With the recession still in full swing these days, retailers continue to try and entice consumers into stores with discounts, special programs and new and improved gimmicks to ensure sales don't decline to drastically. So, in that sense, does it sound logical that some retailers are actually opening new stores? In some ways this may actually make sense, as long as you still to small, efficient and highly profitable.
OfficeMax, Inc. (NYSE: OMX), Best Buy, Inc. (NYSE: BBY) and others are opening concept stores with a very limited selection of items in some markets and areas where full-size stores would be a huge risk. Best Buy has it Best Buy Mobile concept stores filled with high-margin wireless accessories and commissioned wireless handset and contract sales, and OfficeMax is launching stores with a selection of extremely popular items in stores as small as 2,000 square feet.
Even home improvement retailer Lowe's, Inc. (NYSE: LOW) is getting in on the act, with store ranging from 60,000 to 80,000 square feet instead of the normal 120,000 square feet or so. With the consumer holding back dollars, is it the time to experiment with new store formats? Sure. Retailers need to find newer channels that will stay successful even without a recession and sometimes the best merchandising efforts don't come from big-box formats, but more personable and easier to get in-and-out formats like these newer boutique-size efforts.
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