Effects of Waltermart Supermarket on Small Retail Business

This study assessed the effects of Waltermart Supermarket on small retail businesses in Candelaria, Quezon, Philippines. Using the adapted questionnaire from Cantuba (2015), retailers assessed the effects of Waltermart on their sales and revenue, product movement, and customer attraction and retention using the 5-scale Likert style. The adapted questionnaire from Lee (2008) was also used to assess the strategic response of the retailers to maintain sustainable operation using marketing practices, merchandising practices, customer service practices, and business operation practices using 5-scale Likert style. A total of sixty registered retailers were used as the sample. Findings revealed that retailers are moderately affected by the presence of Waltermart with ‘customer attraction and retention’ ranked the highest, and ‘sales and revenue’ as the lowest. In terms of strategic practices used by retailers to maintain sustainable operation in the presence of Waltermart, findings revealed that ‘business operation practices’ ranked the highest, and ‘merchandising practices’ as the lowest. For this, retailers need to continue an effective business operation and enhance the quality, competitiveness, and availability of the product through good inventory quality control management. As the study offers an assessment of the effects of Waltermart on retailers, the results suggest an in-depth analysis of the impact of supermarkets on the retailer’s performance through financial ratios.


Introduction
The establishment of supermarkets in rural areas like towns increases economic activity and local employment. Supermarkets impose a need for human labor, an investment that consequently turns into consumption and spending which are the key stimulators that boost development and progress in a local economy. With its numerous amenities offered like airconditioned buildings, specious selling areas and parking spaces, cleaning and sanitation practices, proper food and product handling, convenience and accessibility, and others are the qualities of the supermarket that attract customers.
According to Vinodini (2016), shopping becomes a vital part of all individuals' everyday life. Most buyers nowadays have a lot of buying options like online shopping, local wholesale markets, shopping malls, and supermarkets that offer beautifully decorated and well-organized facilities. Other positive contributions of supermarkets to customers are quality products, safety, and hygiene. Supermarkets also tend to have a good service compared with unorganized and informal markets, store staffs are neatly dressed, polite, attentive, and passionate with work and customers. It also offers a wide range selection of products and considers to be a "one-stop-shop" for all daily needs products.
Although supermarkets in rural areas elevate the society and economy, these supermarkets also create threats to small retail businesses within the vicinity. According to Mathenjwa (2010) and Migdadi and Abdel-Rahman (2020), there is a relationship between the distances of small retailers and the percentage decline in terms of turnover and profit. For instance, Mathenjwa (2010) fount that businesses operating less than 1 kilometer from a supermarket or mall reported a decline in turnover and profit with 80% and 75%, respectively, while businesses that operate 5 kilometers away reported a decline of only 30% and 36% in terms of turnover and profitability, respectively. In short, the research findings indicate that the small businesses operating closer to a large retailer or supermarket are most likely to be negatively affected compared to those small businesses whose area of operation is farther from the supermarket. Similarly, Migdadi and Abdel-Rahman (2020) examined the effects of Carrefour, Safeway, and C-Town on various retail stores in Jordan and found that the impact of retail stores location dimensions was moderate to low in two cases, and low in one case. This LQGLFDWHV WKDW ORFDWLQJ VWRUH ¶V EUDQFKHV LQ KLJK DFFHVV YLVLEOH DQG DWWUDFWLYH ORFDWLRQ KDYH ORZ WR moderate servicescape quality.
Congruent with the previous studies, this study assessed the effects of the supermarket on small retail businesses in Candelaria, Quezon, Philippines. With the absence of studies conducted within the area, the study provides initial solution for the small retailers to minimize the adverse effect of the existence of Walter Mart Supermarket. This provides fundamental data for provincial areas targeted by urbanization through establishments of malls, hypermarkets or similar large-scale chain stores.

