You know the charge: Wal-Mart kills small businesses. If one of the retailing juggernaut's Supercenters moves into your town, the logic goes, all the mom-and-pop shops that have faithfully served residents for decades will soon have no choice but to shutter their businesses.

But it doesn't always work that way. In some cases it actually makes sense for businesses to locate next to a Wal-Mart. You may be able to entice some of those throngs of bargain-hunters to stop by your establishment and spend a few bucks. But before you consider this strategy, be sure you can compete head-on with the retailing Goliath on price or selection.

I recently wrote about how Goodwill Industries -- one of the top thrift stores in the country -- is locating more of its stores adjacent to Wal-Mart Stores, Inc. (NYSE: WMT). In fact, that has become standard practice in the state of Ohio apparently. Why? Goodwill explained that both it and Wal-Mart serve the same types of customers ( or "demographic" as they call it in retail-speak). Sounds like a smart strategy to me.

But what about other retailers? From what I have seen, Wal-Mart Supercenters are retail anchors almost everywhere they are built. You see Blockbuster Inc. (NYSE: BBI), RadioShack Corp. (NYSE: RSH), Dollar Tree Stores (NASDAQ: DLTR) and chain restaurants like McDonald's Corp (NYSE: MCD) and Wendy's International (NYSE: WEN) pop up right next to Wal-Mart Supercenters. Why? Seems simple -- to get the traffic Wal-Mart has in and out of its parking lot.

Continue reading Go ahead, locate next to Wal-Mart -- as long as you can compete on price, selection

Go ahead, locate next to Wal-Mart -- as long as you can compete on price, selection originally appeared on BloggingStocks on Thu, 04 Jan 2007 12:29:00 EST. Please see our terms for use of feeds.