The Era of Big Box Retail Dominance Is Coming to an End

[Purveyor]

By David Welch, Chris Burritt and Lauren Coleman-Lochner - Mar 30, 2012 10:16 AM ET

When Best Buy Co. (BBY) said yesterday it was closing 50 big stores and opening 100 smaller ones, the world’s largest electronics retailer was adjusting to reality: The era of big-box retail dominance is coming to an end.

The new mantra is small box. While Best Buy, Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) are still opening large stores, all are putting increasing emphasis on smaller ones. Best Buy plans to double the number of its smaller Best Buy Mobile stores by 2016. Wal-Mart is building as many as 100 small-format stores this year, while Target is opening five CityTarget locations.

After 50 years of putting mom and pops out of business, big-box retail is having a mid-life crisis. A slow economy has hurt same-store sales, narrowing margins at big stores. Meanwhile, consumers, armed with price-comparison technology, are visiting more stores seeking deals or exclusive merchandise rather than making one-stop, fill-the-cart excursions.

“We’re undergoing a seismic shift,” said Natalie Berg, an analyst with Planet Retail in London. “People are still cutting back. People are buying more products online so there is a real case for downsizing stores.”

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http://www.bloomberg.com/news/2012-03-30/the-era-of-big-box-retail-dominance-is-coming-to-an-end.html

[liberal N proud]

1. They are losing to on-line shopping

On line shopping is a win-win for the retailers.

Currently retail stores require people to work the store with takes up space and they have to ship the merchendise to the store. Lose the square footage that is costly, lose the retail employees, lose the shipping cost.

They already pay the warehouse employees so they will get to keep their jobs, they will just be shipping items individually. And guess what? You the customer gets to pick up the shipping cost.

[spin]

4. I love Amazon.com. I can order just about anything ...

and it usually shows up at my door in two days. I don't pay shipping fees on many items as I have a prime membership.

Today I'm expecting a shipment of dark chocolate bars which I could never buy locally.

Endangered Species Tree Frog, Organic Dark Chocolate (70%) with Cacao Nibs, Yacon & Acai, 3-Ounce Bars (Pack of 12)

http://www.amazon.com/gp/product/B002TN02CC?redirect=true&ref_=oh_o00_s00_i00_details

I've ordered books, electronics, groceries, furniture, food, etc, etc, etc. The hell with going to the big box stores. the money that I have saved in gasoline alone more than pays for the $79 per year prime membership fee which allows me two day free shipping and many other benefits.

Amazon also has fantastic customer service. All the operators that I have called for assistance actually speak English!

[EC]

2. So many people I know

along with the aging society hate going to big boxes because they are big...I'm one of them, I'd rather go to a smaller store and pay a few cents more than have to look all over the place for items. Plus people have reduced shopping to just what they need making it a few items and want to get in and out quickly, not walk half a mile to find what they wanted and then half a mile to check out.

[ParkieDem]

3. Not a surprise.

First it was the General Store.

Then it was downtowns.

Then it was suburban shopping malls.

Now it's big-box.

Retail is constantly changing.

The question is, though, will this mean the general retailers (e.g. Wal-Mart, Target -- not just specialty electronics, etc. like Best Buy and Circuit City) will be reducing their size as well?