Still looking for innovative solutions to empty big box stores

As some South Side Chicago residents lament the closing of two Target stores, the Chicago Tribune calls for the city of Chicago to follow the lead of other communities and find productive uses:

In Waukegan, Cristo Rey St. Martin College Prep, a Catholic school that serves mostly middle-income and minority students, refurbished an old Kmart for a modest $10 million. Architects added windows and skylights, flooding the space with natural light while economically redeploying the building’s existing features.

In Cleveland’s Collinwood community, the city bought an empty Big Lots store and turned it into a recreation center with fitness classes and an indoor water park.

Milwaukee lured a light manufacturing company to an abandoned Lowe’s store. In another part of the city, Children’s Hospital of Wisconsin opened a clinic inside a former Office Depot.

In Muncie, Ind., U-Haul opened an office and storage facility in a former Kmart.

Wisconsin Rapids, Wis., hosts a senior citizen resource center with adult day care in a former Walmart. You’d never know, looking at the creatively adapted space, that it once included a garden center and aisles of baby diapers and toys.

These are all good examples but it downplays the difficulty of the task at hand: everywhere from Manhattan to suburbs to small towns are dealing with empty retail and big box locations. Just a few of the issues at hand:

  1. Will the new use generate taxes in the same way as the retail use? Religious groups and community centers are not going to bring in similar monies even if they are helpful sites for the community.
  2. What will it cost to redevelop the property for other uses and who will pay that cost?
  3. Will neighbors always approve the new use? They moved next to what they thought was one thing and even the exit of a big box store may not automatically lead to a more desirable land use in their eyes.
  4. In the long run, how can a community overcome the loss of status and revenues from losing businesses? Again, community uses are good but many communities build their reputation on having businesses and certain revenues.

Perhaps one of the best answers to this issue is to not approve as many retail and big box uses in the first place or to require that the buildings be built or connected to surrounding neighborhoods in such ways that a new use would not be a major shift. The typical warehouse, strip mall, concrete box option surrounded by large parking lots is not easy to fix up.

Targeting suburban “Wal-Mart moms” in 2012 elections

Similar to the 2010 elections and echoing an analysis from November 2011, a commentator suggests the 2012 elections could be decided by suburban “Wal-Mart moms”:

Those voters most likely to remain undecided about their presidential preference are taking on a distinct profile, according to pollsters on both sides of the aisle: They’re suburban white women, between the ages of 35 and 55, who probably haven’t attained a college degree and who have kids under the age of 18. They very likely voted Democratic in 2008, then turned around and voted Republican two years later — if they voted at all. And polling and consumer research shows their focus is on their own household rather than national events…

Bratty and Margie Omero, a Democratic pollster, have extensively surveyed a group they call “Wal-Mart moms,” part of a clever campaign by the retail giant to associate itself with this year’s ultimate swing voter, similar to the oft-cited NASCAR dads of 2004, the soccer moms of 1996 or the hockey moms of 2008. The retailer has avoided getting too specific in terms of race, educational attainment, or geographic area — it defines the women as mothers who are registered to vote, have at least one child under 18 at home, and have shopped at Wal-Mart in the last month — but the group tracks closely with suburban, noncollege whites…

Consumer data backs up that sentiment. Wal-Mart moms are three times more likely than the average American to be interested in family or animated movies, dogs, and products like ketchup, frozen vegetables, and air fresheners, according to data collected by the consumer research firm Lotame. That indicates the women are the ones shopping for their families and are interested in saving pennies wherever they can. They are more interested in information on cruises, too, suggesting they’re eager to get away when their economic situation improves…

With such weighty economic situations on swing mothers’ minds, both pollsters say neither Obama’s nor Romney’s campaign has truly reached these voters yet. And both candidates face challenges in relating: Obama contends with a sense of disappointment that his first term hasn’t sped the economic recovery as much as they expected or that the recovery is leaving them behind. Romney contends with a growing sense that his business experience demonstrates he would favor the wealthy over the middle class.

For all of the talk about big money in elections, the American voter tends to be suburban and working/middle-class people looking for deals at places like Walmart.

One issue I have with analyses like these: they rarely give us the numbers to truly know the size of this group (how many Walmart moms are there really, particularly compared to other cleverly named demographic groups). Additionally, is this group distributed in such a way to really swing an election (in other words, are they located in sizable numbers in the swing states that matter)?

Might Target want to get in on this and start discussing “Target moms”? I assume these might be more educated, slightly more wealthy shoppers…

A disconnect: having electric car chargers at Costco

The story that Costco is getting rid of electric car chargers in their parking lots because of a lack of use could be taken in several directions. One could ask: doesn’t there need to be an infrastructure in place before electric car owners would go to Costco? But I think there is a more interesting question: are electric car users really the sort of people who would shop at Costco?

