Big Business Takes it All

When small grocers want to stock up on inventory, it used to be a matter of a few simple phone calls. Now, global supply chain issues have created new challenges. Consumers bought more than ever during the pandemic, while at the same time, keeping essential workers on the job became more difficult and supply lines that once ran smoothly began to see delays. Worst of all, inflation has caused prices on everything from products to shipping to dramatically rise.

Supply problems have had a disproportionately large negative impact on small businesses. Restaurants, independent grocers, bookstores and toy shops have all struggled to maintain inventory. Meanwhile, large retailers like Walmart and Amazon have pressed their advantage. These giants have expanded their port services and used their leverage to make deals, keeping the supply lines flowing. This has turned even more consumers away from small and local businesses and into the waiting arms of the big box giants. Small business struggle to compete more than ever, and many are going under.

This in turn means even less competition for the giants. They may be scoring big, but local communities are the real losers. When local dollars leave the community to flow to Walmart and Amazon, they don't return to keep the neighborhood economies alive. The result is "draining the life out of local communities" which creates "a kind of despair" (Adams, 2022).

Giant players like Walmart, Home Depot and Dollar tree have commissioned container ships, rented more space at the seaports and created "pop-up" container yards to handle the extra business. And Amazon has been building their own container ships since 2018, avoiding the higher shipping costs and padding their bottom line even more.

Even independent businesses who would like to make the transition to online sales have to do so through Amazon to have a hope of reaching large markets. Additionally, Amazon and Walmart put pressure on their suppliers to keep prices low, so when their expenses go up, they are forced to increase prices for smaller customers who don't have that kind of bargaining power. Manufacturers are likewise changing the way they do business to focus on deals with the giants, for example by dramatically increasing the lot size which must be purchased at once, or the requirements for yearly sales volume.

This may soon mean the end of mom-and-pop shops altogether. And that eventually means trouble for smaller communities. When locally owned businesses disappear, they don't return.