Percentage of consumers shopping at least once a month at various types of stores.

Wal-Mart leads the pack of stores where consumers shop at least once a month — and by a wide margin. No surprise there, the retail juggernaut has been felling weaker competitors along its path. Of course, price is the main object in today’s economy, a point driven home by variety stores such as Family Dollar and Dollar General, which checked in at number two. The two chains each open more than one store a day.


Wal-Mart/Wal-Mart Supercenters

2002: 57 percent; 2000: 53 percent

Wal-Mart owns the low-income shopper and is now attracting middle-income customers and their kids. According to Retail Forward, one-third of all consumers buying children’s clothing and one out of every four people buying women’s casual clothing and teen casual clothing buy it most often at Wal-Mart.Now they can buy modular homes and RVs and appliances in 100 stores. Wal-Mart is also putting Kinko-style office centers in stores and opening in-store candy shops.


Variety Stores: Family Dollar, Dollar General

2002: 28 percent; 2000: 23 percent

Variety stores serve a downmarket customer with an edited and decidedly unglamorous mix of products such as laundry detergent and toilet paper, but the sector is growing gangbusters. In 2002, the dollar store channel added more than 2,000 stores. The two leaders, Dollar General and Family Dollar, operate more than 6,000 units and 4,700 units, respectively. Dollar General plans to open 650 stores this year, while Family Dollar is slated to unveil 575.


Kmart/Big Kmart

2002: 23 percent; 2000: 28 percent

Kmart has closed some 600 stores since filing for bankruptcy protection in January 2002, but the chain had been on a downward spiral long before. Struggling under pressure from Wal-Mart, the chain didn’t have a clear plan for battling the behemoth. Surprisingly, Kmart, which is now out of Chapter 11, hasn’t seen as much falloff in traffic as experts were expecting since it embarked on a price-driven model with plenty of promotional activity that’s kept consumers coming to stores.*4


2002: 22 percent; 2000: 22 percent

Target has reached for a more upscale customer by introducing designer apparel from Mossimo, Cherokee, Stephen Sprouse, Liz Lange and, arriving in August, a line from Isaac Mizrahi. On the home front, there are products from Philippe Starck, Michael Graves and Swell by Cynthia Rowley. But according to Retail Forward, Target lost share in some important consumer segments, such as young, single upscale shoppers and midlife upscale customers.


Membership Warehouse Clubs: B.J.’s, Costco, Sam’s Club

2002: 22 percent; 2000: 20 percent

The sprawling emporiums sell bulk food and paper products, plus clothing, appliances and housewares, and have more product categories than a department store. The clubs have been ratcheting up the quality of their offerings with everything from $1 million diamond rings at Sam’s to fine wine at Costco. Consumers come for the low-priced staples but always find something else to buy, like copper cookware or wide-screen TVs.


One-Price General Merchandise Stores: Dollar Tree

2002: 20 percent; 2000: 15 percent

The difficult economy has been good for ultra-discounters. Many of the rock bottom-priced stores sell goods at 70 percent off the retail price, while others, such as Dollar Tree, charge $1 for everything. The Chesapeake, Va.-based Dollar Tree is the largest one-price chain, with 2,301 stores nationwide. Dollar Tree reported record first-quarter earnings of $615 million, a 20.8 percent increase over last year. Even Wal-Mart is testing dollar-only aisles in some of its stores.


Other Supercenters: Fred Meyer, Meijer’s, Kmart Supercenter/SuperK, Super Target, Biggs

2002: 16 percent; 2000: 14 percent

While Kmart closed Super Ks in connection with its bankruptcy, Fred Meyer and Meijer’s are growing. Meijer’s, based in Grand Rapids, Mich., has 157 stores offers gas, drugs and flowers, in addition to services like banking and dry cleaning. Both Meijer’s and Super Target have been testing innovations such as opening Starbucks stands in some locations. Bigg’s, based in Cincinnati, is operated by Euromarche in partnership with Supervalu.8

Closeout Stores: Big Lots, Tuesday Morning

2002: 13 percent; 2000: 10 percent

Two years, ago, Big Lots operated a collection of stores with nameplates such as Odd Lots and MacFrugals. Today, all 1,350 stores have been consolidated under the Big Lots banner. The $3.8 billion chain’s prices are 20 to 40 percent below most discount retailers and up to 70 percent below conventional stores. The more upmarket Tuesday Morning has 500 locations and features brands such as Martex,Wedgwood, Samsonite and Royal Doulton, and TV commercials starring Lauren Bacall.