Food Retail Industry in the Philippines
Republic Act 8762, also known as the Retail Trade Liberalization Act of 2000 governs the retail trade business in the country. Modern food retailing businesses, such as supermarkets become an essential part of the everyday lives of the people, especially those residing in the urban areas. Since 1997, the retail industry plays a significant role in boosting the Philippine   In this regard, it can be inferred that the food retail sector in the country is dominated by large food retailers such as supermarkets and hypermarkets.

Role of Retailing
According to Mathenjwa (2010 ³the retail industry is the last link in the marketing channel from the producer to wholesaler´ ,Q WKLV UHJDUG the retailers play a vital role as market intermediaries between manufacturers and consumers. As supported by Tustin (2004), retailer acts as agents between the manufacturer and consumer using informing the party concerned of what is there offered and what are the demands of consumers.
The inception of the retail industry has been the underlying cause of growth within the economy. Numerous forms of retailing have been developed over time. For instance, the creation of supermarkets in the 1930s was a successful movement in the field of business and finance.

Expansion of Large Retailers
To sustain their growth, large companies move towards different places as part of their strategy to further expand their operation. Lighthelm (2012) mentions that the retail industry serves as a catalyst in which it provides economic boosts and social welfare. With different types of businesses being established almost anywhere, it provides people with a wide range of choices. However, a recent study was conducted with the goal of developing a retail strategy for Soweto indicating the need to improve the retail choices of the people along with the services it provides within downtown areas (Makhitha, 2016). Hlengani (2007) (Hlengani, 2007). Consequently, it affects the small retail businesses around its vicinity with the heightened market competition. It is for this reason that the current study focuses on the effect of large retailers on small retailers and the response of these small businesses thereof.

Effects of Retail Development in Emerging Markets
Lighthelm (2012) worked with a study that investigated the impact of shopping mall existence on existing small informal retailers in the Soshaguve Township. The study revealed that there was a relationship between the distances of small retailers from the shopping mall and argued that effective customer service might be the key to survival in the prevailing market competition with large competitors.
Accordingly, a tabulation of results is hereby presented, as cited in the study of Mathenjwa (2010) derived from a previous study by Lighthelm (2012) on the relationship between the distances of small retailers in Soshanguve and the percentage decline in terms of turnover and profit. From the given data in table 3, it can be derived that indeed, distance affects the business activity of small retailers. As shown, businesses that operate less than 1 kilometer from a supermarket or mall reported a decline in turnover and profit with 80% and 75% respectively, while businesses that operate 5 km away reported a decline of only 30% and 36% in terms of turnover and profitability, respectively. In short, the research findings indicate that the small businesses operating closer to a large retailer or supermarket are most likely to be negatively affected compared to those small businesses whose area of operation is farther from the supermarket.
The present research is similar to this study but extends further by looking at the response of the small retailers in examining the effect brought upon the existence of Waltermart Supermarket. Mathenjwa (2010) as cited by Ikadeh and Cloete (2020) conducted a study that assessed the impact of large formal retailers by means of collecting data from small retailers. The study surveyed 222 small retailers in five rural Nebraska communities in which Wal-Mart stores had opened. The study discovered 72 percent affected by Wal-Mart, 53 percent suffered a negative consequence, while only 19 percent enjoyed positive effects. Of those retailers negatively affected, 22 percent experienced a decline in revenues of less than 10 percent during the 12 months, over 30 percent claimed declined more than 10 percent, while only 1 percent indicated increased by less than 10 percent. Mcgee (1996) examined how small businesses adapt to the environment after the market entry of a big retailing competitor and found that most VPDOO UHWDLOHUV ¶ SHUFHSWLRQ RI WKH H[LVWHQFH of large retailing companies has an adverse impact on their business operations. Accordingly, half of the respondents revealed a decrease in their sales and profit due to the existence of a huge competitor. All these ideas point out to emphasize the negative impact felt by small retailers due to the entrance of large retailers into the market. However, one should not set aside the positive impacts of retail development.
The following studies shed light on some of the positive impacts; although it applies directly towards consumers and resident communities. For instance, Guy and Bennison (2002) found evidence that establishing a superstore brings substantial benefits to consumers, mainly a wider range of products and lower prices. Moreover, due to its environment, it attracts buyers which in turn increases expenditure that stimulates development and progress in any local economy. Similarly, Mitchell and Kirkup (2003) state that retail development is a pivotal HOHPHQW WKDW UHYLYHV VRPH DUHDV WKDW ZHUH OHIW EHKLQG LQ 8. ¶V WRZQV DQG FLWLHV ,Q WKHLU VWXG\ they argued that the establishment of retail stores provides a new social network and helps contribute to lowering the crime rate and provides a safer environment. Another good point to note is that retail development provides wealth to the community and to its people by means of wages and business contribution.
Mclntosh (2002) has a different view on modern supermarket development, which it provides improvement to landscaping and how other people perceived the area. Furthermore, Mclntosh (2002) as cited by Mathenjwa (2010) observes that that increased supermarket competition arising from new retail development within disadvantaged urban areas can lead to a reduction in the real price of food. While small retail businesses primarily offer food items, they PD\ QRW EH DEOH WR NHHS XS ZLWK WKH SULFHV ZKLFK LQ WXUQ JUHDWO\ WKUHDWHQV RQH ¶V VXUYLYDO ,Q WKLV regard, they may be forced to close their businesses when they are no longer making profits.
With the gathered literature and studies, it is considered evident enough that the continued presence of large retail formats such as shopping centers and supermarkets has an impact on the retailing dynamics in emerging markets. Although there is a lot of evidence that draws a connection between retail development and its effect on small businesses, its effect is not adequately documented. An understanding of the effects of retail competition from large retailers on small retailers is not complete without an assessment of the response of these small retailers to this competition. The following section will deal with the response of small retailers to competition from large retailers.

