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My friend opened a chinese take out place in a small town in a midwest state (I'm not going to say where) and that town has 1 other chinese take out place, population is very small. anyways he says that there are 3 mom and pop pizza places there, and then a little ceasers pizza place opened there, right next to his resturaunt, and they offer large one topping pizza's for 5 bucks.
The pizza kind of sucks, it has little ingredients, such as less cheese, and less topping quanity. anyways my friend says that it doesnt really affect his business because its 2 different cusines, but it is killing the other 3 mom and pop pizza places that has been there for a while. Sure, opening a little ceasers might help with unemployment for a little bit, but for them being there, it undercuts the other places, and sooner or later the other 3 might have to close.
He told me that a walmart is within 20 mins drive, and the locals there said that mom and pop hardware stores have closed down. the economy there is pretty bad, but he opened there because the rent is really low, and it beats working for someone, he makes about 2000 a month total profit, so he looks at it as a job, getting paid his salary, and he dont have to listen to anyone.
Yes, chains do make it harder for smaller retail business' to survive. The story you tell is not unique. I can think of several exaples from the previous smaller town I lived in.
Main street takes the hit... In fact there were two hardware stores on the main street. They'd send people back and forth to each other all day long. Wal-mart and another regional store both moved it. There is now 1 hardware store on that main street. The second store closed, when the owner wanted to retire.
Then in retail there is the perception that you're saving money at a large store.... Sometimes you do. There are many times when the same item is priced the same or cheaper at the local owned store.
Then there are times when you can't compete on price, and isn't worth competing on price. That forces a small business to switch modes and focus more on service and quality of prouducts and knowledge of a specific area.
As far as little ceasars. In a bind it is nice to have instant food. But the novelity will wear off and then the mom and pop will gain back customers.
As far as little ceasars. In a bind it is nice to have instant food. But the novelity will wear off and then the mom and pop will gain back customers.
I would say thats 60/40, favoring little ceasers. My Friend said that they are super busy everyday, and also people there dont have much jobs, its about 2 hours away from any city. so, pretty much people are poor, and spending 5 bucks on a large pizza to feed 3 people is better than going to a grocery store and spending more to feed the same 3 people. Oh, yea, food prices there are a little higher because its pretty rural.
It costs 10 bucks for a large pizza at the local mom and pops, while its 5 at little ceasers. A regular person there with little money will most likely buy 2 pizzas instead of 1.
I would bet that for the mom and pop pizza stores, their material and electricity for making a large 1 topping pizza would be about 5 bucks already. Its just like mcdonalds, you can get a mcdouble for 1 dollar, but if you bought the bun, 2 patties, cheese, and the electricity to make it, it might cost a dollar already.
as for him, his family owns the little take out place, and the rent is 800 a month, while they live in a small 2 bedroom apt for 400 a month. They dont need to make that much in sales to live simple there, but its really boring.
Seattle, luckily, is one of those places where mom and pop shops thrive still. I hope it stays that way. People here typically loathe chain restaurants, except local chains of course, or limited numbers of national chains.
My friend opened a chinese take out place in a small town in a midwest state (I'm not going to say where) and that town has 1 other chinese take out place, population is very small. anyways he says that there are 3 mom and pop pizza places there, and then a little ceasers pizza place opened there, right next to his resturaunt, and they offer large one topping pizza's for 5 bucks.
The pizza kind of sucks, it has little ingredients, such as less cheese, and less topping quanity. anyways my friend says that it doesnt really affect his business because its 2 different cusines, but it is killing the other 3 mom and pop pizza places that has been there for a while. Sure, opening a little ceasers might help with unemployment for a little bit, but for them being there, it undercuts the other places, and sooner or later the other 3 might have to close.
He told me that a walmart is within 20 mins drive, and the locals there said that mom and pop hardware stores have closed down. the economy there is pretty bad, but he opened there because the rent is really low, and it beats working for someone, he makes about 2000 a month total profit, so he looks at it as a job, getting paid his salary, and he dont have to listen to anyone.
Yes absolutely. LVC marketing and price trounce small business quality. Typically have to create something different from the big boys to compete and expand slowly via world of mouth.
There are other ways as well to market cheaply. Depends on the client demographic being marketed. Social websites. Local paper reviews. Car clubs for people to gather in the parking lot. Preferred customer discounts. Buy 5 and 1 free. Etc. People love freebies and discounts.
In my area the popular small rest. have been around for years as they built a following based on longevity. Sometimes it is convenience in terms of providing food to local patrons.
You know, I'm a person who patronizes locally-owned businesses as much as possible. At the same time, I'm very suspicious of the argument that the Big Box Retailer and National Restaurant Chain is evil insensate.
The problem with small retailers? A lot of the time, they just get downright lazy. They don't put much effort into their own purchasing. They don't market worth squat. And, believe it or not, their customer service is often lacking.
