Question

Your opinion: What do you think the relationship is between Walmart opening a store and other retailers closing? Does Walmart affect the profitability of other retailers and if so how?

Answer 1

Ans

As Walmart opens stores, other retailers see increased competition. Their demand falls. Since Walmart is seller which reduces costs and thus sells at low prices, other retailers can not easily compete with it. Further it has deep pockets. Because of these reasons profitibality of other retailers falls. small retailers even suffer losses. Thus other retailers shut down. But those who innovate, have strong loyalty of customers etc do not shut down.