I went to the local pool-supply store this weekend to buy chemicals for our hot tub, and, unlike two years ago, it was closed, and only open on weekdays.
I went back on Wednesday and asked why they were closed. The owner replied, “When everybody and their uncle started selling chemicals, it didn’t pay us to be open on weekends anymore.”
Most of their pool- and spa-servicing business is on weekdays. But until recently the store could still cover the variable cost of remaining open on weekends, because customers, most of whom work and couldn’t come by during weekdays, would buy pool supplies on Saturdays. With the competition from Home Depot and others, the store can’t cover the variable costs of remaining open on Saturdays, so it closes. The firm shuts down in the very short run, but it remains open on weekdays, when there is enough business to cover variable costs; and, as my purchases show, they also sell a few chemicals then too.
This would seem to be a fairly common response of small businesses when larger retailers begin to offer a non-specialized competing good.
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Except in instances where Wal-mart is significantly cheaper, I prefer to give my business to the small town folks who are just trying to make a living instead of take over the world.
But the real problem, I think, is not price!
People go to Home Depot rather than the pool supply store NOT because it is so much cheaper, but because it is more CONVENIENT to go to a one-stop-shopping center than to first go to the pool supply store, then to the local plant nursery, then to the local hardware store, and so on.
I have wondered why so many businesses, instead of paying separate leases, separate insurance, separate utilitiy bills, etc., don’t lease one large building and make a sort of “mall” out of it. That way, each business pays a percentage of the cost, gets more traffic (since when people come in for pool chemicals, they also pass the hardware store, etc.), and has less expenses.
At least that’s MY way of solving it.
Now if I could just get churches to figure out that it’s much wiser to work together than to all have separate buildings, bills, staffs, and so forth. Yeah, like that’ll ever happen!
“Now if I could just get churches to figure out that it’s much wiser to work together than to all have separate buildings, bills, staffs, and so forth. Yeah, like that’ll ever happen!”
The church I attend (in Regina, Saskatchewan) has 3 different protestant congregations sharing a facility
AaronS, have you been watching Night at the Roxbury? If yes, I will gladly open a fake flower / lamp store with you.
That they closed on weekends rather than weekdays suggests that most of their business is from contractors, not a random homeowner.
@AaronS
I’ve seen such cooperation, coincidentally, in malls. Two stores will share a space with a dividing wall (though with openings you can walk through), getting shoppers to step into two stores when they may only really need to go to one.
What I’ve wondered about is why the local motorcycle store was always closed on Mondays. I would usually try to go there after a long weekend of riding when I would need to buy something for the bike (chain lube or oil or whatever). Mondays seem like a logical day to go in there to me.
Thank goodness you mentioned variable costs! As a manager and entrepreneur I get so tired of even relatively intelligent people making staements about how mine or others business should operate when they have no clue what the numbers behind the decisions are. I realize most people shouldn’t be expected to know, but it drives me nuts to hear even college business professors scoff at operating practices when the break-even analysis says you just can’t. (Or must).
A guy I know owns a shop on one of the main thoroughfares in Vancouver. He sells knives and swords, but not any old pieces of cutlery: He sells high end stuff. A $400 knife is not unusual in his shop.
He tells me that he had an increase in business each month for the last 16 months. “Recession? What recession?”
Last time I went to see him he shut his shop with the exception of Fridays and Saturdays. The reason is not a large store competing but the Internet: He started selling on-line and that became rapidly the main part of his overall business. The time demands were such that he was unable to do both the counter and on-line sales.
I won’t name the phone company, but in 1990 I was working for a major phone company that had retail stores in the area. Since I had an employee discount I went there to buy a phone. The doors were locked. Turns out they were open 10 am – 5 pm Monday through Thursday and closed at 3 on Fridays. No Saturday or Sunday hours. I was never able to get over there during business hours.