Surviving National Retailers (Walmart, Sam’s, Costco)

Yesterday, in our online class: Surviving Amazon, we talked about how to compete in business against the retail giant. In today’s blog, we’ll give you more tips on how to survive against other giant box stores like Walmart, Sam’s Club, or Costco.

As a small business owner going up against a giant retailer, the odds of surviving may seem daunting especially while trying to grow a thriving company when they move into your town. To win you must be clever and find your niche. After all, with a little rock David took down a giant.


How can I compete against national retailers like Walmart, Sam’s, or Costco?

Going head-to-head in a pricing competition with identical if not similar products rarely works in favor of the small business owner. The purchasing power of big retail stores allow them to buy goods cheaper and undercut smaller companies by controlling the product and pricing. To beat the odds, think more about what your company does well and less about the pressures of the competition.


Studying the big box stores for weaknesses can help you find your strengths:

  • Use this comparison to your advantage: For Stephanie, who owns a successful clothing boutique, it was not about offering a cheaper blouse in different colors but sourcing a well-loved local designer and collaborating on a unique clothing collection unavailable to big retail.

Up your service game:

  • If you’ve shopped at the large retail stores, it is easy to wander aisle to aisle and not find what you are looking for, let alone someone to help you locate that obscure little thingamajig with two prongs and a yellow knob. Often, a great shopping experience is about ease, convenience, and a friendly face to help as needed. As Jenny, the design showroom owner found, small things count. Her colorful, well-designed shopping environment, filled with flowers, brought clients in. Fresh cookies and a bottle of special tea to snack on, keeps them coming back.

Specialize by finding your niche:

  • When the big box stores offer nearly everything under the sun, sometimes you must lift a rock or two to discover what they cannot provide. Think of it as the fine art of competing against the bigger stores. Like an artist creating a painting, each creation is one of a kind. That uniqueness when mass produced and sold cheaply loses its value to a more discerning customer. Do more than promote products that sell repeatedly. Be one-of-a-kind with a unique image, specialized marketing, and personalized products. Also, a niche is not always about product, style of service or store merchandising, but catering to a certain type of customer like a contractor, manufacturer, or someone with a unique hobby.


  • Selling loss leaders” is a strategy of promoting a product below its market value. When combined with a secondary product (the leader) a substantial profit can be actualized. In the fast-food industry this is the five-dollar bag of hamburgers with drink and fries’ deal. While the hamburgers are the loss, the fries and drink are highly profitable counterparts of the transaction that make it worthwhile. Promote however you like; with buy two, get the third half price, or buy one, get a baby rattlesnake free…Well, maybe don’t give away baby rattlesnakes. 😉 We are certain you have heard about many good profit-generating promotions. Use them to make a profit overall.


  • People love to be rewarded and if they find value in it, they will continue to come back. Use loyalty cards with discounts or offer cash back rewards when possible. Frequent buyers’ clubs and tier systems where higher discounts are offered when certain dollar amounts are spent, are other good ways to drive loyalty and retain customers.


What advantage does small business have over national retailers?

Of the many advantages small businesses have over national retailers: being a local figure in the community with a name and a face is paramount. Remember, you are more connected with people in your community than you may realize. This is a useful tool for marketing, developing new customers, and growing support.

  • As a small business owner, you know how to best serve your community.
  • Small businesses are the backbone of not just local communities but of the twenty-eight-plus million companies in the U.S., 7% of them are small businesses.
  • Small businesses can make adjustments that larger companies often cannot. Like sourcing locations where rents may be less, shorter leases and less construction costs.
  • The ability to “stay lean” allows for higher profit potential with less overhead.
  • The flexibility to change relatively fast and move with market trends is better realized when you are not heavily invested into stocked items that may be a passing fad. More importantly, creating the next trend is what every big box retailer seeks. Trends are typically discovered by clever, entrepreneurial small business owners.


How can I use “Shop Local” to my advantage?

 Think about the last time you met the CEO or one of the owners of Walmart, Costco or Sam’s. Possibly while fishing you hit one of their yachts or spilled their wine at that fancy restaurant you save months to visit? We didn’t think so. It is rare to meet them, let alone discover what they are truly like as businesspeople or individuals.

As a small business owner, you are empowered to be the local celebrity that everyone feels glad to have met. You are more relatable than what’s his or her name…You know, the CEO of that big box store? Shopping locally is about caring for people in your community.

Build that sling and find that perfect stone to build your business upon. However, instead of trying to bring down a giant retailer, become like the oyster and polish your small business until you develop a valuable pearl.


For additional information on surviving national retailers like Walmart, Sams Club and Costco, or on developing retail strategies to help you succeed, please contact us at the Small Business Development Center – SBDC – Serving Paris area:  Lamar, Hunt, Hopkins, Delta, and Red River counties.