As larger retail chains reexamine their store base and close units, Green Bay, Wis.-based Shopko is adding stores. And the retailer is doing it by finding opportunities in rural areas and by opening a smaller-format unit, the Shopko Hometown store.
In 2015, the company opened 53 stores. And year-to-date, it opened an additional 12. Chief executive officer Peter McMahon told WWD the target for 2016 is about 30 stores, “and we may go higher,” he said. The company operates 363 stores in 24 states, which includes 131 Shopko stores, five Shopko Express Rx stores, five Shopko Pharmacy locations and 222 Shopko Hometown stores.
McMahon said the rural population “is grossly underserved by retailers, so we’re eager to bring Shopko Hometown to more communities.”
“We’ve received overwhelmingly positive feedback from customers in our current hometown communities who tell us they appreciate the improved shopping experience and access to a broader, differentiated selection of merchandise, including products and brands previously not available in their community,” the ceo added.
McMahon told WWD that the company eyes markets where there are perhaps 5,000 or 6,000 residents who often travel 30 or more miles to shop. The ceo said Shopko Hometown offers them high-quality private-label and national brands, which include Puma, Adidas, Lee, Hanes, Free Country, Dickies, RealTree, NorthCrest and Nevados.
In regard to online shopping, McMahon said “we’re in the same race” as other retailers. But the ceo quickly noted that even as online is a “key strategy” for the company, physical stores and e-commerce “have to play together. You have to have both.”
McMahon said the company has seen online sales soar more than 20 percent. “But 50 percent of our customers go to our Web site to shop for products, and then go into the store to purchase it.” The ceo said with the smaller-format Hometown stores, shoppers can have items not available in the unit delivered to the store. The company said the Hometown stores “provide a broad and dynamic offering of strong national brands and high-value private-label brands of apparel, home furnishings, toys, consumer electronics, seasonal items, groceries and lawn and garden products — all in an attractive, easy-to-shop store that ranges from 15,000 to 35,000 square feet.”
The ceo said today’s consumers have experienced a shift due to the Great Recession — “especially Millennials.”
“I think she [the customer] has learned to be more frugal, and even though the economy has improved for the better, she remains frugal,” McMahon said. “There’s no need for her to change.”