Retail giants begin to spin off smaller, less-costly stores

Thinking outside big box

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Grovetown resident Sheresa Jones was looking in Best Buy at the Augusta Mall for a smartphone for her boyfriend.

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Nine-month-old Derrick Hall, Jr. (center) stands and leans against a counter as his mother Kiara Cohen (left) waits for Cherelle Cuencas (right) to set up a replacement phone at the Best Buy Mobile store.  SARA CALDWELL/STAFF
Nine-month-old Derrick Hall, Jr. (center) stands and leans against a counter as his mother Kiara Cohen (left) waits for Cherelle Cuencas (right) to set up a replacement phone at the Best Buy Mobile store.

A fraction of the size of the regular Best Buy, the store in the mall sheds the music, games, appliances and electronics to focus on phones and tablets, a format that the retailer launched in 2006.

“Sometimes you get a little sidetracked when you go into the big store,” Jones said. “They pretty much have everything you need here.”

Open for nearly a year, the Best Buy mobile store was the first of the big-box retailers to set up a format store in the Augusta area. Walmart, planning a grocery store for a vacant Food Lion in Martinez, is going to be the second.

First introduced in 1998, there are now about 200 Walmart Neighborhood Markets in the U.S. They average about 38,000 square feet and employee 95 associates. A typical Walmart Supercenter is 182,000 square feet and employees about 300 people.

Walmart spokesman Bill Wertz said there is no timeline for when the Martinez market will open, but it will go into the 35,000-square-foot Food Lion in the Village at Furys Ferry shopping center on the corner of Furys Ferry and Evans-to-Locks roads. Food Lion closed that store about a year ago.

Last week, the Wall Street Journal reported that the head of Walmart’s U.S. Division, Bill Simon, said the corporation plans to open 115 Neighborhood Market stores this fiscal year.

The Martinez store will be the fifth in Georgia. The first opened in Lawrenceville in June 2012.

Because the capital expense and size is less than a full supercenter, Walmart has more flexibility on where it can place the market concept stores, Wertz said.

Retailers first tested the waters nearly a decade ago by opening smaller-scale establishments in mixed-use centers with blended commercial and residential space, said Daniel Butler, the vice president of retail operations for the National Retail Federation.

Though not locally, major retailers such as Target, Kohl’s and Gap have rolled out smaller design concepts nationwide.

“A lot of retailers are finding small-footprint stores are profitable in any given market,” Butler said.

There’s less of a risk for business owners, Butler said, because the initial investment isn’t as great. Other factors, such as demographics or incentives, also weigh in to make a company’s decision on whether to locate in a specific spot.

“When the economy really went under in 2008, the large boxes started downsizing,” said Columbia County Development Services Director Richard Harmon. “Because of the economy, you’re probably going to see a trend in this.”

There are 410 Best Buy specialty stores in the U.S. The store in the mall is only 1,800 square feet, compared to 45,000 square feet for the Best Buy in Augusta Exchange.

Billy Slusser, of Hephzibah, came into the mobile store for pricing information on tablets.

Though Slusser had visited the larger store several times, he’d never before shopped at the mobile site, he said.

“I think it’s the future of Best Buy, quite honestly,” Slusser said.

Best Buy will launch a dozen more of the mobile-format stores in 2013, said Best Buy spokesman Jeremy Baier.

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LeConteSkier 03/16/13 - 03:52 am
What about the 15th Street

What about the 15th Street Walmart?

countyman 03/16/13 - 04:40 pm
I don't think Dr. Azziz

I don't think Dr. Azziz believes the Walmart is upscale enough for the new GRU, and it might be another grocery store instead.

Darby 03/18/13 - 09:23 pm
Good for Wal-Mart....

The key to survival in today's market is to find ways to fill a niche. It's not that easy with the economic geniuses in DC throwing roadblocks in the way of free enterprise at every turn.

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