Consumer Insights From MasterCard Advisors
The Emergence of the Small Store Format
We’ve heard much talk about the waning era of the “big box.” In 2012, we saw many headlines relating to planned store closures by Best Buy, with similar stories for Sears and Office Depot, among others. More recently, of course, J.C. Penney made mega headlines. In all, from the announcements of just five Big Box retailers, anything from 1100 to 1350 big boxes could be shuttered over the next year or so.
Maybe this is not necessarily a bad thing. In some cases, we are seeing some of that big box space being reincarnated as two smaller stores instead of one. And from this, a pattern seems to be emerging, with growing retail buzz around how to make stores smaller, more selective, highly curated – in short, create a better customer experience.
Jonathon Graub, a principal in the Philadelphia office of A&G Realty Partners, specialists in the strategic consolidation and reassignment of store leases, confirms the smaller store trend. He attributes it in part to the lack of availability of large spaces in prime areas and the speed with which a chain can get to market when it enters with a smaller store format. But we must also factor in the continued growth of online commerce – Internet pureplays which desire a brick-and-mortar presence, while current brick-and-mortar chains may find there’s less need for larger spaces as their online businesses expand. [Read more...]