, and this ultimately lead to destruction of local communities.
Since the advent of 20th century, we have
seen
a number of prominent supermarket brands dominating the retail market. With the expansion of such brands to tier-1 and tier-2 cities
many
people
believe that, it can lead to the closure of
many
local
business' and,
ultimately
lead to the
end
of
local
communities
. I
agree
with this argument, and in this essay I will put forth my views with supporting examples.
There are
a lot of
people
who believe that, large supermarkets can increase competition in a region, and this will mean consumers will have a better choice of
products
at reasonable rates. This is
because
big
supermarket brands
buy
products
in bulk from the suppliers and play the volume game, unlike the
local
mom and pop
stores. Due to this reason they are able to
keep
the price low and pass on the benefits to the customer.
For example
, it has
been estimated
that, Walmart
buys
close to 200 tonnes of diary
products
each year, such large volume
purchase
helps
them
keep
the prices at least 20% lower than their
local
competition.
However
, it is a
well know
fact that, with the entry of large volume retail players like Walmart
many
of the
small
business
in
local
communities
are not able to compete and going bankrupt. This is
because
,
some
of these
mom and pop
stores cannot bring down the margins on
products
like their competition, since it will affect their
business
.
For example
, based on the research conducted by a leading consulting firm it's
been found
that once Walmart
starts
operation in a town, 50% of the
local
business
close down in the region within one year. Such closures have an adverse effect on
local
communities
in terms of loss of livelihood and
jobs
To sum up, I believe,
local
players in smaller markets will not be able to sustain the
business
due to competition from larger players, and this
ultimately
lead to destruction of
local
communities
.