Mall Apparel Specialty Stores: Gap, Banana Republic, Talbot’s, Express, Victoria’s Secret

2002: 9 percent; 2000: 6 percent

Gap continues to make impressive strides. Last week the company posted its third consecutive quarter of profit increases, a five-and-a-half-fold surge in its first quarter. Banana Republic’s fashion seems to be heading back on track with paisley-printed dresses, white eyelet skirts and a pink ladycoat that quickly sold out. Meanwhile, Limited is tinkering with design at Express and beginning a cobranding test with Seven jeans in the fall.


Traditional Department Stores: Macy’s, Dillard’s, Lord & Taylor, Marshall Field’s, May, Burdines, Lazarus, Proffitt’s

2002: 9 percent; 2000: 11 percent

Department stores may have a huge impact on the health of the malls they anchor, but they don’t play the same role in the lives of consumers that they once did. Category killers have chipped away at many of their departments, and discounters and off-pricers have forced them to compete on price. An aging customer base has also played a role in the declines. Bold action is needed, such as Federated’s renaming of its regional department stores with a hyphenated Macy’s.


J.C. Penney

2002: 8 percent; 2000: 9 percent

Penney’s has benefited from the soft economy that’s had some department store consumers trading down. But chief executive officer Allen Questrom wantsto be the fashion store of choice, not necessity. To wit, he’s hired new designers to spruce up private label brands and signed a deal to exclusively carry the trendy Bisou Bisou line. Questrom is looking to pull other designers off the runways and into Penney’s, and is reportedly pursuing Oscar de la Renta, among others.*12


2002: 7 percent; 2000: 4 percent

With a large selection of national brands, well-stocked shelves, and a promotional posture that keeps prices competitive, Kohl’s meets the fashion needs of the entire family. Last year, the chain launched Oshkosh for kids, Axcess by Claiborne, Jantzen, Havana Jack’s and Nine & Co. The chain aggressively entered the California market this year, opening 28 stores, and plans to open about 100 stores in 2004. Kohl’s is also is testing a 62,000-square-foot small store format.



2002: 7 percent; 2000: 7 percent

Sears has been losing market share to Target and Wal-Mart, while watching its competitor, J.C. Penney, begin a turnaround. The company has said it plans to sell all or part of its credit card business to focus on retail. It bought Lands’ End a year ago to help attract customers to stores and is said to be making improvements to its Covington label, which reportedly hasn’t performed to expectations.


Off-Price/One Price Apparel Stores: T.J. Maxx, Marshalls, One Price Clothing, Stein Mart, Filene’s Basement, Ross Stores

2002: 7 percent; 2000: 5 percent

Many off-pricers haven’t been able to leverage the economic downturn as well as might be expected. Comp store sales at TJX, which owns T.J. Maxx and Marshalls, fell 2 percent in the first quarter. Same-store sales dropped 9.5 percent at Filene’s Basement in April and 3.5 percent at Stein Mart. The off-pricers’ results show that few stores are automatically benefiting from the downturn and suggests that some consumers are reaching the end of their spending.


Upscale Department Stores: Bloomingdale’s, Neiman Marcus and Saks Fifth Avenue

2002: 3 percent; 2000: 3 percent

Now that upscale department stores have penetrated most affluent markets, they’re looking for other ways to grow. In the fall, Bloomingdale’s will test a 90,000-square-foot store in SoHo emphasizing contemporary apparel. Saks is considering small format stores for accessories, jewelry and shoes in markets where Saks does not operate full-line stores. Neiman’s jewelry and gift Galleries stores have been a disappointment, but the company reportedly isn’t giving up on spin-offs.


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