The plight of bodegas in New York City is not unlike the battles that other small business owners face from competition by larger companies. These small, local grocery stores provide convenience in the city that never sleeps. You can get a cup of coffee, lottery tickets, bananas or beer at almost any hour, thanks to their hard working owners, who are often immigrants.

Bodegas are declining, according to a New York Times report. They are being driven out by ever escalating rents and increased competition from supermarket and drug store chains. The cozy neighborhood stores often cannot afford to compete with the wide selection of often similar items.

Chain stores offer consumers better prices based on their high volume purchases, predictable inventory, and usually bright displays. The smallest stores often fall victim to large competitors that come into town. We have seen this in the hardware business when Home Depot or Lowe’s enter the market. Stores such as Target and Wal*Mart, which have superior purchasing power and offer cheap prices, now compete directly as quasi-supermarkets. The Barnes and Noble chain and Amazon.com put 1,000 independent book stores out of business between 2000 and 2007, according to Slate.

Here are some tips to help David fight Goliath:

Be Creative

When Amy Boroff opened Be Craftful, unique toy and gift store in Fanwood, New Jersey, her hope was that customers would support a local retailer even if they paid a little bit more. The reality was that they still shopped at a retail chain, such as Michael’s, which offers arts and crafts products. Naturally, Boroff could not compete with the price and selection.

“We stopped carrying a lot of retail inventory. You can go to Target and buy something for $20,” said Boroff. “So we got creative, we put together customizable packages at a similar price point.”

The entrepreneur began to see herself less of a toy store and more of a destination for birthday parties. The tactic worked as customization and positive word-of-mouth helped bring business to a much higher level. Additionally, Boroff branched out to accept field trips from local schools and began offering arts enrichment classes at the local JCC. Further, she started ladies BYOB nights offering painting classes for adults.

“I originally planned Be Craftful as a toy store for kids. I had no idea we’d have such an adult market,” she explained. “At first we offered the painting and craft nights once a month. Now, we do them several nights a week.”

This change meant changing the store’s hours opening later in the morning and then staying open later at night, but the strategy is working.

Improve Service

Try looking for knowledgeable help at a big box store’s lawn and garden section. It’s hard to find someone who really knows what types of plants thrive in partial sunlight and how high and wide a particular bush will grow. Local gardening centers often have that type of information. Often, the workers are plant lovers who have been on the job for years. They get a thrill by making a recommendation that will make a home owner happy in the long term. Box store employees typically do not have that type of mindset. Their service often is more transactional, in part, because of the sheer volume of customers on a daily basis.

The 1980s classic TV show Cheers looked at life at a Boston bar where “everybody knows your name.” Customers love being recognized, and good business owners should strive to be on a first name basis and develop relationships with them.

Give Back

Companies indeed do well when they “do good.” Giving back to the community — whether it is sponsoring a local softball team or little league or giving 10 percent of sales to breast cancer initiatives — is an excellent way to promote goodwill. Foley’s NY Pub & Restaurant has supported numerous causes, including suicide prevention and prostate cancer awareness, and has invited celebrity guest bartenders to help raise money for the charities. Owner Shaun Clancy has carved out a niche on a very competitive block filled with bars and restaurants across the street from the Empire State Building in New York.

Big guys are always going to want to put the little guys out of business. It can be a challenge because large companies have price advantages and synergies against which smaller firms cannot compete. By being creative, improving customer service, and building goodwill, entrepreneurs can indeed thrive in the marketplace against bigger, but less nimble, competitors.

Published on: Aug 5, 2015