If you are in the position where your customer base is dwindling because of nearby chain grocery stores then waste no more time. You better do something quick before your only business dribbles down to nothing but cigarettes and beer, or those items that people forgot to buy at the big store. It is a good time to get your place a face-lift and think of some new options for attracting new customers. If you no longer have people buying staples from your store then you should become more of a specialty market.
You need to carry all those things that the big stores don't. Why bother with paper products and other bulk items. What you have to do is sell those things that the big store doesn't carry. There are many small businesses that produce small amounts of quality products. These are not sold in bulk and can't be found for cheaper. That could be the niche that you are looking for. Focus on certain specialties rather than a small more expensive selection of what big chains carry
There are tons of small companies that have wonderful handmade and organic products. If you can find these local that is something to do and to show off as well. You may be able to find simple things like organic milk and fresh eggs locally. There may be goat farms nearby that make some very nice cheeses. Make sure you stick with your big sellers. You don't want to change things that work. A good way to show people that you are changing some things for the better is to update your exterior. Clean it up and make it more inviting.
You want to give your workers a new look too. If you get some custom t-shirts and hats then they can all have a new uniform. If you design the products well enough then people will want to buy them too. You can provide certain products that people will need as promotional products. If you sell canned goods then have a can opener with your logo on it. If people love beer then have a promotional bottle opener on a key chain.
While you are updating your products you should do the same with services too. Consider doing local deliveries to customers. If you have regular customers then you would do well with a delivery service. Some people are just too busy to worry with stopping and shopping. They would be so happy with this. You can put magnetic fliers on peoples mailboxes with your new products and services. They will stick to the outside of the mailbox and then on your customers refrigerator.
Promotional hats are awesome for employees to wear and customers to buy. Put your store logo on those and quality promotional t shirts to liven up your store.