Community-Owned Store Fills Space Vacated by Big Box

This is a great way to turn an empty eyesore into a functioning business. In terms of geography, I couldn't see the downtown Toronto location of Eddie Bauer sitting empty for too long. This concept is reserved for the sticks and kudos to those groups for being to able to execute. The cardinal rule of retailing is: location, location, location.

Doron Levy, President, TheMortgageMachine.ca

This development in Clark is another sign of the increasing strength of local, community-focused retailers owned and managed by good-citizen neighbors. There are third drivers to this movement. First is the failure of big box and chain retailers to identify local needs and connect with their community. The second is the ability of local independents to establish something totally unique to the delight of their shoppers. A third driver is that many Generation X and Y-ers are less than impressed with the sameness of American culture.

Bill Robinson, Principal Consultant, Bill Robinson Associates

There are a large number of food deserts across the U.S., particularly in urban areas. Community-owned stores seem a solution in areas where chains and independent grocers choose not to go.

'retailveteran'

I've seen a few community owned stores go up but they soon fail. They don't have the finances and expertise to stay open. It's a well meaning idea but if a smart businessperson can't figure out how to make a store work, its unlikely that the locals will be successful.

David Livingston, Principal, DJL Research

With a quick Google search over a dozen articles come up related to community owned stores. There are even associations that help promote what they call "localism." Take a look at this web site for more details.

The loyalty to the store must be extremely high since many of the residents own a share of the business. It also reminds me of how grocers use to learn about what they needed to carry through listening to their customers at the front door and at the register. This format makes it that much easier to get the right assortment since again the community owns to business.

This format also creates a real opportunity for smaller/regional brands that struggle to compete with larger national brands for shelf space. I could see regional brands sponsoring little league teams, a local charity or other local community efforts that would be noticed by residents. I am confident these small investments in the community would help regional brands gain shelf space and build brand loyalty. National brands would have a much harder time focusing on such small accounts and events.

This concept will continue to grow as communities demand better service, higher quality and more power over what they want local stores to carry.

John Boccuzzi, Jr., SVP National Retail Sales, Affinion Group

A lot of rural locations up here in Vermont rely on C-stores with gas pumps. Most mom and pop grocery stores have fiercely loyal followings, despite the most basic lacks in merchandising and operations, so they rarely close. When they do, the community sees it as a calamity. I've actually never even heard of these shopper-owned community stores (unless you're talking a co-op, but this sounds like a different animal). My gut is that they'd work when there's no alternative. I'd be a little surprised if many were able to thrive in urban areas.

Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer

The clue is in the name--community--stores. Where there are communities, there should be stores. Not necessarily imposed by some great corporation hundreds or thousands of miles away but by people who are part of the community, understand its needs and feel strongly about its wellbeing. Although community is, to some people, an obsolete (if not obscene) term, there are still those with enough determination to see it as the future. And they don't have to live in the sticks to make it work. Stores don't necessarily have to be run by smart businessmen - if they were truly smart, they would realise that success includes being part of the community. Maybe that's why many big boxes are closing down.

Bernice Hurst, Contributing Editor, RetailWire

I agree most community stores don't last long because of a lack of expertise. However, in many areas--rural and inner city locations, I see this as an opportunity for certain retailers. I think people at Aldi would agree.

Len Lewis, President, Lewis Communications, Inc.

While I love the community store movement, it's not the panacea that cures all retail ills in a community.

In my hometown, at one time, we had an A&P, Kroger, Star/Loblaw/BigD/DelFarm, a Giant Eagle, and a Thorofare supermarket.

All closed and became other things. It did hold on to a Foodland which took over the DelFarm space. Then in 2003, the landlord for the Foodland decided to raise the rent substantially. The Foodland owner could not afford the new rent increase, and decided to close, leaving the community without a supermarket.

The citizens and the local anti-poverty group acted to stop it by storming various council meetings. At the end, the non-profit got HUD Hope VI money to buy the building so that the Foodland operator could stay in the building. After stipulation that he make improvements, the lease became his, and the town kept their sole supermarket.

Since that time, a second supermarket, a beautiful Aldi Food Market has opened in the community with help from the state.

I see where PA, NY and NJ are using casino and other revenues to build a funding base to pool funds to provide for financial support for supermarkets to open in underserved urban areas.

Great A&P is in negotiations to do just that, with plans to open a new Food Basics supermarket in Atlantic City. AC currently does not have a supermarket. Soon it will have one.

'weo'

Consumer spending is down, and I'm guessing that it's going to stay down. I'm not sure that we'll ever see the kind of go-go spending we saw in the last 15 years. As a result, I would guess that some of these empty locations will be repurposed or razed. The US has been "over-stored" for too long to assume that dead stores will come back as live stores.

Cathy Hotka, Principal, Cathy Hotka & Associates

I see this as something that may have applicability in rural areas, but not much beyond that. Even there, the challenge is to make these stores four-wall profitable. Scaling the stores and their offerings to what can be sustained is the real challenge. Merely trying to replicate the departed retailer, which is a very understandable instinct, is likely to lead to real problems for the stores and their owners.

Ted Hurlbut, Principal, Hurlbut & Associates

Community stores are a good short-term opportunity in rural areas where big box retailers are shy to go. However, in times of economic turmoil, sustainability becomes the key issue. Typically these stores lack variety and advantages of economy of scale. Hence offering products at comparable prices becomes a challenge.

Also when big box competitors spurge up, even in a little remote vicinity, these stores would find it difficult to sustain. It's essential for these stores to carve their niche, like some mom and pop stores which have loyal followings despite a big box store next door.

Shilpa Rao, Retail Consultant, Tata Consultancy Services

It sounds like this community-owned store is basically the only thing in town. Therefore, it should survive no matter what. It sounds like the big box store that left wasn't making enough profit. Maybe it was making profit, but didn't meet a certain threshold.

I've always lived in an urban area with endless stores all around. They meet every need and spread across every brand, franchise and price range.

That community store may survive, but I'd hate to see the variety and pricing. Every store I've been in that's in isolation like that always has huge mark-ups and generally dingy interiors.

'CPGman'