The Response of Small Retailers to Competition from Large Retailers
According to Peterson and McGee (2000), small retailer needs marketing strategies in order to reduce the pressure imposed by the existence of large retail businesses. These marketing strategies involved, but are not limited to increasing promotional efforts, adding or diversifying products, and pruning products. However, small retailers strongly do not encourage small retailers in lowering their prices as a response to the market competition with a large retail business. As opposed to the idea of implementing marketing strategies in order to mitigate the market competition, McGee and Festervand (1996) does not support these prescriptions. In his study, he collected data pertaining to the responses of rural towns in the US on the existence of Wal-Mart and how these small retailers adjusted their strategy. Interestingly, the result of the study yielded that neither group made any marketing adjustments nor adjust their strategy.
In connection to the above study, Peterson & McGee (2000)  The large retail business's primary weapon in competing in the market is through low pricing of products and offering discounts. As contested by Taylor and Archer (1996) in their study, it is difficult to match this strategy most especially by small retailers. Covin and Covin (1990) suggest that instead of competing directly, small retailers may take actions such as improving customer service and/or product specialization or customization. In addition, Stone   The relationship of variables as used in the study of Mathenjwa (2010) Based on the study of Mathenjwa (2010), the study presented a model that focuses on the impact of competition from large retailers on small retailers and the response of these businesses to the competitive pressures at the market. The response of these small retailers is simulated by the impact of the large retailers (see figure 1).

Figure 2
The relationship of variables as used in the study of Cantuba, et.al (2015) In addition, a local study conducted by Cantuba et al. (2015) presented a model that relates to the impact of mall establishment on micro-business enterprises as a basis for business continuity (see figure 2).

Conceptual Framework for a Sustainable Operation of Small Retail Business
This study develops a framework as shown in figure  business operation employed by the retailers to maintain a sustainable operation.

Methodology
The study employed the descriptive method of research. As a widely accepted method, the descriptive method of research is a fact-finding study that involves adequate and accurate interpretation of data. It is used to gather information regarding the effects of Waltermart Supermarket on small retail businesses in Candelaria, Quezon, Philippines.