Costco is a big box store, plain and simple. They offer bulk goods at cheap prices. Their buildings are bland and surrounded by parking lots. Is this the sort of place that electric car users would go? Are there people who would shop at Costco but wouldn’t shop at Wal-Mart (and I assume there are quite a few)? From a broader perspective, the picking and choosing between the “righteousness” of certain big box stores (Wal-Mart versus Target versus Costco versus Sam’s Club versus Home Depot…) is odd: they all operate on similar principles though their particular implementation varies some. To shop at any of them is to encourage standardization and sprawl. This doesn’t really go with the electric car culture/vibe.

So where should electric car chargers be installed? A few retail options: Whole Foods and Trader Joe’s. I suspect these would get a lot more use.

Cabrini-Green site: from housing project to possible Target store

Since the mid 1990s, the area around the Cabrini-Green housing project on the north side of Chicago has been changing (see an overview of this change here). As the high-rises have come down (with the last residents leaving just recently), new mixed-income neighborhoods as well as new commercial buildings have gone up in the area. News comes today that Target may be building a store on this site in the near future:

Target Corp., the cheap-chic discount chain, is in talks with the Chicago Housing Authority to build a store at the site of the former Cabrini-Green Housing Project.

The retailer’s proposal was brought up for consideration at a CHA board of commissioners meeting earlier this month, said Matt Aguilar, CHA spokesman. “We are in discussions and hope to help bring additional investment to the neighborhood,” Aguilar said.

Demolition of the last high rise at Cabrini-Green is scheduled to begin on Wednesday. The seven-acre complex, once among the most notorious housing projects in the nation, is just blocks away from Chicago’s glitziest shopping districts on North Michigan Avenue and close to the wealthy enclaves of the Gold Coast and Lincoln Park.

Target declined to comment on the proposal.

If Target does move forward with this, it would be the second high-profile space they have recently obtained in Chicago. (Read here about their plans for moving to State Street.)

As redevelopment of this space continues to take place, how long might it be until residents and shoppers of the area forget altogether that the Cabrini-Green complex was once there?

Another question: is a big box store in the city such as Target okay or the best move? Does it depend on which store moves in (see the long-running battle between Wal-Mart and the City of Chicago) or are big box stores okay in the city but not good in the suburbs because of their contribution to sprawl?

Target coming to Carson’s building on State Street

State Street is a venerated shopping street in Chicago. Prior to the construction of the retail stores on Michigan Avenue north of the Chicago River, State Street was the home to department stores with familiar names like Marshall Fields and Carson’s. And now there is news that Target is planning to open a store in Carson’s iconic building:

Target will lease 124,000 square feet over two floors, but only 54,000-square feet will be selling space, the company said.

The retailer, known for its cheap chic, has been in talks for more than a year to lease space at the landmark Sullivan Center at State and Madison Streets. Carson’s closed its store there 2007…

The city has poured $24.4 million in tax-increment-financing to help restore the Louis Sullivan building, which also houses offices. Chicago-based developer Joseph Freed & Associates, the building’s owner, has invested another $190 million in the national and Chicago historic landmark in the last decade.

“I applaud Target for bringing this urban store concept to Chicago, as well as the new jobs and economic opportunity this store will create,” Daley said. “Target will be an important addition to State Street, one of Chicago’s most important retail centers, and will be located in one of city’s most architecturally significant buildings.”

The State Street store would be in keeping with the discount chain’s recent strategy to push into urban cores with smaller stores. Target recently signed deals to open a 70,000-square-foot store in the heart of Seattle and a 100,000-square foot store in a shuttered Macy’s in downtown Los Angeles. Those stores are slated to open in 2012.

“We look forward to preserving this Chicago treasure and blending in with the building’s aesthetic, said John Griffith, executive vice president, property development at Target. “A hallmark of Target is our flexibility in store design.”

As for Target’s iconic red bull’s eye, the retailer is still working out the details of incorporating its logo while still respecting the building’s historic status.

This announcement comes as both Target and Wal-Mart have announced plans recently to move into more urban markets. A few thoughts about this:

1. It is somewhat ironic that the stores like Carson’s and Macy’s (purchaser of Marshall Field’s) are mainly about sales from suburban malls while stores like Target and Wal-Mart, symbol of big-box suburbia, now want to be part of the city.

2. Is there anyone who is going to complain about Target moving into this iconic building? When Macy’s bought Marshall Field’s several years ago and moved into the flagship store on State Street, a lot of Chicago residents were mad that one of their iconic businesses had been replaced. Will there be similar concern about Target or are people just happy that they can get to the trendy Target in the middle of the city? (Imagine if Wal-Mart was planning to move into this location.)

