Sun, Aug 14, 2005

Retail Revolution

NADIA ALVARADO
Observer-Dispatch

NEW HARTFORD -- The category killers are not only coming, they're already here.

And we invited them.

A driver crossing Commercial Drive on the new Judd Road can see the scope of the category killers - what retail experts call large national chain stores that have the potential to overwhelm local specialty stores in areas such as electronics because of their lower prices. Over here, a Best Buy, over there, a Gander Mountain. There's a Chicago Grill, a Barnes & Noble and a PetSmart.

Category killers all. And none of them existed here three years ago.

The local retailing scene is increasingly dominated by national-chain retailers and restaurants that sell a specific set of products for less, saving shoppers dollars but posing immense challenges for locally-owned businesses. Census figures show the overall number of retailers is dropping, and retail employment along with it.

Who's most responsible for the changes? Shoppers themselves, according to retail experts.

Today, as more people put a premium on saving both time and money, expectations have changed for what a retail store should offer, how it should operate and when it should be open for business, Utica College sociology professor Polly Smith said.

"For many purchases, people want to run in and get what they want and not have to go through the mall," Smith said. "Most go straight to a specialty store because they're pretty sure they'll have what they want."

Sal Mercurio has lived in the Utica area for nearly 75 years. He loves technology, especially computers. Mercurio has adapted his shopping habits as new stores that carry electronics become available.

In the 1960s, "when the New Hartford Shopping Center opened," Mercurio said, "it was quite a big thing because it was the first shopping center in the area. It had a Sears, drug store, grocery stores and a bank."

In 1980, "when Sangertown Square opened, I followed Sears there. I prefer enclosed malls because of weather. You can park your car, walk and sit and have coffee or lunch and relax."

In 2002, Mercurio started shopping at Consumer Square when it opened and it is now one of his favorite shopping destinations for technology.

"The service is excellent," he said of stores at Consumer Square. "The only frustration I might have is finding an employee. Sometimes it might take a long time to get the right person, but when you get them, they're great. These stores coming in give us a great variety, the experience is tremendous and the technology is just super."

Yet while shoppers such as Mercurio say they are pleased, the overall impact on the local economy is more complicated. Despite the development of more than 700,000 square feet of retail space in the past three years, 2,100 fewer people are employed in the retail industry locally today than in 1990, according to state data.

On one level, that decline reflects the loss of 15,000 Oneida County residents in the 1990s after Griffiss Air Force Base closed and other large employers left, a transition that took its toll on the local retail scene. Population only now is starting to rebound.

What's also going on, however, is a shift in shopping habits toward larger stores owned by national chains. According to retail experts, shoppers might say they prefer locally-owned stores, but their actions indicate otherwise.

"It's a quality-of-life question," said John R. Logan, a distinguished professor of sociology at Brown University and the co-author of Urban Fortunes: The Political Economy of Place.

"What kind of retail do people want?" he asked. "People tend to want a larger selection and lower prices. Many consumers don't really value personal attention or are willing to pay the cost. There's a contradiction between what people think they want and what they're willing to pay for."

New Hartford Shopping Center reflects changes

As local businesses face increasing competition, think of New Hartford Shopping Center as their Alamo. Home four decades ago to Sears and other national and regional chains, the strip mall now hosts mainly locally- based stores whose owners hope good customer service and knowledge of the market can stave off further defections to the Targets and Gander Mountains out on Commercial Drive.

Some experts don't believe the locally-owned stores can avoid the fate of Davy Crockett. If they do, they're going to have to make adjustments, said William Morris II, the owner of the New Hartford Shopping Center. His retailers are not required to open Sunday, since for many small-business owners, that's the only opportunity for a day away from the shop. But he wonders if it's time to revise the policy to keep up with the increasing amount of competition in New Hartford.

"The development around Sangertown Square was limited," Morris said of the mall that opened 25 years ago. Now, "the development by Commercial Drive is incredible. Everyone wants to be by Wal-Mart. (My) retailers complain there are no shoppers here at night or Sunday, but they're not open. Wal-Mart has changed retail. For better or worse, remains unknown."

Wal-Mart spokeswoman Karen Burk, reached by telephone Friday at the retail giant's Bentonville, Ark., headquarters, says the change is for the better.

"We always think it's a positive for the community," Burk said. "We only go into communities where they want us."

A number of retailers operating near Wal-Mart's 1,816 SuperCenters or 1,289 general merchandise stores have found ways to co-exist, Burk said. In some cases, they offer products or services that Wal-Mart does not. In others, they move close to a Wal-Mart to benefit from the proximity to the busy store, boosting that community's economy, she said.

"It doesn't have to be mutually exclusive," Burk said.

Wal-Mart entered Central New York in the early 1990s. It opened stores by mid-decade in Utica, Rome and Oneida, and later in Herkimer. The New Hartford store, one of the chain's largest, opened three years ago and now sits at the heart of the town's newest retail growth. Large home-building stores Home Depot and Lowe's arrived eight years ago, while Consumer Square arrived in 2002, The Orchard last year.

Census figures compiled in 1997 and in 2002 show a drop between those two years in both the number of retail establishments in the Utica metropolitan area (from 1,225 to 1,136) and in the number of retail workers (from 14,847 to 14,637). More recent figures are not available, but retail experts believe such declines reflect the impact of shifting shopper habits toward fewer, larger stores.

"When large stores expand, smaller ones are going to decline or close," said Mark Barbano, a regional economist for the state Department of Labor. "Larger stores may be more efficient than a lot of small stores."

One store that closed because of competition from chain stores and discounters was My Sister's Secret Gift Shoppe in the village of New Hartford, which shut its doors last spring.

