How Mom-and-Pop Stores Compete with Grocery Chains? A Perspective of Service Outputs on Self-Employed Retailers in Taiwan

Abstract

Along with social changes and technological progress, the number of convenience stores and hypermarkets has risen sharply over recent years in Taiwan, and the traditional small ‘mom-and-pop’ stores thus face severe competition. Surprisingly, these stores have not declined in Taiwan; instead, they show a slight growth in sales. What kinds of service value do they provide under circumstances of insufficient resources and plenty of competitors? This study integrates service outputs theories elicited from marketing channel literature to explore the sources of value-added service of the self-employed retailers in Taiwan. Through in-depth interviews with ten shop proprietors, five service outputs are identified: bulk-breaking, spatial convenience, waiting and delivery time, product variety, and after-sales service. In addition, social functions were found to play an important role that enables the shops to engage in relationship exchanges with their end-users. The intermediary role of the single unit store has irreplaceable and unique advantages, and the findings have many implications for the industry’s associates.