We have all seen this happen. Smaller retail stores often close shortly after a large retail chain opens nearby, because the small business has to charge higher prices due to a lower volume of business. This applies to everything from clothing to auto parts to grocery stores.

How can a small business increase traffic and stay competitive with the large chains, and still maintain a decent profit margin?

Customer Loyalty would be a pretty big thing i think, if you’re loyal to your customer then they will choose to shop at your store compared to the bigger stores, they only reason they shop at the bigger chain is they can do way better prices because they really big so usually just buy the products in bulk and get massive discounts but if you offer your customers the total package as in great customer service, loyalty as in putting them first, good price, just offer them something the big store cant and that usually is great customer service always keep in contact with them, for example grab their e-mail address so you can e-mail them about special offers and still make them realise you are still around and not to forget you because if you dont remind them you still around, they will forget about you and just go to the big store. good luck