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Small businesses struggling to stay afloat during a flood of ch

by Jennifer Biller

STAFF WRITER

Small businesses in West Virginia and across the country say they are in the fight of their lives.

They are struggling to survive in a changing retail market some say favors superstores like Wal-Mart, which offer a variety of goods and services under one roof.

Danny Thomas, owner of Rosebud Foodland in Clarksburg, is one of those who has felt the effect of Wal-Mart moving into the area.

"The end result is to lay people off and cut hours," Thomas said. "It has certainly affected our store and it affected the Foodland in Nutter Fort."

That store closed its doors recently after many years of operation.

"It was just a point in time where the Wal-Marts and big supercenters have taken over," said Jimmy Paugh, one of the owners of the Nutter Fort Foodland, recently. "I'd say the years of the independent grocer have pretty much gone by the wayside."

Thomas agrees. He has lost a dramatic amount of revenue and is saddened at the prospect that the business he had hoped to someday pass on to his two sons probably won't be able to compete.

"Ten years tops, there will not be an independent grocer around because of the mass merchandisers," he said. "What happens when they drive all of us out of business? Will they dictate the price and you have to pay it because there is no place else to go?"

Thomas doesn't mind competition for customers, but he wants equal footing when purchasing merchandise from manufacturers.

"The mega manufacturers give them lower costs," he said. "It puts us at a disadvantage."

The grocery industry isn't the only one feeling the pinch.

Ace Hardware in Bridgeport has also seen a decrease in business since Wal-Mart came to town.

Owner Rick Brake took over the store in 1994 from his father, who started the business in 1958. He has seen the Wal-Marts in Harrison and Taylor County cut into his market.

"Some days you just ask yourself if it's worth it -- butting heads with the big boys," Brake said. "We used to sell toys and housewares, but no more."

However, many consumers say they can't pass up the convenience of one-stop shopping even if they sympathize with industry Davids.

"You've got groceries, cleaning supplies, and housewares," said shopper Dora Myers of Flemington, who believes other services such as hair salons, banks and automotive services are a plus for many shoppers.

"You have everything under one roof. ... There is no running from store to store -- even the pharmacy is there."

Myers, who shops at the Wal-Mart in Grafton, said she is drawn in by convenient parking, large selection and low prices, as well.

Another perk of Wal-Mart is flexible hours for couples who both work and can't get to the Main Street stores that close at 5 p.m., said Kenneth Stone, professor of economics at Iowa State University.

Stone has spent more than 10 years studying the trend toward mass retailers and published his findings in the book, "Competing with the Retail Giants."

Fundamentally, big stores have changed the way people shop, he said. The average consumer spends 50 percent more in department stores like Wal-Mart than he or she did 13 years ago, he said.

"This is a big change and it means a decrease in other retailers," Stone said. "Small towns suffer the most, especially rural states with little population growth.

"There is only so much money to be spent and when Wal-Mart comes in it takes a significant chunk of the pie, it comes out of other merchants' cash registers," he said.

But, Stone added, not all businesses are crumpling under the retail giants.

"The merchants selling the same things can't go head to head, but if they are selling something different then they can capitalize on the traffic (generated by Wal-Mart)," Stone said.

Some of those reaping the benefits are furniture stores, restaurants and specialty sporting goods stores. Other retailers that have found a niche are trendy clothing stores like Old Navy and upscale jewelry stores, he said.

A study from Marshall University suggests an even stronger positive correlation between Wal-Mart and smaller retailers. The study, which examined census data from 1989-1998 and studied 14 counties in southern West Virginia, showed an increase in the number of retail establishments as a result of Wal-Mart.

"That doesn't include gas stations, restaurants and grocery stores," said Michael Hicks, director of research at the Center for Business and Economic Research at Marshall, of the types of businesses generated.

There was also a slight increase in wages in the region, Hicks said of a post-Wal-Mart economy.

"Wal-Mart pays wages as good or higher than other firms in the retail sector," Hicks said of creating another kind of competition.

The study also found that employment increased significantly following the entrance of Wal-Mart into an area.

Staff writer Jennifer Biller can be reached at 626-1443.

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