Big-Box Retailers Move To Smaller Stores In Cities Big-box retailers, including Target and Wal-Mart, started by building their discount businesses out where land was cheap and space was plentiful. But now they have big-city plans for smaller stores in places like Chicago, Los Angeles and Washington, D.C.
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Big-Box Retailers Move To Smaller Stores In Cities

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Big-Box Retailers Move To Smaller Stores In Cities

Big-Box Retailers Move To Smaller Stores In Cities

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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.


And I'm Robert Siegel.

Big-box retailers are moving into a new frontier: big cities. Both Walmart and Target have plans for smaller, urban stores. They're aiming at the likes of Seattle, L.A., Chicago, Washington, D.C., and New York. NPR's Franklyn Cater has been scouting some of the newest locations.

(Soundbite of train)

FRANKLYN CATER: Next to the Red Line in Chicago's transitional Uptown neighborhood, there's a new complex of shops and modest apartments for seniors and families. It's called Wilson Yard.

The anchor store is a Target. It opened in July with something very new.

Ms. SUNDA OBENDORF (Team Leader, Target): This is what we call the T-Fresh here. So we've got fresh produce and then the baked goods.

CATER: Sunda Obendorf is the store's team leader, that's Target-talk for manager. She says a year ago, it would have been hard to find this array of fresh food in a Target.

We're six feet from the cosmetic aisle, and we're looking at bananas and apples.

Ms. OBENDORF: Yes, we are.

(Soundbite of laughter)

Ms. OBENDORF: Welcome to big-box retail.

CATER: Obendorf says this city location has a racially diverse clientele. That means stocking different produce.

Ms. OBENDORF: Trying to get plantains, greens, those kind of things in the building.

CATER: And Target's idea of an urban store also looks a little different. This one is an average size, 126,000 square feet of TVs, pet food, bicycles, sports bras and school supplies. But land in this densely populated area comes at a premium. So it's all stacked up on two floors. There are escalators.

(Soundbite of laughter)

Ms. OBENDORF: Everybody likes the cart escalator.

CATER: To carry your merchandise up and down stairs and the parking is underneath instead of out front.

From the outside, this makes it almost like an old-fashioned city department store. Pedestrians are right up against the windows as they pass by. As a matter of fact, Sunda Obendorf says, most of her customers aren't using that garage.

Ms. OBENDORF: During the summer, especially, the majority of the guests that come in will utilize the Red Line or the bus line.

CATER: Though public transportation does have its limitations for some big purchases.

Ms. OBENDORF: I've got to tell you, I've never seen so many people flag down cabs. The SUV cabs make a lot of stops out front here and load up a lot of furniture and things. It's pretty cool, really. I'd never seen that before in my life. So it's definitely unique.

CATER: It seems that big-box retailers like Target have realized the need for a new business model.

Mr. CASEY CHROUST (Executive Vice President, Retail Industry Leaders Association): The urban markets are really the last frontier yet to be conquered by retail.

CATER: Casey Chroust is vice president at the Retail Industry Leaders Association. He says one reason these chains are moving into cities is that many suburbs are already full up with Targets and Walmarts, not to mention all those other marts.

Mr. CHROUST: And as some of their traditional marketplaces and market areas become saturated, they are trying to move into some of these additional areas to take advantage of them.

CATER: In Fairfax County, Virginia, a new Walmart opened a few weeks ago that's a kind of a middle ground in urban experimentation. It's on thickly congested Route 1, barely outside Washington, D.C.'s beltway, an area with a real mix of incomes and ethnicities.

Outside, it's what you'd expect: a big parking lot in front, Chuck E. Cheese's is next door. Inside, this is Wal-Mart's cutting edge.

Mr. STEVEN RESTIVO (Director of Community Affairs, Wal-Mart Stores Inc.): It's a smaller store than I think people are used to seeing from Wal-Mart. It's about 80,000 square feet.

CATER: Steve Restivo is Wal-Mart's director of community affairs. He gave me a tour, but we almost didn't need to walk around; in a store this size, you can see from end to end.

