retail news in context, analysis with attitude

Reuters has a piece about what it calls the “identity crisis” being suffered by many US retailers: “The big ones want to be smaller, the small ones are getting bigger and all of them want to sell more food.”

One of the central goals of the adjustments being made by many chains is to avoid the fate of Borders and Blockbuster, and Circuit City - and find defensible positions where they are less vulnerable to competition from Amazon.com. At the same time, there are other changes that need to be compensated for, like the move by more people to urban markets and the ongoing economic challenges that are forcing more people than ever to pay attention to prices.

And so, to summarize the story, chains like Walmart, Target and Meijer are creating smaller stores than they traditionally have opened, Dollar General is testing a Market Store format that is larger than usual with more fresh food, and a number of drug store chains are introducing food to their mix as a way of attracting shoppers more often.

"A lot of these more mature companies that have thousands and thousands and thousands of stores have really kind of maxed out where their format can actually go," Chris Donnelly, a senior executive in Accenture's retail practice, tells Reuters. "In general, I think what you're seeing is more that retailers are desperately searching out that next area of growth than it is an attempt to be everything to everyone." And, he goes on, “If they could wave a wand, a lot of them would completely reconfigure their stores. They'd probably close a lot of stores and the remaining stores would be smaller.”
KC's View:
I got into a conversation yesterday with a local retailer who was bemoaning the fact that Tower Records had gone out of business, and she suggested that it was the fault of companies like Apple and Amazon, which, she suggested, liked to build things but only leave destruction in their wake.

Which just struck me as such a myopic way of looking at the world. As someone wrote me last week, when newspapers were first invented, it is a pretty good bet that someone complained that they would put town criers out of business. Get over it. You have to adapt.

Every retailer - every retailer - has the responsibility and, indeed, the opportunity to figure out how to adjust to a changing environment and a changing customer. They can’t build edifices to their own dominance anymore, because it has been demonstrated that many of the most nimble and successful retailers of the moment are the ones without walls - or at least without walls around their imaginations.

Of course, a lot of chains could not close many stores and reconfigure others because they’d be worried about what the stock market might say. But maybe they need to be more worried about what shoppers are thinking. And how they are acting. And what they are buying.