Large Retailers More Eager to Embrace Smaller Site
Atlanta, Georgia, October 26--The supersizing of retail stores may have peaked, according to the Atlanta Journal-Constitution.
Sure Home Depot, Wal-Mart, Target and others are still building gigantic stores. But they're also rolling out urban concepts and tailoring stores to smaller sites to accommodate zoning regulations and community demands.
"We do have our successful format," said Frank Blake, Home Depot's executive vice president of business development. "But it gets adjusted and tailored to locations."
Home Depot recently opened a store in Vancouver, British Columbia, that's two-thirds the size of a typical orange box. Like the chain's Manhattan store, the Home Depot "lite" sells no lumber, cement or heavy building materials. Instead, it focuses on designer lighting and the hottest new designs in bathrooms, kitchens and flooring.
Retailers face constant pressure to grow or lose market share to competitors. In recent years, big-box chains began setting their sights on urban areas as sprawling suburban opportunities waned.
"A lot of this has to do with the fact that Target, Home Depot and others have already penetrated the less-dense suburbs," said Kelly Whitman, senior real estate economist with Portfolio and Property Research. "The real growth in the next 10 years is the coastal areas and denser metros."
In recent years:
--Target opened in Buckhead with cart-veyors -- escalators built for carts so shoppers can navigate the store's two levels.
--Publix unveiled its 27,000-square-foot prototype -- much smaller than a suburban store of about 50,000 square feet -- with locations opening in Buckhead and Midtown.
--Kroger, too, opened smaller stores, including the downtown store in City Plaza and a two-level urban store just above Midtown at Brookwood Place on Peachtree Street. There's even a small-scale Kroger in suburban Peachtree City, where the chain also has two big-box stores. The smaller one is in a space bought from Harris Teeter when it left metro Atlanta.
-- At the District at Howell Mill in north Atlanta, neighborhood opposition kept a Home Depot out, and a new developer and the community settled on Wal-Mart -- though it's more like "small mart." The retailer will open with just 150,000 square feet, instead of a 220,000-square-foot Supercenter.
Wal-Mart agreed to concessions beyond the footprint size, such as a product mix aimed at reflecting community tastes. The chain also agreed not to open with a gun department and will not sell products on sidewalks outside the building.
But while there are a number of examples of shrinking boxes around metro Atlanta, "it's not happening as quickly here as other cities," said David Birnbrey, chairman of locally based Shopping Center Group, a development consulting firm.
Unlike some other major cities such as New York, Boston and Chicago, Atlanta's central business district has yet to attract scaled-down versions of big-box stores.
However, Birnbrey thinks downtown's fate is about to change. "With all the development around Centennial Park and attractions such as the aquarium under construction, I think it's a matter of when, not if, big-box retailers will begin looking toward downtown and will need to be creative," Birnbrey said.
Urban retail growth is being fueled by Atlantic Station, Lindbergh Plaza and the Edgewood Retail District by Little Five Points. But those developments, which are being built mostly from the ground up, have enough space to accommodate retailers' suburban prototypes.
Even if size isn't altered, retailers tailor store exteriors in some areas. Glen Wilkins, spokesman for Wal-Mart, said the chain has opened a store adorned with trellises and fountains in South Carolina, and another with a Mediterranean feel and a boat launch in Tarpon Springs, Fla.
