Hacker News Reader

Comment by orf | Hacker News Reader

> Can you imagine not having anywhere to buy food and having to drive 3 hours just to get it?

But why wouldn't smaller stores open again now walmart is gone?

Edit: Say what you want about them being mom & pop stores that somehow cant start up again, if it takes 3 hours to drive to a shop and back there is a market opportunity. People will pay more for groceries when it doesn't involve a 6 hour round trip. I thought the idea of Americas great free market is that this void would be filled?

View on HN

The old mom and pops bootstrapped organically, grew both inventory and the know how to stock it over decades, in lockstep with the community.

Today, takes a big start cost to go from zero to viable, and the lack of intuitive mom and pop know how is a risk too. In these locations, that startup money itself will be risk adjusted, so expensive.

Wouldn't the people who worked at that recently closed buy'n'large store know about this?

The knowledge you are referring to was never there in the first place. Large chains have largely centralized inventory management and the actual stores are little more than distribution centers and cash tills. And, even was that knowledge and capability there, the bigger problem remains that the invisible hand doesn't make the necessary capital to open a grocery store (and both its inventory and its plant assets) appear from nowhere. This is one of the trap corners that the unfettered free marketeers of the world would pretend don't exist, but they do and they're ugly.

There's probably a lot of truth in what you say. But, the economy abhors a vacuum, and there will either be "something" that starts up, or in some cases not and those towns may die. The dead towns will have a complicated story that in many cases will probably include the death of local businesses by Walmart.

If I ran 7/11 or Shell, I might be thinking about how to put in gas 'n goes with a somewhat larger retail footprint, a larger percentage of life groceries than potato chips. That would have the backing of a large corp, so the first yearly lack of profit wouldn't kill mom and pop's retirement, and comes with knowledge of running the outlet and managing supply lines.

Bonus, you're gonna gas up before you make that three hour grocery run, maybe what they have at the gas station is good enough, or reduces the number of trips you need to make.

I'm not sure you quite grasp how hardscrabble these areas are, and 7/11 and Shell are both franchise operations in the first place. The capital still needs to come from somewhere, and gas has worse margins than grocery in the first place.

I understand the area is hardscrabble. And yes, 7/11 and Shell are franchises, that's the point. It's a response to the idea that mom and pop might not be able to step up to serve the community. That would be preferred, but if they don't, it's still possible to reduce the need for three hour drives, with a BigCorp that already knows how to do retail and already has the lines in place.

There are lots of ways to fill a hole.

>But, the economy abhors a vacuum

In theory. In practice there are tons of areas that a vacuum exists for decades.

The same way there are tons of rural communities in the US where you still can't get an internet connection apart from dial-up.

Because the people that were running them and just barely getting by likely don't have the funds to open a new store. A lot of these places the building/infrastructure was just handed down generation to generation. Once it goes under, there's nothing left to start it back up.

That's why banks offer business loans.

And they won't make those loans in the absence of a viable business plan. (Plus, this isn't Silicon Valley. The prospective business owner is almost certainly going to need to put some of their own money in.) A lot of dying ex-resource extraction towns just don't present much of a business opportunity for anyone. I also suspect that a lot of readers here don't appreciate that really long drives to get to a "real" store is not that unusual across fairly large swaths of the US.

Try getting a business loan as e.g. a poor southerner ex-Walmart employee to open a new grocery store in Indianola, MS or Forkland, AL or tons of even smaller places...

With what capital? More likely that these old mining towns and more rural communities wont exist in a few generations. With younger people moving to the cities to find whatever work they can.

Opening a store is not exactly cheap. There are no VCs that will front you the money but you have to risk your own.

I smell a startup opportunity.

Well, yeah. Starting up a mom & pop grocery store.

It very well could 10x on you, too.

A really bad one. Grocery stores are very low margin business.

Reply on news.ycombinator.com