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Big box stores vs small retailers: When is shopping local better?

Especially around this time of year, it’s important to shop smart. Whether you’re buying in bulk for holiday gatherings, prepping extended staycations, crossing items off your gift list, or planning in advance for those essential Black Friday pickups, now is the time to think twice about where you’re buying what. 

When planning out the holidays, a wise shopper considers several factors: customer service, price, and environment are the most important for many. And for a lot of those big-ticket or big-household items, a so-called “big box retailer” like Walmart or Costco might be your go-to this time of year. 

While the shiny, gigantic Target that just opened not-too-far away can stock an impressively varied grocery list, in many cases your neighborhood mom and pop stores sell the same things, often at competitive prices.  

Kasasa® believes in shopping local (and banking local, too!). We believe that when you spend local, support local, and bank local, you create a virtuous ecosystem that allows mom and pops around the country to thrive in the face of goliath competition. 

But depending on your personal situation, there are also some benefits that come with big box shopping. 

So that leaves the question: Is shopping big box really worth it? When, and in what situations? When is shopping local the smarter, better choice? Here’s our quick guide to when to shop at big box stores vs when to shop locally at small retailers.

 

What is a big box store?

Let’s start with a basic big box retailer definition. You already know what it is, most likely. A big box retailer is a brick-and-mortar retail space that focuses on scale and quantity. They are huge and they seem to carry everything. Big box retailers deal in volume: a wide variety of merchandise distributed in bulk, with a distribution system that includes hundreds (if not thousands) of individual stores across the country and internationally. And they all look the same. Like... big boxes. Hence the name. 

This massive footprint allows big box stores to leverage what are called economies of scale to lower their profit margins, and thus lower the cost paid by the shopper at the end of the chain. 

You don’t need an economics degree to understand why big box retailers work well for a lot of people. They come in different types, but most are 50,000 square feet or more. Big box retail was pioneered by the original warehouse stores like Sam's Club, Costco, and BJ's Wholesale Club. Some are more specialized, like Home Depot for home renovation, or IKEA for slightly easier DIY home projects. Walmart has evolved into a big box retail space, especially with its super-sized Walmart Supercenter spinoff chain. 

One thing big box retailers have in common is a tendency to offer broad product mixes — whether that means a new coffee table and a plate of Swedish meatballs, or four dozen eggs, an office chair, and a hot dog on the way out. A box store or superstore is a one-stop retail shop that is often able to offer low prices on certain bulk items.

 

Big box vs small retailers

There’s no equivalent, one-size-fits-all name for small retailers. They’re all the small businesses that aren’t big box — the small businesses big box retailers are actively trying to displace, actually. They go by many names: mom and pop, bodega, mini-mart, co-op, "that hardware store that weirdly has really good breakfast sandwiches.” Many small businesses only have one store, or only pop up at certain farmers markets and neighborhood fairs. 

Bust out your big box shopping list, and chances are there are neighborhood nooks selling most of the same stock that have been there so long, you’ve forgotten about them. Big box stores have gobbled up a big chunk of the market share, but shopping local at your neighborhood small business is not only possible — it has the immediate benefit of keeping your money local, and contributing to a robust local economy.

 

What about Ecommerce?

Ecommerce is the elephant in the room when comparing big box stores vs small, local mom and pops. Amazon, to use the obvious example, has transformed from an online place to buy books that threatened to put chain bookstores out of business, into a multinational behemoth in direct competition with Walmart. Online shopping has become an essential pandemic reality for many people, and services like Amazon Prime have evolved rapidly to serve this need. 

In some ways, Amazon has a similar real estate footprint as the big box retailers, with its own warehouses and delivery fleets, its own chain store in Whole Foods, its own price-deflating tactics, and its own economies of scale. (Not to mention the web infrastructure that processes all those Prime Day and Cyber Monday sales!) 

In terms of comparing big box and local retailers, big ecommerce companies and online shopping hubs are generally positioning themselves as an alternative to the entrenched big box chains. They do sometimes offer online services to mom and pops, like order fulfillment, but usually by cutting into the vendor’s already thin profit line. They may help local businesses in the short run, but the long-term trend is to replace them.

 

Is shopping big box really worth it?

So, what are the advantages of shopping in a big box store? 

Big box stores are convenient! You can hardly throw a rock in any American city without hitting one. Their scale and vice-like grip on their supply chains means they can offer savings and great values, especially for big families. This is what they’re known for. 

Big box stores are cheaper? Well, sometimes. They’re businesses, so they are also looking for ways to make a profit. One common tactic at box stores is to get you in the room with a deeply discounted, big-ticket item. Around this time of year, high-end electronics or other potential gift items are a common choice. But then, once you’re in the (massive!) store, you can’t help but cruise by row after row of carefully curated merchandise. While big box retailers do squeeze profit margins and offer lower prices a lot of the time, not everything they have is the cheapest option. 

Does buying in bulk really save you money? It depends on you. If you’re in a small household of one or two people, it can sometimes backfire. And even people shopping for a big crew can sometimes pick up things they end up regretting later. Ever thrown away a lot of dried cranberries you swore you’d put in every salad and smoothie? Or accidentally bought two of the mega-sized bag of frozen dumplings when you were hangry-browsing the aisles? 

The fact is, it’s very easy to follow the siren song of low prices toward unnecessary purchases. And if you end up throwing away some of that bulk, you probably didn’t save any money in the end. The holidays are prime time to overdo it, so plan ahead and shop smart!

 

When to shop local

A lot of us shop big box because we’re creatures of habit. But chances are there is a thriving, entirely local small business network that you can plug into as an alternative. Shopping local is a cornerstone of establishing a vibrant local economy, and the holidays offer you plenty of opportunities to support locally owned businesses. 

Though some of the big box stores proudly display their happy greeters in national ads, we’ll go out on a limb and say that you will get much better customer service, and have an overall much more satisfying customer experience, by going with a small business over a big box. Keep an eye out for “Small Business Saturday” events in your area, or local farmers markets and makers fairs. Your long-overlooked corner store might have a pop-up Black Friday market. Independent businesses can offer a lot of upsides in terms of community building that big box retailers simply don’t have the same interest in supporting. 

Data from last holiday season also show that a huge percentage of shoppers — 93% — felt safer shopping at small businesses instead of big box stores.  

In a nutshell: It makes sense to shop local more often than you think. Shopping local keep your dollars in the community and contributes to a thriving local economy. In the same way, banking local is a boost to the community financial institutions that make up your area’s economic lifeblood. If you want to get in on this virtuous cycle of sustainable banking, check out Kasasa's suite of best-in-class loans and checking products, powered by community banks and credit unions nationwide!

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