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BEYOND THE NUMBER
SURVIVING MARKET CHALLENGES
Among farm retail outlet managers there is a consensus that their numbers will continue to shrink, as will the number of customers they serve; but as for how to survive in this fast changing environment, there seems to be little agreement. Preliminary results of data collected by WEFA from a random sample of ag retailers provide insight into these concerns.

One manager's business challenge is another's opportunity, at least in the case of technology, e-commerce, and the Internet. Outlet managers are also keenly concerned with the farm economy, firm management issues, and government regulations.

Most respondents see the Internet as a growing factor, both in how they do business with growers and how they have more access to quality technical information. Many of these same retailers see the Internet as increasing price awareness and competitiveness, as well as driving margins lower. The Internet is mentioned as a business opportunity by less than 5% of all retailers. In general, retailers see their survival as being dependent on increases in customer services. Custom applications and information services are most often mentioned as the emerging needs of customers.

When asked for the most likely reasons that their outlet location would close, the four most frequent mentioned were farm economics, low margins, not keeping up with change, and a buyout or merger. Independent outlets are likely to mention retirement or personal health reasons. Urban sprawl and loss of farmland represented about 6% of all responses. Other reasons leading to closure of the outlet are government regulation, e-commerce, direct sales, and personnel turnover.


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