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University of Massachusetts Amherst

Family Business Center

How to Survive When a Superstore Opens Down the Block

by Shel Horowitz

If you want to do well as the mega-stores hang out their shingles, you'd better know what you do well and how it's different from the superstores' strengths.

This was the message from four "experts in the trenches": family business owners who've faced off national competition and not only lived to tell the tale, but have even prospered.

Pauline Lannon of Atkins Farms Country Market, Curt Shumway of Hampshire Hospitality Group, Frank Nataloni of Kitchens by Curio, and Peter Forastiere of Forastiere Family Funeral Homes faced very different challenges and responses, which they shared with attenders at the May meeting.

Yet all four used common solutions as at least part of their approach:

  • Identify the areas you can do better than the biggies and concentrate on those areas, even if it means phasing out other segments
  • Build relationships with your customers; emphasize trust, the personal touch, and the best possible customer service
  • Create alliances in your industry
  • Stress the value you add, rather than the price; you cannot compete on price with stores that buy in far greater volume

While expanding the size of their store, Atkins worked hard to maintain a homey atmosphere. They rejected the stark walls and fluorescent lighting of large grocery stores in favor of a country look, and created a product selection emphasizing highest quality and local producers. They have partnered with area farmers in the CISA Local hero campaign and have made the store a destination with food tastings and other special events. "And we listen to our customers; they're the real managers of our business.

Hampshire Hospitality Group decided to be a big fish in a small pond, building or acquiring hotels that offer many choices of location, price, and amenities. Several of their properties are affiliated with national companies, starting with the original Howard Johnson franchise Shumway's father opened in 1966. "Is it good for us to be perceived as large? In many cases, it is. Others have come into the area, we have growled and none of them have stayed." While certain times of the year are always busy, having many rooms to fill is an expensive challenge in the slow seasons. "I'm scared not to grow because if I don't do it, someone else will. And I'm scared to grow too much in any one market in relatively uncertain times."

Kitchens by Curio was ready when Home Depot opened. "As we grew, we developed our design ability, so when the killers came into the market, we focused on that. I adapted to what they didn't offer or didn't do well. We became certified kitchen and bath designers. We eliminated our countertop shop, it was taking our time from what we really wanted to focus on: someone who wants to create a work of art with their own personal style. We deal with fewer people but for a longer time with each one. Home Depot and Loews have helped us focus on where we're going. We're still in the same basic volume category. I have installers who've been working with me for 12 years."

In a business where many operators resist change, Forastiere has been an innovator for a long time. They were among the first to offer such options as funeral pre-planning, and to work with their clients do develop highly personalized memorial services. Like Shumway, they've opened or purchased several new locations -and they've joined a consortium of about 100 funeral homes, to gain clout in marketing, purchasing, and lobbying. In an industry where their biggest competitor operates over 5000 funeral homes, that clout is necessary to survive as a small local firm operating in just two counties.

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