What has happened to the LHS has happened to many mom and
pop operations across the country. Some blame big box stores like
Walmart, Home Depot or others for the loss of local businesses.
Yes, the larger companies have economies of scale on their side
as far as pricing, but that’s not the only reason they succeed and
many of smaller operations fail. There’s something more.
The LHS faces several major problems. One is their limited mar-
ket. Their market for the most part is people who are willing to
drive 30-40 minutes (or more) to get there. For modelers and
hobby shops in a large metropolitan area there’s a larger pool
of hobbyists to draw from. If you’re a hobby shop in a small
town, then it gets tougher.
The big box stores get around the limited market problem by
having more stores across many cities. That requires having
access to lots of capital, which most LHS owners don’t have.
While most big box stores have tight margins, they make up for
MRH-May 2014
