Financial vacuum cleaner in the regions. I explain my opinion

I will tell you about the situation that I have observed over the last eight years of my work in the field of sales of building materials in our city. Associated with the sale of paints and varnishes (LKM). I work as a regional manager in one of the constituent entities of the Russian Federation in Eastern Siberia, in a company that produces paintwork materials (in three price categories). I will try to convey, as they say, the situation from the inside.

As any manager, I have a responsibility to fulfill sales targets and increase the sales of my brands. In all sales channels. But in retail over the past 2-3 years, not a single new construction store has been opened in the city (in the regions, the same, but there is a different reason). On the contrary, many points, since the arrival of construction hypermarkets, have closed.

Previously, I have led only one partner of the company more than 30 retail shops. Now the total is left no more than 10. Hardware stores are closing. I associate this to a greater extent with the fact that three construction hypermarkets have opened in our city with a population of one million (monopoly of one brand). The plans are to build a fourth.

Residents poured shopping here. Convenient: the assortment is huge, everything is in one place. Opening prices are below market prices. A hypermarket is civilized. Not like some kind of shop. Although, earlier there were also small construction supermarkets in the city. In the European part, federal chains have long occupied a large part of the sales market. They have established themselves in Eastern Siberia only recently.

And, with such an outflow of buyers from small shops near the house, the latter are on the brink of survival. The local construction hypermarket could not compete with this chain and had to retrain into a shopping center, distributing retail space for rent to small shops with a different focus. Market economy, what to do. Whoever is the strongest in the market won. Say, and what's wrong - I did not say anything special. Don't jump to conclusions ...

I propose to look a little deeper at this situation, but from the other side. I will tell you exactly what disadvantages I see not only for local players (stores) and manufacturers in this situation.

Outflow of finance from the region

All the largest building hypermarket chains are owned by foreign capital. The profit goes abroad. Yes, some taxes are paid here, jobs are created. But imagine how many jobs were lost due to the closure of small home improvement stores! And from the turnover of trade in local shops, all taxes and profits remained in the city.

At one time, I really liked the information that Gleb Tyurin told in his lectures. He explained on his fingers why such foreign networks are evil for the regions. Precisely due to the fact that buyers leave their funds in them, and the chains even buy goods in other regions, the region is emptying financially. Local purchases are either minimal or at prices with a very large discount. Listen to it, I recommend it.

Gleb gave an example that when he was in the USA, he met a situation: there are local authorities of small towns, understanding this mechanism, they simply were not allowed to build large supermarkets by any companies, even from this cities. They understood that otherwise the economy and life of the town would collapse. Local residents, owners of small shops and shops will lose their jobs and they will have to leave for the big city. Besides, it will make the city poorer if the big store is not local.

Money is taken out of the country not only in suitcases by big businessmen, but also migrant workers and tourists. But few people talk about such a civilized, within the framework of a market economy, siphoning of funds from the country.

Unfortunately, our authorities and government do not see this mechanism. And these are the foundations of the economy. If there is an inflow of finance to the region, people in the region will live better. Even if 10-50 people begin to build a house for themselves, this will pull a chain of financial redistributions and part of the funds will still remain in the region. How to leave the entire volume of such a financial chain? Without the development of local, especially small producers, it is impossible. Now small shops also buy goods from federal suppliers. But in networks this "vacuum cleaner" works harder, on a larger scale.

Quality of goods

We, as a manufacturer of paint and varnish materials, work with several chains of construction hypermarkets throughout the country. But from this network, which is monopolistically present in our city, we left in 2012. And all due to the fact that after only a few years of working with them, we would have to pour into cans a completely different paint, lower in quality, reducing the cost and keeping our minimum margin. As a result, they would spoil their name and brand.

And many take such a step for the sake of maintaining work with networks, maintaining the volume of production. Alas, all this is in the direction of decreasing quality. This situation in the networks is the same in other categories of goods. So it is in food chains. This is a market trend. All the more so against the backdrop of a decline in consumer activity.

This construction network has its own brands, which they buy directly from China. The price of the economy segment, but with a good quality for this segment. No one guarantees that this will remain so.

I don’t understand why to squeeze out of suppliers to the maximum, increasing the already not small markup of the network? People will still go to the hypermarket even at not the lowest prices, creating queues at the checkout counters. Or is the strategy like this: squeeze everything out of one supplier and move on to another? Because will there always be anyone willing to work with the network? But at what cost to the manufacturer and the quality of the goods!

I can say with confidence that if you buy a product in a construction hypermarket in our city and is identical in another store, they will be of different quality with the same packaging and model. In fact, this is a fraud, but it can only be proved by test purchases and laboratory tests. Even if this is done, the regulatory authorities will be able to punish them with small (in the scale of their trade) fines, or not react at all. Local convenience stores have understood this and do not work with most brands on the list of products that are present in the chains.

I have heard quite a few complaints about the quality from buyers. I can tell a lot of stories. Already for many buyers it is not even a secret that the quality of goods in construction hypermarkets of our city does not correspond to the price. But people still go and buy. It happens, and I too. But because it is convenient and quality fades into the background. The main thing is the assortment and prices! Although the prices are no longer so and differ from other stores. Except for the most popular positions: like drywall, plaster, fasteners.

To make repairs from high-quality materials, you will have to travel to specialized shops for tiles, wallpaper, plumbing. And ideally, you can buy bulk building materials elsewhere. I repeat: I am writing about the situation in our city. Where there are no discounter hypermarkets, the situation with the quality of goods is probably not the same.

But I think the situation is similar in many cities of the country. Most of them have long since closed small retail construction stores. networks came to them earlier. This is a national problem. This is one of the reasons why the population's finances are so bad in the regions. The financial "vacuum cleaner" in trade works like this.

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Photos are taken from open sources, from Yandex. Pictures

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