Data show small, large retailers each have their strengths

After Menards home improvement store opened in 2012, Fred Elias, owner of Elias Ace Hardware in Cape Girardeau, said he noticed a lot of people traveling to the other side of town to shop at the big-box store.

The $8 million, 162,340-square-foot megastore was the largest retailer to open in Cape Girardeau since 2006, when Kohl's and Sears Grand came to town.

Of the 4,700 Ace stores worldwide, more than 4,600 are independently owned and operated by local entrepreneurs like Elias.

About two years after Menards' opening, "the only thing that affects my business is the weather," Elias said. Not only did Ace sell "tons of winter goods" during recent snowy weather, but now that spring is here, tools, paint and fertilizer are flying off the shelves.

However, Elias admits it might have been a different story had Menards opened 10 feet away.

Menards is seen Monday, April 28, 2014 in Cape Girardeau. (Fred Lynch)

"There's only so much of the pie, so many dollars out there," he said. "Somebody is going to lose out. We have not lost out, luckily."

Big business

Big-name stores such as Best Buy, Sam's Club and Sears are important to the local economy because they are not available to everyone, said John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce.

"When you are a regional hub, which we are, for retail, then it's also important to have recognizable names that draw people," he said.

Big businesses drive sales tax revenue and bring in jobs, and the big names are "important as part of the overall picture," Mehner said.

Menards and Academy Sports + Outdoors, a $1.8 million retail development that opened June 28, 2013, each brought about 150 jobs to the city.

Dollar signs

While small businesses make up the majority of Missouri establishments, they do not account for the largest percentage of employees, according to the state Department of Economic Development.

Twenty-eight percent of Missouri workers are employed by medium-sized businesses with 10 to 49 workers, according to the most recent data. Businesses with more than 250 workers also amount to 28 percent of the state's total employment, while businesses with 10 or fewer employees only account for about 13 percent.

Scott Meyer, city manager of Cape Girardeau, said larger stores also offer more choices, more volume and bigger advertising budgets.

The draw of big-name stores brings in people to shop, who also may shop at smaller stores, go out to eat or stay overnight in a hotel, he said.

However, it is a matter of scale. Big-box stores are important because of the sales-tax revenue they bring into the city, but they require a lot of land and more infrastructure, Meyer said.

"It's give and take. I prefer to have both," he said.

Large retailers on the west side of Cape Girardeau, including Menards, Academy Sports + Outdoors, Wal-Mart, Sam's Club, Sears Grand, Lowe's, Kohl's and Target, brought in more than $2.5 million in sales-tax revenue in 2013, according to city data.

Conversely, eight local retailers along Main Street downtown provided less than $50,000 in sales tax revenue during the same period.

Keeping local customers

David Gelsheimer has owned Gelsheimer's Mor For Less Neighborhood Market in Oran, Missouri, for 16 years, and it has been in business since 1964. The store employs 13 people, two of whom are full-time.

He said seeing to customers' needs helps smaller stores such as his survive against much larger competitors.

"The big-box stores just have too much buying power for us to compete with their prices, but price isn't always the important thing," he said.

Gelsheimer's caters large meals for weddings and offers local produce when in season -- things big-box stores don't necessarily do.

"We offer fresh meat and can custom cut to the customer's needs and wants," Gelsheimer said. "That is our biggest draw to customers. We offer personal service and convenience." Whitaker Ace Hardware has been in Chaffee, Missouri, since 1952, but did not become part of the ACE franchise until the 1960s.

With the Ace brand behind his store's name, Steve Whitaker said he has the buying power of more than 6,000 stores, which helps him compete with bigger outfits such as Lowe's, Menards and Wal-Mart. But customer service, employee experience and product knowledge are key.

"Those stores can sell you a toilet, but can they tell you how to install it?" Whitaker asked. "They hire children to wait on people, but [those teens] have never installed a toilet or closet. They don't have a clue."

With four employees at his store, Whitaker said customer service isn't just selling someone a part, it's cutting glass, sharpening blades, repairing windows and making sure customers have everything they need before they leave.

Shopping local

Marla Mills, executive director of Old Town Cape, said a community such as Cape Girardeau that has big-box stores and small, locally owned businesses is a regional shopping draw. And the two retail extremes don't have to be seen only as competitors.

"Do they impact each other? Certainly they do," Mills said. "But sometimes it's a complement to each other, not a detriment."

Local businesses have a leg up against big-box businesses because of their relationship to the community, she said. Such stores have a "solid customer base that's based on things like customer service and convenience and things that people look for that are different than just pricing or options."

A study performed by the 3/50 Project, an advocacy group for independent retailers, shows for every $100 spent in locally owned stores, $68 returns to the community through taxes, payroll and other expenses. Spending the same amount at a national chain will result in $43 of the $100 staying local.

Having a blend of small and large businesses is critical in regional hubs, Mehner said.

"It's important to have both the national names that people recognize, as well as a strong group of local, eclectic, unique, awesome shops," he said.

ashedd@semissourian.com

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skluesner@semissourian.com

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