3. It will be interesting to see how Target blends their image and layout with this historic building.

4. What does this move say about State Street compared to other shopping areas in the city? State Street seems to be an odd mix of suburban stores on a historic street. Couple this move with the ongoing saga of Block 37 and one has to wonder if there is any long-term plan for State Street.

How Wal-Mart plans to regain its edge

Here is an interesting summary of Wal-Mart’s corporate plans for the near future. The headline of the article says it all: “Wal-Mart, humbled king of retail, plots comeback.”

Three years ago, Wal-Mart ruled for convenience, selection and price. But today it is losing customers and revenue, and smarting from decisions that backfired.

Wal-Mart is not in danger of ceding its place atop the retail world. But competitors have begun to chip away at its dominance.

Over the last year, revenue at Wal-Mart stores open at least a year has fallen by an average 0.75 percent each quarter, according to the International Council of Shopping Centers. Revenue rose by an average of nearly 1.7 percent at Target, 8 percent at Costco and 5.9 percent at Family Dollar.

To fight back, Wal-Mart is again emphasizing low prices and adding back thousands of products it had culled in an overzealous bid to clean up stores. It’s also plotting an expansion into cities, even neighborhoods where others dare not go.

Even as the article talks about stagnant or slightly declining sales at existing stores plus some questionable decisions (like reducing the number of products on the shelves), the main issue seems to be perceptions. On the business side, Wal-Mart has been challenged, particularly on the lower end by dollar stores. But business has not tanked and Wal-Mart still thinks it has new markets to tap in the United States, particularly in urban areas. What do investors and shareholders think – is it just about stronger growth right now? On the public image side, stores like Target have offered an enticing alternative. And yet Wal-Mart has changed the layout and design of its stores to look more like Target and this seems to have helped. Ultimately, the article says Target’s revenues are still one-sixth of that of Wal-Mart.

It sounds like Wal-Mart thinks they need to make some changes. There is no guarantee that any business, even a behemoth like Wal-Mart, will continue to expand or even be profitable. And just by virtue of its size, Wal-Mart’s actions will continue to be scrutinized.

The continuing image battle between Walmart and Target

Two articles from CBS illustrate the image battle being waged between Target and Walmart. While the stories are supposedly about what you should and should not buy at each place, here are the opening paragraphs about the relationship between the two retailers. The first story focuses on Target:

In the battle for public opinion, Target has shellacked its larger competitor, Walmart. Whether it’s environmentalists attacking the very concept of big-box retail or workers’ rights advocates lambasting the chain’s treatment of employees, Walmart has become the poster boy for the excesses of capitalism. Target, meanwhile, has built a reputation for cheap chic, pairing with Liberty of London and Michael Graves to churn out high-design at low prices. Walmart gets blamed for putting mom and pop stores out of business, while Target recently opened its first store in Manhattan, a market Walmart has yet to crack.

Recently, however, Target has looked vulnerable, suffering more in the economic downturn than Walmart did, and committing a rare public relations gaffe by making a political contribution that angered gay groups.

The companion piece examines Walmart:

Despite (or perhaps because of) the fact that Walmart is the nation’s largest retailer, there are plenty of people who wouldn’t be caught dead in one. To these folks, Walmart conjures images of a rapacious juggernaut of stadium-sized stores offering low-quality merchandise, spotty service, and mistreating employees and the environment — while driving small local retailers out of business.

But many of those misgivings are starting to fade, partly as a result of some well-timed improvements to the company’s product line-up and its environmental record. What’s more, there’s nothing like the worst recession in 80 years to nudge “low prices” a little higher on the collective priority list. And while Walmart may not be making its employees rich, the chain handed out very few pink slips in the downturn and remains the country’s largest private employer.

To be sure, there are plenty of reasons to remain wary of the retail behemoth. Whether you are concerned about the threat to a downtown business district, object to the retail culture, or just have a mental picture of the Walmart shopper that you can’t square with your own self image, it may not be for you. But it’s worth keeping in mind that, when it leverages its enormous scale for good, Walmart can make a difference in a hurry. It’s one thing when a boutique sells fair-trade coffee, but when Walmart gets into the game, a lot of sustainable farmers benefit. Here are five product categories where you can comparison shop in good conscience at the nation’s “low-price leader.”

These openings are illustrative of how brand image matters in our world. The Walmart article opening begrudgingly admits that Walmart could contain some good for shoppers and shoppers could benefit if they are “in a hurry.” The real meat of the story is supposed to be the good deals (and not so good deals) each store offers compared to other retailers but this gets buried behind this editorializing about the image of each place. There could be a lot of interesting work done on examining how exactly Target has crafted a different kind of image and what markets each store serves.

Even with the negative publicity, surveys suggest Americans feel fairly favorably toward the Walmart. According to Rasmussen data from the summer of 2009, only 33% view Walmart unfavorably and only 26% “rarely or never shop at the store.”