Big Store in a Little Box

Large retailers like Best Buy are shrinking their footprint while others like Home Depot are leasing their parking lots to fast-food chains and auto repair shops.

March 04, 2011

NEW YORK - Come on, do you really need that big huge lot to sell televisions and painting supplies?

Well, maybe, but that??s not stopping big-box retailers from finding new ways to maximize their real estate.

Bloomberg reports that Best Buy is opting for smaller storefronts, called Best Buy Mobile, because its consumers are shopping more online. Home Depot is selling off portions of its parking lots to quick-service restaurants and auto repair shops, which attract the blue-collar and Mr. Fix-It demographic.

So why the rush to go from big to small? Is this a new "Alice in Wonderland" effect?

The answer may be at your fingertips, or perhaps it??s a matter of convenience.

The news source notes that as more consumers shift to cyber shopping, big-box retailers are realizing that their huge brick-and-mortar stores may be, well, too big.

"You have a massive rush throughout retail to get small," Leon Nicholas of consulting firm Kantar Retail told the news source, adding, "Honestly, I am not sure what's going to happen with a lot of these giant boxes. I like to joke that perhaps they can be turned into retirement homes for Baby Boomers."

Best Buy announced last week that it was slowing growth of new big-box stores this year in favor of adding 150 Best Buy Mobile locations, and Walmart also said that it??s accelerating the rollout of its smaller Walmart Express locations in the second quarter of this year ?" although it won't say where.

Even office-supply retailer Office Depot has embraced the smaller store, which began opening new shops "the size of convenience stores" in December 2010, notes Bloomberg. At a footprint of 5,000-square-feet, the Office Depot stores still contain the merchandise and copy and mail services of the bigger stores' sales, said Kevin Peters, Office Depot's North American retail president.

"Our box was just too big and didn't work for our customers," Peters told the news source, adding, "We are reinventing Office Depot as a convenience retailer. Think CVS and Walgreens."

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