The Reynolds Center Horizontal Logo In Color

Two Minute Tips

Retail angles: Weak sales, struggling big-box stores

December 31, 2012

Share this article:

Review chain and independent retailers in your local area to get a start on retail coverage in 2013.

Like the ghosts of Christmas past, I’ve been haunted the last few weeks by the names and logos of bygone retailers.  Watching a holiday movie recorded several years ago, I did a double take at a Circuit City commercial.   Unpacking tree ornaments, I found some stored in old boxes from Mervyn’s, Hudson’s and Marshall Field’s.  An unused wreath, tucked behind boxes, still bears the sales tag from a Value City outlet while a fake garland carried the price sticker from a beloved local chain of garden centers.

My pang of nostalgia for those defunct merchants is nothing, however, compared to the angst commercial real estate operators and retail managers must be feeling this time of year.  Word that holiday sales were weaker than forecast — perhaps the worst since the 2008 financial crisis, Reuters reports — bodes ill for some already-struggling retailers.  Why not take a new-year review of both chain and independent merchants in your market, as well as the state of commercial retail space?

Big box stores like Best Buy are the subject of a lot of speculation; as this Forbes blog sums up, they face not only competition from online sellers but a bit of a lull in consumer electronics mania.  And as has been the trend for a while, department stores struggle to remain relevant; I’m wondering what 2013 has in store for J.C. Penney after its marketing gyrations of 2012; the Wall Street Journal has the chain on its “do or die” list along with Best Buy, Radio Shack and Sears.

What would cutbacks or liquidation by any or all of these companies do to your local retail scene, and what other national players, regional chains and mom-and-pops are on the chopping block?   Talk with mall managers, commercial real estate brokers and mall/strip center owners about their outlook for the coming year.  Some large real-estate firms and analysts, like Reis Inc., Newmark Grubb and others may provide market-specific data on vacancy rates; here’s an interesting blog post citing Reis stats for third-quarter vacancy rates.  You also can try the International Council of Shopping Centers and your state’s retail trade groups.   The Federal Reserve’s Nov. 28 beige book report on economic activity cited slower mall traffic reports from some regions; keep an eye out for the January beige book, which should update with holiday observations.

Even chains that aren’t going bust can change strategy, leaving empty holes at malls and centers; the Milwaukee Journal-Sentinel reports that a Restoration Hardware store is closing at the company seeks stand-alone locations.   And here’s a Gannett story about how the loss of two anchors is hurting small businesses at a New Jersey strip center.

For small business owners, or would-bes, you could do a tick-tockish “anatomy of a store failure” if you’ve had any recent going-out-of-business scenarios.  Near me, an independent pet store opened and shut in just over a year.  I knew it was doomed from the start given its poor location in an under-trafficked wing of a strip mall, its limited product selection, a very passive proprietor and zero advertising.  The presence two miles away of a vibrant independent shop with 25 years experience, a quirky staff, a liberal hand with free samples and aggressive approach to service — all purchases are carried to customers’ cars by fast-moving young workers, for example — didn’t help.  It’s heart-wrenching to see someone’s dream fail, no doubt at a huge toll to his personal finances, but a chronicle of those mistakes would make for a powerful small business feature.  By comparison, a “green” themed resale and consignment shop that opened around the same time appears to be thriving, though I’m not privy to its books.  Comparing the approach of two business owners would also be an interesting angle.

And here’s a SeekingAlpha article on retail stock picks; some of the analysis might be useful background and prompt questions you can apply to the retailers on your beat.


More Like This...

The businesses behind fear

Fear is one of life’s constants. We’re all going to feel it at some point, with varying reasons why. Humans have no problem identifying fear

Two Minute Tips

Sign up now.
Get one Tuesday.

Every Tuesday we send out a quick-read email with tips for business journalism.

Subscribers also get access to the Tip archive.


Get Two Minute Tips For Business Journalism Delivered To Your Email Every Tuesday

Two Minute Tips

Every Tuesday we send out a quick-read email with tips for business journalism. Sign up now and get one Tuesday.