Saturday, September 11, 2010

The Future of Big Box Growth...

One of my students observed the other day that the number of large retail buildings (big boxes like Lowes, Kohls and Walmart) being built seems to have really slowed.  I agreed on an anecdotal level because you just don't seem to see as many new big boxes under construction.  

If this is the case, then it obviously could have a huge effect on land use patterns since big boxes where the anchors for so many commercial development sites over the last two decades.

All of this led me to a recent guest post on the Zero Hedge blog that includes some fascinating insights into the future of big box development:

Retail America has run directly into a brick wall. Below are charts detailing the expansion history of four of the most admired retailers in America. Lowes grew their store count from 600 to 1,700 over the course of the decade, a 183% increase. Wal-Mart grew their store count from 4,000 to 8,500, a 113% increase. Target grew their store count from 1,000 to 1,750, a 75% increase. Kohl’s grew their store count from 300 to 1,050, a 250% increase. Same store sales are the true measure of a retailer’s health. When comp store sales are +5% or better, retailers make substantial profits and confidently build new stores. As the charts below clearly show, comp store sales have been in a substantial downtrend since 2006. The new stores that have been built in existing markets are over cannibalizing their existing stores.

Lowes has 500 more stores today than it had in 2005, $4 billion more sales, and $1 billion less profits. Target has 340 more stores today than it had in 2005, $12 billion more sales, and the same profit. Kohl’s has 240 more stores than it had in 2006, $1.6 billion more sales, and $100 million less profit. Only Wal-Mart has kept the profits flowing, mostly due to its international expansion. The tough times have only just begun for these retailers.

These are some very startling numbers.  If accurate, then the whole commercial development system of anchor store, sub-anchors, narrow bays, and outparcels is unlikely to reappear anytime soon on any level approaching the past.

--Chad Emerson, Faulkner U.

http://lawprofessors.typepad.com/land_use/2010/09/the-future-of-big-box-growth.html

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Comments

Seems like your posts are mirroring my work! I've also got a work in progress that addresses the existence of abandoned big box stores. Here's an abstract:

Big box stores, the defining retail shopping location for the majority of suburbs in America, are being abandoned at alarming rates, due in part to the economic downturn. These empty stores impose numerous negative externalities on the communities in which they are located, including blight, reduced property values, loss of tax revenue, decrease in social capital, and environmental problems. While the academic literature has addressed prospective solutions to prevent abandonment of big box stores, this Article asserts that local zoning ordinances can be used to alleviate the harms imposed by the thousands of existing, vacant big boxes. Because local governments control land use decisions, and thus made deliberate determinations to allow big box development, this Article argues that those same local governments now have both a civic responsibility and an economic incentive to find alternative uses for these “ghostboxes.” With an eye toward sustainable development, the Article proposes and evaluates a number of possible alternative uses, including adaptive reuse, demolition and reconstruction, and demolition and regreening. The Article concludes by considering issues of financing, and proposes a series of metrics that local governments can use in deciding which of the possible solutions would be best suited for their communities.

Posted by: Sarah Schindler | Sep 15, 2010 7:51:45 AM

The Land Use Clinic has a guidebook on Big Box development our our website:

http://www.law.uga.edu/landuseclinic/research/bigbox07.pdf

We last updated it in 2007 - sounds like it's time for a revisit!

Posted by: Jamie Baker Roskie | Sep 15, 2010 10:07:31 AM