The Impact of Nontraditional Retail Footprints, Formats and Assortments

With back-to-school sales doing better online than in stores (as Amazon leads the way), traffic and sales in the physical retail landscape have remained lackluster this summer. There have been winners, most notably Target Corp. and Walmart, but it’s been a challenging year-to-date period. In its monthly report, RetailNext found month-to-month sales were “relatively flat,” with year-over-year sales declining just 0.3 percent — which analysts took as good news since flat sales are better than a steep decline. Last week’s chain store sales did show a slight jump as the Retail Economist-Goldman Sachs Weekly Chain Store Sales Index rose 0.9 percent week-to-week, while sales gained 1.7 percent year-over-year. But the gain, noted Michael P. Niemira, chief economist of the Retail Economist LLC, was driven solely by warehouse clubs and dollar stores. These retail segments tout frugality and cater to pennywise shoppers. Dollar stores, in particular, are finding the right mix in a tough climate, which includes using demographic data to pick locations as well as rethinking merchandise categories. Dollar stores also key into the “smaller is better” trend where footprints rarely exceed 10,000 square feet — and this approach continues to gain traction across retail. In AlixPartners’ most recent retail blog post, “Can Retailers

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