Effects of Discount Retailers on Local Economy

Positive effects on local economy:

Job creation: The opening of discount retailers can create job opportunities in the local area, providing employment for a large number of people. This can help to reduce unemployment and boost the local economy.

Increased competition: The presence of discount retailers can increase competition among other retailers in the area, leading to lower prices and improved products for consumers. This can also help to attract more customers to the local area, boosting the economy further.

Increased tax revenue: Discount retailers often pay significant taxes, which can be a major source of revenue for the local government. This can help to fund essential services, such as schools and public transportation.

Negative effects on local economy:

Negative impact on local businesses: The presence of discount retailers can have a negative impact on local businesses, particularly smaller and locally-owned businesses. This is because discount retailers are often able to offer lower prices due to their economies of scale, which makes it difficult for smaller businesses to compete.

Reduction in wages: Discount retailers often pay lower wages than traditional retail stores, which can result in a reduction in overall wages in the local area. This can make it difficult for workers to make ends meet, which can negatively impact the local economy.

Lack of community engagement: Discount retailers are often part of larger, multinational corporations, which can lead to a lack of community engagement. This can make it difficult for the local economy to grow and thrive, as the business is not invested in the local community.

Conclusion:

The rise of discount retailers has had both positive and negative effects on local economies. While they provide job opportunities, increase competition, and generate tax revenue, they can also have a negative impact on local businesses, wages, and community engagement. The impact on the local economy and community is far more pronounced in country like India with a strong family and community oriented culture. Hence, It is important for local governments to carefully consider the potential impact of discount retailers before allowing them to set up shop, and to work to mitigate the negative effects where possible.

However the onus of balancing the positive and negative effects of discount retailers doesn’t just rely on the government and administration alone, but also on the consumers. Consumers wield far more power in ensuring there is a strong community fostering local economic structures in place in the form of their purchase decision. By deciding from where and whom to buy, they can turn the scales and ensure the local retailers and merchants are not left inadvertently affected by the growth of huge discount retailers. 

Keeping this in mind, Santhe team has come up with an unique idea of bringing local customers and local grocery shops together via their apps. Customers can use the Santhe App to easily create a grocery shopping list and wherever ready to make a purchase, the list can be easily sent to local grocery shops and supermarkets nearby. The local grocery shops and supermarkets that are registered on the Santhe Merchant App can then easily add their prices, discounts and deals to the and make an offer to the customer. The customer can now compare the different offers from different local grocery shops and choose the offer that suits them best. This new way of online grocery shopping aims to promote local economy and foster local community.