The closing saddened co-owner Colleen Wuest.

"We had a lot of regular customers and had a lot of people we got to know from having the business and we made friends," Wuest said. "I just think that rapport you establish with people through having a business starts to dissolve when the business closes."

'The whole concept of shopping has changed'

Some experts say further closing of local retail businesses is inevitable because they can't survive with people stopping by only every once in awhile.

Rebecca Marion, a spokeswoman for the Retail Council of New York State, said "what's going on in retail, the growth and trends, are all driven by consumers. There are a lot of different variables at play. Life is more fast-paced; people are working all the time. That's brought challenges to small shops only serving one good or service."

Smith, the Utica College sociology professor, agreed, saying the pace of life today has created a new sense of urgency when it comes to shopping, she said. Not only are local retailers feeling the hurt, but so are shopping malls, she said.

"Around 1985, people could spend all day at the mall," Smith said. "They may not even buy anything. They're not necessarily what people are looking for anymore. The whole concept of shopping has changed."

She also said busy parents manage their time differently than in previous generations, making them impatient when it comes to time spent shopping.

"It takes more time now to raise children," she said.

Other experts say the disappearance of local retailers reflects the rise of savings-driven shopping. Consumers have signaled what they want through the use of their pocketbooks, no matter how much they say they want to support "mom-and-pop shops."

Not that all shoppers are enchanted by the new arrivals.

Dorothy and Burke Muller of New Hartford are retirees who say price is the main reason they'll shop at a particular store. But they sometimes are willing to pay a little more for customer-focused attention.

Muller said she could have a watch battery replaced at Wal-Mart, but has more faith in a local retailer, The Harris Brothers jewelry store at New Hartford Shopping Center, because of the personalized service she gets from employees such as manager Allan Foote.

"Allan keeps a date of when the battery was changed and if it's defective he'll replace it for free," Muller said. "It's about a dollar difference but, to us, it's worth it."

Foote, who's been in the fine jewelry business for 24 years, said personal attention is an integral part to the success of the store.

"Customers have confidence in the shop," Foote said. "We maintain a respectful approach to our customers. We're often the first to know of pending engagements, and (customers) feel confidence in our ability to honor their confidentiality, especially in a small community."

Not everything works.

When Andi Dinerstein owned Noah's Ark children's store in the New Hartford Shopping Center, she realized people's shopping habits were shifting. Parents bought fine clothing for their children only around holidays, and that was not enough to sustain her store.

"I really couldn't compete with larger chains and I really didn't want to," Dinerstein said. "They can only stay in business with loyal customers and if they have something no one else can offer. If you don't have a gimmick, you don't have anything."

'Not the sleepy little town it once was'

Others in New Hartford note that retail sprawl has affected quality of life.

"The dynamics in New Hartford began to change when Sangertown Square opened in 1980," said Lt. Timothy O'Neill, who has been with the New Hartford Police Department for 22 years. "That became the impetus for future growth in this town."

Becoming a shopping mecca for surrounding areas means a greater volume of traffic, he said.

"It's a snowball effect," O'Neill said. "We get about 1,600 motor vehicle accidents a year. Most of the time, they don't involve people that live in Oneida County. Over 100,000 vehicles are coming and going a day. This is not the sleepy little town it once was."

The arrival of new retail stores has made New Hartford a destination for shoplifters as well as consumers, O'Neill said. Shoplifting hurts customers as well as retailers, but it especially hurts mom-and-pop shops because they don't have a larger entity to help them offset their financial loss or fund a loss prevention plan, he said.

The long-term picture

What happens to New Hartford in the long run? Will the category killers win? Should they?

Jerry Cunningham is an 80-year-old, life-long resident of New Hartford. In his lifetime he's heard and seen all the debate that surrounded construction of the New Hartford Shopping Center, Sangertown Square, Consumer Square and The Orchard.

"My theory is, there's only so much money going to be spent in this area," Cunningham said. "Largely, mom-and-pop shops are gone and, if not, they will be soon. In another 25 years, these stores will be gone because they will not be able to compete down the road. I think New Hartford will end up with a lot of empty buildings."

A longtime critic of suburban sprawl predicts an even more dire scenario.

James Howard Kunstler of Saratoga Springs, author of books including "The Geography of Nowhere" and "The Long Emergency," suggests residents of New Hartford, or any similar community, view big boxes and category killers as "predatory swarm organisms, like clouds of locusts that descend on a locality, pick it bare and then depart.

"Any continued suburban development now in the pipeline will have a tragic outcome," he said. "They're definitely setting themselves up for disappointment."

Ultimately, we will decide what happens. Where people choose to spend their money and time will determine who stays in business and who does not. And we might eventually turn to a force potentially stronger than even the category killers - the Internet.

"I would think in the next 25 to 30 years the Internet will take a big chunk out of the retail market," Utica College's Smith said. "The reason it hasn't yet is because people are afraid of putting their debit cards online. Once that's secured, it'll be huge. I don't think there's any turning back the clock at this point."

Unless she's accompanying her daughter Vanessa, 79-year-old Macey Blasz of New Hartford shops very little. On shopping outings to Consumer Square, Blasz has "discovered new and different items because of the variety, things I've never heard of, like name brands."

But Blasz has also seen stores she has lived with for decades disappear. She's live in New Hartford almost 60 years, and realizes there's no turning back the clock.

"In 2030, I bet the big corporations will take over," Blasz said. Then adds with a laugh, "and I'm grateful I won't be here."

http://uticaod.com/archive/2005/08/14/news/7041.html

©Utica Observer-Dispatch 2005

 

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