The competitive nature of retailing requires retailers to closely monitor socioeconomic trends and make appropriate changes in location strategies, marketing and merchandising to meet the demands of customers.  Many of these changes are internal to the operations of the retailer and have little if any direct impact on communities.  At least three changes and trends, however, bear watching by community leaders interested in retail development. They are big-box retailers going small, the development of lifestyle centers and the growth of ethnically-oriented retailers.

#1 Big-Box Retailers Going Small - Some major big-box retailers and restaurants are opening smaller stores to better serve customers by enabling them to shop more efficiently.  Wal-Mart’s Neighborhood Market is 40,000 square feet rather than the normal 200,000-square-foot Supercenter. Other retailers implementing smaller concept stores are Best Buy, Home Depot, Lowe’s and Office Depot.  Others such as Chili’s and Applebee’s are also downsizing to better serve smaller markets.

Impact of Smaller Stores - Communities can take advantage of the smaller concepts by working with retailers and developers to locate stores in underserved areas that have not had the demand density to support larger formats.

#2 The Development of Lifestyle Centers - Lifestyle centers are replacing the mall experience.  Time-starved customers can shop at targeted destinations, park in front of the store, walk into a pedestrian friendly environment, make their purchase and leave.
Lifestyle centers are typically open-air complexes of dominant anchors such as big-boxes, home improvement stores, discount stores and warehouse clubs.

Impact of Lifestyle Centers - While lifestyle centers may not be feasible for small towns, they do offer the potential for larger communities to rehab older enclosed malls and capture sales revenues in a new shopping experience.

#3 The Growth of Ethnically-Oriented Retailers - The influx of diverse ethnic groups is changing retail.  Payless ShoeSource, Marshalls and T.J Maxx, among others, are opening stores in Hispanic neighborhoods.  Other retailers, such as H.E.B., are offering Hispanic-influenced products.  The real estate firm Grubb & Ellis has formed a Hispanic specialty retailing group. But Hispanics are not the only ethnic group attracting retail attention.  Other retailers are seeking to place  stores in locations with strong ethnic populations such as Indian, Korean and Filipino.

Impact of Ethnic Retailing - Ethnic groups provide a large and growing market that have existed in larger cities and are becoming increasingly significant in smaller communities.
They offer opportunities for both national and regional chains as well as smaller local operations.

While there are numerous trends influencing the retail industry, these three point out changes that retailers are making to attract customers.  They also highlight opportunities for communities to more fully serve their trade areas by understanding retailers’ changing needs and taking advantage of trends.