Mr. RESTIVO: You know, we don't have sort of the traditional lawn and garden offerings that we would have in a larger store.

CATER: Wal-Mart and Target both have superstores that run close to 200,000 square feet, but they say their future urban plans are small, as little as an eighth of that size. So this somewhat-downsized store is an example of Wal-Mart trying out what it means to be urban.

Mr. RESTIVO: A large Hispanic population in the surrounding communities, so throughout this store, you'll see all the signage is bilingual. You also see, as we walk through grocery, there's an entire aisle dedicated to what we call international food.

CATER: Again, grocery is key. Retailers say it keeps people coming in more frequently. And city officials say it's a way to address a long-running urban problem: food deserts, places with little access to fresh food.

That's a very familiar issue to leaders inside Washington, D.C., such as Councilman Harry Thomas.

Councilman HARRY THOMAS JR. (Washington, D.C.): We know that the food situation in Ward 5 is a critical matter.

CATER: Wal-Mart is planning four stores in D.C. Thomas held a community meeting this month to suss out concerns about one of them and to tell people why he thinks this is part of the answer for his under-served community.

Councilman THOMAS: The largest store would be in Ward 5, 120,000 square feet of grocery. We're talking about Walmart specific would have 300 jobs.

CATER: Jobs, that's one big reason. Another reason is to keep city dollars from going to suburban Walmarts.

Councilman THOMAS: there's $41 million that we know people in the District of Columbia are spending in the surrounding jurisdictions.

CATER: Community activism, along with union opposition, has kept Wal-Mart out of D.C. and some other cities in the past.

Thomas is also brokering meetings with Wal-Mart and organized labor. At this meeting, the councilman, a developer and a Wal-Mart representative fielded questions. Will locals be hired? Yes, they said. Will Wal-Mart invest in the community? Yes. Several people wanted to see those promises in writing.

At this particular gathering, no one outright opposed a Walmart, but some people are completely opposed.

Mr. ZEIN EL-AMINE (Wal-Mart Free DC): I think our motto should be: Think outside the big box.

CATER: Zein El-Amine is part of the group called Wal-Mart Free DC. He says this kind of development actually damages the community.

Mr. EL-AMINE: It depresses wages around it. Secondly, it usually destroys the small businesses in the immediate community and around it.

CATER: El-Amine's group is still organizing. So far, they've held one small protest.

Ms. HARRIET TREGONING: Hi, I'm Harriet Tregoning. I'm the director of planning for the District of Columbia. And we are standing outside a project called DC USA in the middle of Columbia Heights.

CATER: A project that includes Washington's only Target store. It's similar to that store in Chicago, right next to a subway stop, and it is busy, surrounded by other stores and restaurants. It's been a catalyst for gentrification. Tregoning says this is all really about a much bigger trend.

Ms. TREGONING: A lot of people are moving back to the cities. We've seen very substantial population increases in the last several years, nearly 10,000 new residents last year alone, the largest annual increase our city has seen since World War II. And so I think in some ways they're following their customers back to the city. And they're also saying: You know, here's a largely underserved market. Why don't we see if we can figure out a way to be urban and maybe crack into a whole new market?

CATER: But here in a neighborhood full of century-old row houses, opinions are mixed about whether this contemporary attempt at an urban big-box gets it right. Neighborhood resident Anne Bouie.

Ms. ANNE BOUIE: I love Target. I'm not going to lie. I'm in it every week. But they're soul-stealers from communities like these. They take out the soul, the spirit and the flavor.

CATER: What about it takes away the soul, you mean...

Ms. BOUIE: I mean, look at this. Does this have any soul or life whatsoever, any spin, any flavor, any style by any criteria?

CATER: As more Targets and Walmarts pop up in places like this, the real question is whether the big-box model can be adapted to fit in the big city. Franklyn Cater, NPR News.

SIEGEL: And you can find more on the challenge of keeping prices low in a big-city location at

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