National Retailers Coming
But Which Ones? Rumor Says It’s ...
West Lebanon — Hundreds of thousands of square feet of retail space will open up in the Upper Valley in the next few months, but leasing agents and retail experts say landlords shouldn’t have much trouble filling that space with national tenants.
The big- and medium-box segments of the retail market are solid, they say, while quarterly earnings reports released in the last couple of weeks for most of the largest retailers were strong and apparently not fazed by Internet competition.
Meanwhile, rumors about which major retailers might be coming to the Upper Valley are reaching a crescendo as more than 250,000 square feet of retail space edges toward availability.
So far, though, it’s all speculation. Representatives from some of the retailers rumored to be headed here — Target, Lowe’s and Dick’s Sporting Goods — are staying tight lipped. So are those who are negotiating leases for Iron Horse Park, off Glen Road, and the soon-to-be vacant Shaw’s store in Upper Valley Plaza.
But that hasn’t stopped the retail rumor mill, which is spinning a new one that goes something like this: Walmart moves from its present Route 12A location to Iron Horse and opens a Super Walmart. That would make the current store available to another big-box retailer or a Sam’s Club to compete with BJs across the street.
It would make a certain amount of sense for Walmart to move into the larger store in Iron Horse, said Lang McLaughry Commercial broker Bruce M. Waters, who leases retail space in the Upper Valley. “But that’s pure supposition on my part,” he said. “I don’t have any knowledge of that happening.”
The smart money is on Walmart moving, said Rick Kiely of Milestone Associates, the Natick, Mass., real estate leasing and management firm. He manages Powerhouse Plaza, Kmart Plaza, Miracle Mile Plaza and North Country Plaza in Lebanon for a single owner.
“Walmart is what we’re hearing. I don’t know if it’s true, but that’s what’s going around,” he said.
“That’s a good rumor, and we’ve heard it too,” Bud Ames said last week with a laugh. Ames, who owns Twin States Sand and Gravel, is selling the 92-acre Iron Horse property to a developer who will lease the park’s 150,000-square-foot retail building to a major anchor tenant. Ames has heard a lot of rumors for the last couple of years as he sought city approval for the proposed development. When the sale is closed, presumably after the unnamed developer appears before the Lebanon Planning Board in October to get approval for two minor site plan changes, then Ames said the developer and the tenant will likely be announced.
Walmart officials couldn’t be reached for comment last week.
One of the earliest rumors was that Target was coming to Iron Horse. The company, which has 1,788 department stores in the United States and will have 124 in Canada by year’s end, has annual sales of about $73 billion. Its closest locations are in Concord and Keene, N.H., which puts Lebanon within its distribution route. The company would seem to be a good candidate.
“New Hampshire is a great market for Target, and we continue to consider new opportunities to serve guests there,” Target spokeswoman Stefanie Mohr said in an email Friday. “However, I don’t have any information to share about a potential new store in New Hampshire. We also continue to pursue opportunities to open stores in Vermont,” she said.
Lowe’s also might consider returning to the Upper Valley — rumor has it — after pulling out of Claremont a couple of years ago. The company, which has annual sales of around $64 billion and 1,758 building supply stores in the U.S., Canada and Mexico, plans to open 10 new stores this year. “We have not announced plans to open a store in Lebanon at this time,” said Lowes representative Chris Ahearn said in an email Thursday. “Of the 10 stores we plan to open this year, more than half are in Canada and Mexico.”
Earlier this month, Shaw’s announced that the 66,000-square-foot store in the Upper Valley Plaza was closing, along with a dozen other stores in New Hampshire and Rhode Island. Speculation abounds about the future of that site, although executives with Massachusetts-based WS Development, the owner of the shopping center, aren’t revealing the company’s plans for the site, or the additional 26,000-square-feet of approved, but not built, retail space adjoining the building.
“I don’t think it will be vacant long,” Kiely said, although he wasn’t buying the rumor that Market Basket was interested in the Shaw’s building, saying the rent is too high for a grocery store popular for its low prices. “I don’t think another grocery store is likely,” he said. “The market is oversaturated with groceries. I could see them subdividing the space and leasing it to junior box stores, some of the national retailers that like smaller space.”
The Shaw’s site, with its interstate exposure, might be attractive to Dick’s Sporting Goods, which has been eying the Upper Valley market for some time, Waters said. Dick’s Sporting Goods has annual sales of $6 billion and stores in Rutland, Concord and Burlington as well as 524 other locations in 44 states. The company is on target to build 40 new stores this year, its second quarter report says.
Officials from Dick’s Sporting Goods didn’t respond to a request seeking information about the company’s expansion plans.
Shaw’s has said the West Lebanon store would close no later than Sept. 2, and the landlords have said the future of the building will be clearer once they have possession.
Changing Retail World
Overall, the general retail market is doing well in the Upper Valley, although smaller sole proprietors are feeling the competition from online retailers, both Waters and Kiely said.
“The small retail market is pretty soft,” said Kiely who has smaller spaces available in North Country Plaza.
No matter what size operation, retail business is changing, incorporating new technology and some solid old principals, according to two marketing professors at the Tuck School of Business at Dartmouth.
The key to success in today’s retail market is being different than the competition and being able to mine loyalty data that will help to anticipate shopper’s needs and build relationships, said Kusum Ailawadi, the Charles Jordan Professor of Marketing at Tuck.
“For a while, everyone was trying to be like Walmart. Now, retailers are finding that didn’t work. They couldn’t do it with just having the cheapest prices, and now, they’ve realized that they have to differentiate themselves,” she said.
“It’s not wise (for big-box chains) to keep expanding unless they have something that the competition doesn’t have,” which could be a strong loyalty program that the retailer uses for more than just giving discounts. Data from the program can give retailers vital information about their customers and provide new ways to keep them coming back, Ailawadi said.
Smaller retailers — the mom-and-pop stores — have to be unique. “You can’t sell what the big guys sell. You have to be smart and differentiate yourself” in such ways as selling the freshest artisan food products or having unusual wares that aren’t easy to find on the Internet, she said.
There are six trends evolving in the retail market now, said marketing professor Praveen K. Kopalle.
Retailers are taking advantage of mobile marketing by reaching customers on cell phones, text messages and email. Technology even allows retailers to pinpoint a customer in a competing store and offer better deals, he said.
“The impact of social media on retail has huge implications, not just positive or negative (comments), but for promotions and brand building.”
Personalizing data also is becoming a big part of retail marketing. “For example, Amazon knows more about me than I do myself. BJs knows when I’m running out of paper towels before I do and can send me a reminder to pick some up,” Kopalle said.
Refined loyalty programs have been developed by the hospitality business for a number of years. Now, more and more retailers are using the programs to track customer behavior.
There’s also a renewed effort at some stores to make shopping a pleasant experience, with a new emphasis on service, Kopalle said. And some stores are reversing the trend that saw customers going to the brick-and-mortar stores, checking out products, and then going home to buy them online.
Walmart, Best Buy and other stores are using an approach that integrates the Internet with the stores. “People are now searching online and buying offline,” he said.
Warren Johnston can be reached at email@example.com or 603-727-3216.