Here's another way Wal-mart is getting spanked

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Tuesday February 25, 2014 · 8:59 PM PST

2014/02/25 · 20:59

Wal-mart has always targeted the rural customer, but built big stores in small towns. So it wasn't so much, as Kos suggests, that urban or suburban customers were driving out to the boonies to patronize Wal-mart. It was more that those in rural areas were driving in to the small towns to do business at Wal-mart (where Wal-mart had already driven out all the mom-and-pops that these people used to patronize). And frankly, since the mid-'90s, Wal-mart has built mostly in the suburbs anyhow.

But someone has literally and figuratively short-circuited Wal-mart's access to rural customers.

I don't know what's going on in your part of the country, but in my area, Dollar General is defying the big-box mentality of Wal-mart by building its small-box stores at wide spots in every rural road. Not even in towns. Just out in the middle of nowhere -- so to speak.

A Dollar General store typically has a footprint the size of a large gas station/convenience store, 4000 square feet or less. And they are not your typical "dollar stores" where cheap Asian-made goods are sold for $1. Dollar General is more like what we used to call a 5-and-10 or five-and-dime -- Woolworths, Kresge's, etc. A small, local store that stocked a variety of brand-name goods and groceries, with a national chain network that allowed it to buy in volume and command deep discounts from wholesalers and manufacturers.

So if you lived in a rural area, what would you rather do? Drive 15 miles to town to go to Wal-Mart, fight for a parking space, navigate the crowds, walk all the way through the store, and then wait in line at checkout? Or would you rather stop at the Dollar General that sprung up by the side of the state road just 7 miles away, easy in and easy out?

I'm on the road in rural areas over three Tennessee counties every day for business, and I have seen easily 20 Dollar Generals spring up in my area in the last two years. I thought a while ago that this was a shrewd strategy to outfox Wal-mart. Given this latest information, it might be working.

Is anyone seeing a similar effect in their area? There are other small-box retailers besides Dollar General that follow this model -- Family Dollar, et. al. -- but they usually set up in suburban or small town shopping plazas. Has anyone seen a regional or national chain of small-box retailers building alongside rural roads?

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