6.12. SR 10-18-1999 - Laserfiche WebLink

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Chapter 10 Page 5 of'25 Sprawl is not synonymous with planned growth development. If for example, a new Supercenter employs one worker for 20 hours and the impact on a small competitor is to create the loss of 1<< full time jobs -- is there a benefit to the community? . Development that exceeds a community's ability to absorb it will ultimately result in abandonment of prior and public investments -- and possibly the new supercenter will also close as the joblessness in the town increases. Lastly, the major discount chain may close because of losses in the town's purchasing power. The chain then opens in the next county, leaving the town desolate and abandoned. This is more and more becoming true in the United States as new large chains open stores not realizing the demographics and other limits of the market. Are Large Chains Doomed as Well as Small Stores in the Discount Race? News ofCaldor's and Bradlees' bankruptcies put to bed the belief that small retailers can survive the retail policies ofthe Wal-Marts. Certainly, it would appear that Caldor and Bradlees, each with several hundred stores and professional staffs, have the resources to compete successfully with a Wal- Mart or Kmart. Yet they have begun to flounder. Moreover, Kmart, Wal-Mart's major discount competition has suffered a series of operating losses for the better part. of the last two fiscal years. After a 1995 fourth quarter loss of $420 million, the company seems to be rebounding. Much of the loss was due to the write off of their subsidiary, Builders Square. Company executives contend that these write-offs and divestments are a necessary step in their tumarounu. This was guardedly confirmed by Kurt Barnard, president of Barnard's . Marketing Report: "They are not out of the woods, but their strategy is starting to take hold. "l A 1994 study co.. authored by David T. Kresge of Dun and Bradstreet Information Services i:"!lld retail consultant Gary A. Wright of Denver stated: "Despite predictions that small retailers are doomed, speciaity stores are thriving in some important niches, says a new study of retailing. In those retail sectors where personal service, location or expertise are valued such as the women's fashion, accessories and gifts, smaller retailers are doing very well, said co-authors Kresge and Wright.".4 The study discounts predictions that at least half of all retailers in business in 1990 will be gone by 2000. In the same Philadelphia Inquirer article the opposite position was taken by a Wall Street investment expert following the retail chain picture: "Senior retail analyst Walter Loeb of Loeb and Associates says the larger firms such as Wal- Mart are gaining increasing sway, with enormous control over pricing, the competitive environment and suppliers." "When Wal-Mart is growing at 18-20 percent a year with the (economy) growing only about 3 percent, somebody is giving up business," he added.n~ The study discussed in the article recommended personalized service as means by which small . retailers could survive. On the other hand, the authors warned that powerful chains such as Home Depot were also offering personalized service. http://www.shilsreport.org/chap I O.html 10/6/99