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TRC Blog

June 28 , 2011

Getting Smaller is Getting Bigger

Getting Smaller is Getting Bigger

By Steve Lieberman, CEO There is no question that "bigger is better" is at the heart of capitalism. However, as growth retailers continue to adapt to an environment with little to no new space coming online, we are seeing new concept stores and prototypes being developed to meet the available space in targeted markets. Further, as retailers actively perfect their portfolios [right sizing, repositioning, even looking at reverse cannibalization, whereby they can increase store productivity by closing redundant locations], many are responsively relaxing their requirements, and otherwise adapting their store prototypes, capitalizing on huge opportunities-- and the trend is growing. Some great company's like Bed Bath & Beyond have always known this and their flexibility has been a cornerstone of their success. Others have been served very well by their rigid requirements. However, we are now seeing a proactive trend emerging. Examples include The Sports Authority who has developed a 12,000 sf Elite store [a third the size of their traditional stores] to serve more affluent micromarkets. PetsMart, JoAnn's, and Dollar Tree have each developed new prototypes that are half to two-thirds the size of their traditional stores. WalMart and Toys R Us have each announced "Express" formats. Target is working on a smaller concept store, HEB Central Market is launching theirs, and the list goes on. The concept certainly works the other way around as retailers are rewarded for adapting their prototypes enabling them to lease larger spaces, however that one is not as blog-worthy. The point is that discipline is always valuable, however speed and flexibility are leading to exceptional opportunities for those positioned to responsively seize the moment and many top tier retailers are figuring that out.
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