Sample Design Map
A total of sixty (60) registered multitudes of retailers that were most likely affected by the presence of Waltermart Supermarket were used as the sample. The sampling design map (see figure 4) was used as a guide to determine the number of respondents per given distance.
Accordingly, the farther the location of small retailers, the little the number of respondents to be gathered from that location or area, inversely, the near the location of small retailers to Waltermart Supermarket, the greater the number of respondents to be gathered from a specific location which covers Malabanban Norte, Poblacion (the town proper) and Pahinga Public Market. The demographic profile of the retailers is presented in the following figures and table.  Number of employees

Figure 8
Years of Operation  The main instrument used for the study is a survey questionnaire that consists of four

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from the Waltermart Supermarket. The third part of the instrument was adapted from the questionnaire of Cantuba et al. (2015) that pertains to the effects of Waltermart Supermarket on small retailers. The fourth and last part of the instrument was adapted from Lee et al. (2008) that pertains to the strategies used by the small retailers to sustain their operation and survive the competition imposed by larger retailers.
The researcher distributed and retrieved the instrument. Data were interpreted and analyzed by means of frequency, percentage, mean, and analysis of variance.       The last part of the survey questionnaire is about the different strategies and practices employed by small retailers to maintain sustainable operation in terms of (a) marketing practices, (b) merchandising practices, (c) customer service practices, and (d) business operation practices.

Conclusion
This study assessed the effects of Waltermart Supermarket on small retail businesses in Candelaria, Quezon, Philippines. Using the adapted questionnaire from Cantuba et al. (2015), retailers assessed the effects of Waltermart Supermarket on their sales and revenue, product movement, and customer attraction and retention using a 5-scale Likert style. The adapted questionnaire from Lee et al. (2008) assessed the strategic response and practices used by small retailers to maintain sustainable operation using marketing practices, merchandising practices, customer service practices, and business operation practices using 5-scale Likert style. The sampling design map was used as a guide to determine the number of respondents per given area.
Accordingly, the farther the location of the small retailers, the lesser the number of respondents from that area, inversely, greater number of respondents will be assigned to the location or area nearest to Waltermart Supermarket. A total of sixty (60) registered multitudes of retailers that were most likely affected by the presence of Waltermart were used as the sample, thirty (30) of these were from Malabanban Norte, twenty (20) from Poblacion, and ten (10) from Pahinga

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Malabanban Norte were high school graduates, while most of the managers and owners from Poblacion and Pahinga Public Market were college graduates. As to the nature of the business, findings revealed that meat shops dominate the Malabanban Norte and Pahinga Public Market area, while most of the retailers in Poblacion were engaged in grocery stores. Employers also prefer to have one (1) to four (4) employees, and as to years in operation, it is noticeable that the retailers in Pahinga Public Market have the longest years in operation with an equal percentage of six (6) to ten (10) years, and above sixteen (16) years in operation.
When it comes to the effects of Waltermart Supermarket, findings revealed that retailers are moderately affected by the presence of Waltermart Supermarket on customer attraction and retention (3.22), product movement (3.03) and sales and revenue (2.99). In terms of strategic practicHV XVHG ILQGLQJV UHYHDOHG WKDW µEXVLQHVV RSHUDWLRQ SUDFWLFHV ¶ DV D SULPDU\ VWUDWHJLF response to maintain sustainable operation (94.67%), followed by marketing practices (87.33%),

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For this, retailers need to continue an effective business operation practice and enhance the quality, competitiveness, and availability of the product through good inventory quality control management. Business owners and managers also need to re-design and re-organize the store and maintain cleanliness with proper ventilation to uphold the integrity of the store and increase convenience for the customers. Small retailers can also offer competitive prices by reducing operational costs through monitoring and controlling. Selling bundle products, offering