Here's the thing. From the time that a Wal-Mart or a Home Depot begin contemplating a new store, the local merchants have at least 2 years to get their collective acts together. Because the property purchase, the permitting, and the construction will take at least that much time, if not longer. But many of them never do. They just keep doing business the way they've done it since time immemorial and hope customers remain loyal. Hope is not a marketing plan.
So if you can't beat someone on price, you have to beat them on perceived quality. And if you don't address your shortcomings, you're dead. That's competition.
I'll give you an example. One of our local True Value hardware stores was notorious for incredibly rude service. Seriously. When my wife came in with a question, the desk clerk would look at her and say, "Why don't you send your husband instead?" And this went on for years. When the bright, shiny Home Depot opened up down the street, that hardware store's days were numbered. And I didn't shed a tear when it closed.
But other local hardware stores have remained in business. Why? Because you can walk in the door with a digital photo of a plumbing fixture, ask a question about it, and get an intelligent and helpful reply. And if I have to pay an extra 10- to 20% for the answer, then that is worth it to me.
Same thing with a restaurant. If your food is only marginally better than a Papa Johns or a Little Caesar's, then just close your doors right now. And even though your friend is in the Chinese food business, he is still in the take-out business. That means he competes with all those other places for a share of the community's discretionary income. He has to make sure that his voice is heard and what he says is worth hearing.
And also location is key as well. Lots of times these big box stores are located marginally far from customers. Not too far, but you still have to drive. They are not usually present in the downtown mainstreets that lots of people live near . . . . . . .Here in Manhattan, there is a small chain that is basically a mom and pop and sons and daughters that is doing quite well. They have expanded to several location in Uptown Manhattan, and the bronx, in the face of a Home Depot located closeby: one near Yankee Stadium, one around 116th St and FDR, and maybe one or two somewhere in the Bronx. . . . . . . With food it is almost always about locations. Chain restaurants have been around for a long time, and I still see plenty of non-chains around. They can differentiate themselves easier than the retail industry. . . . . . . The website for the hardware store: NHS Hardware
I know a lot of the smaller busineses, esp restaurants around here are gaining popularity and customers by using the coupon sites and groupon to market. I am very glad to see this, as yes the bigboxes can kill the small guys.
I can see why some mom and pop stores have issues with customer service, I have witnessed quite a few. I grew up in boston, and there was a mom and pop pizza place. as kids, we went there to buy fries and eat there, since its cheap, but not cheaper than mcdonalds. anyways when we took too much ketchup, they will have an attitude towards us, and become a smartass because they own that business. we, on the other hand, are kids and still kept on going (shouldnt have) becuase its closeby. If that happened today, I would give them a bad review on yelp and never go back, since im grown up. every single time or every other time when we go there, we get an attitude because we bought the cheapest stuff (fries) and use their ketchup, but im sure they still make some kind of money as their food cost is probably 30%. sometimes we bought drinks and pizza, but that was not as often.
anyways that neighborhood right now, has gone through gentrification, and they closed down. I could care less if they whined about gentrification or the economy or a national chain pizza place taking over (dominoes was close by). they deserved it to say the least. they would of probably not lasted as long if we didnt go, it was close to our homes, and everytime we went there we came with at least 5 people, and we went there every other day or sometimes 2x per day. we went there for YEARS....
I can see why some mom and pop stores have issues with customer service, I have witnessed quite a few. I grew up in boston, and there was a mom and pop pizza place. as kids, we went there to buy fries and eat there, since its cheap, but not cheaper than mcdonalds. anyways when we took too much ketchup, they will have an attitude towards us, and become a smartass because they own that business. we, on the other hand, are kids and still kept on going (shouldnt have) becuase its closeby. If that happened today, I would give them a bad review on yelp and never go back, since im grown up. every single time or every other time when we go there, we get an attitude because we bought the cheapest stuff (fries) and use their ketchup, but im sure they still make some kind of money as their food cost is probably 30%. sometimes we bought drinks and pizza, but that was not as often.
anyways that neighborhood right now, has gone through gentrification, and they closed down. I could care less if they whined about gentrification or the economy or a national chain pizza place taking over (dominoes was close by). they deserved it to say the least. they would of probably not lasted as long if we didnt go, it was close to our homes, and everytime we went there we came with at least 5 people, and we went there every other day or sometimes 2x per day. we went there for YEARS....
Just to provide some context... sometimes the best thing a business can do, if it wants to remain profitable, is to "get rid" of the customers who cost them money. And kids who buy french fries, and take up a table during a busy time, and take too much ketchup? Not necessarily the most profitable customers...
As for your assessment that they probably still made money, since the food cost was probably only 30% of what they charged, you're forgetting payroll, rent on the building, taxes, equipment costs, and many other costs. Running a restaurant is expensive!
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