Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Suburban Retailers Learn to Squeeze into City Markets

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Suburban Retailers Learn to Squeeze into City Markets

Article excerpt

As young Americans move to cities, retailers that grew up in the suburbs are following them. And unlike previous efforts, they are doing it the cities' way.

With little room to expand in the suburbs, retailers, including Office Depot, Wal-Mart and Target, are betting that opening small city stores will help their growth.

It is a significant shift from their approach in the past, when they tried to cram their big-box formats into cities, often prompting big fights. This time, the retailers studied city dwellers with anthropological intensity and overhauled things as varied as store sizes (the city stores are a small fraction of the size of the suburban ones), packages (they must be compact enough for pedestrians) and signs (they are simple, so shoppers can get in and out within minutes).

"The suburbs are basically saturated with retailers," said Patrick L. Phillips, chief executive of the Urban Land Institute, an urban-planning research nonprofit, "but it's easy to develop stores in the suburbs, and hard to develop stores in cities."

Office Depot has revamped its stores to create an "economically defensible" way of expanding into cities, said Kevin Peters, Office Depot's president of North America.

The main objective for shoppers in cities is speed. So a store in Hoboken, N.J., that is a model for the company's urban branches is 5,000 square feet, about a fifth of a normal Office Depot. The shelves are about six feet high, much shorter than in a suburban store, so visitors can navigate quickly. The signs above the aisles are simplified so customers do not waste time interpreting them. The service desk, where shoppers can send packages or copy fliers, takes up a big chunk of the store, so no wandering is required.

A typical Office Depot has 9,000 items for sale. This one has 4,500. It sells immediate-replacement items (a pen) versus stock-up items (a 25-pack of pens). At sites where Office Depot has replaced one of its big-box stores with a small store, Mr. Peters said, the smaller iteration has retained 90 percent of the sales of its bigger predecessor.

Still, he acknowledged that the model was not perfect. …

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