It's not just about prices. It was only about prices, then there would be McDonalds everywhere and nothing else. If farmers were to open their own stores, they could still manage to have reasonable prices, and make their point on "best quality", "organic food", plus offering some plants / species you would never be able to find in a big supermarket. You can't go head to head against Carrefour by just providing the same service. They would have to differentiate. That's how free market works. There are always needs that the big competitor will not be able to cater to.
You do realise you're actually arguing against your own point 2 up?
You said the reason the small traders went out of business is price, but now they suddenly shouldn't differentiate on price?
You don't really seem to understand monopolies or free markets or how they operate.
1. Monopoly emerges
2. Competitor opens
3. Monopoly slashes prices in local store, while maintaing prices in all others
4. Competitor runs out of cash, closes
5. Monopoly puts prices back up
That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'.
But hey, you ARE French, of course you're right. The same thing of big chains killing all small towns isn't happening in the UK too for example. Oh wait, it is.
Nope, I was not arguing about my own previous point. In the first one, I replied to the idea that Carrefour is overcharging for food, and that then nothing prevents producers from selling their own products at a cheaper price. They can start small and setup their own distribution.
My second point was to reply to another idea floating around, that "if a new competitor enters the market, Carrefour will slash their prices to kill them off". Then, the small producer has the choice to differentiate if they cannot fight on price.
By the way, since I'm French, I may as well remind you that in every small town and big city of France, there are still weekly markets where local producers come and sell their products, very often for a higher (and not just a little higher) price than what you would pay in Carrefour or other supermarkets. And guess what ? Some people STILL buy their food there. Not everyone, but quite a lot do. So, there's nothing preposterous about the idea I was proposing, because there's clear precedent, even in the current market situation. Some people will always be paying to pay more for "quality", "traceability" and direct-relationship of trust between the buyer and the seller.
Now, for most people (not the ones I just mentioned), you also have to realise that Food has become a commodity, and therefore for those people, they are not going to be interested in paying more, they simply want to get their food as cheap as they can, so they can spend their money somewhere else (ipad, new tv, vacations, etc...).
It's all about knowing your consumers in the end, and finding out how you can better serve (some of) them.
Coming back to the discussion, the competitors of Google Maps should be thinking of how they can provide more value to users than the "free" Google Maps. By the way, in other markets, like video games, some online services like Steam have no problem fighting against free offers (i.e. piracy) just because they provide more convenience to the end users. They get it, and they don't bitch about piracy or whoever else killing their business.
When you start pointing fingers around, it's usually your product/offer/service is simply not good enough, or nobody cares about it.
"That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'."
So are we going to have laws now where big companies can't lower and raise their prices?
If you want to blame anyone, blame the consumers that only shop for the lowest price. Walmart is a good example of this in the US.
The other problem is that as a small business, you just don't have the resources as the big guys. For example, you might order 1000 widgets from a supplier for $10,000, but because your competitor orders 100,000, they can get a bulk discount and charge a lower price.
Unless we have laws that prevent a business from getting to a certain size and keeping them all small (which I am against), there isn't any way to stop the above scenario.
Similar to how software, music, and movie companies need to change their business model, so do small companies. With globalization becoming easier and easier, they need to offer something that the big guys can't.
Trying to compete on price will only put you out of business quickly
I didn't say that, I was just pointing out that when you get to the point of a monopoly it's very hard to get back. Worse still the big company then starts lobbying to make sure it stays a monopoly, America's phone networks are a good example of that.
Also the other big problem with monopolies is that they squeeze their supplier dry as they're the only game in town. So here in the UK the supermarkets are squeezing the farmers' margins to the extreme as if they take their business elsewhere that farmer's out of business. Who else can he sell the millions of tonnes he has in the ground to?
Further problems are caused by the big guys doing stuff like pumping water into chicken breast to make it look plump and increase the weight, increased revenues, customers think they're getting more for their money based solely on price/weight.
I also lament the death of bakeries, for example bread from supermarkets is horrible. Donuts suck. We used to have Chelsea Buns where I grew up, the dross they sell in supermarkets is roughly a tenth of the 'tastiness', it's just crap. But all the bakers are out of business because who wants to visit ten stores and pay more when you can visit one?
Over here in the UK they used to restrict how close a supermarket could be built to a town centre in order to curb their growth. I think they've relaxed that now as they've definitely got closer than they used to be. That's one example of how they used laws to try and give the smaller guys an advantage.
Another example is they have restricted the opening hours, but the supermarkets are now opening convenience stores, in my city centre alone there are 6 Tescos within 5 minutes walking distance of each other.
How to stop it? Should we stop it? I don't have any answers unfortunately. If I did I'd probably have a Nobel prize.
EDIT: The part of me that wants it to stop is that it's all so homogenous, all the stores are laid out exactly the same, they've all got the same 6 ready meals, the same 6 meat items, the same 6 larger brands, the same 6 cakes, the same 12 brands of crisps, the same 15 chocolate bars. Where's the local produce? Where's the seasonal produce? What if I don't want a pepporoni pizza, I want a chicken one? Is life really supposed to be that fucking boring? I rarely swear here, but I feel it, really feel worried for our collective soul.
I wouldn't compare phone networks with retail, it's a totally different situation. Phone networks are nothing but state-allowed monopolies. Retail chains win by other means.
I can relate with how you feel, that it's sad to see small stores disappear and all. But it has never been easier than now to actually go and get your products directly at the farmer, if you really want to. Most people have a car and the countryside is not 3 hours drive from where they live. It is technically possible to go and get your food outside of the retail chains if you want to spend the time to do it.
Most people have no interest in doing so, because they want convenience. They want to save time. They do not think it's worth it. It's pretty much a cultural problem, not a market problem.
In France you still have lots of bakeries around because people still value Bread quality over price. Since bakeries are widely spread, they are reasonably convenient to access. So the business thrives, no matter if the big chain sells the bread dirt cheap next door.
How do we stop it ? Start with education. Tell your children what's the difference between the supermarket food and the rest. Explain why it's important to eat well. It's the same thing as explaining to a kid why it's necessary to save for the time when they are old and cannot work anymore. Education is especially important since most people nowadays are born in cities or suburbs, have completely lost contact with the culture of food production, and just see the end product. It's going to be tough to change that state of things, if cities continue to grow.
