Big-box retailers shrink for urban expansion: VIDEO

Having already reached their critical mass in the suburbs, national big-box retailers are making a renewed effort to enter urban markets. But according to the New York Times, this time around, retailers are altering their traditional business models to acquiesce to the demands of city-dwellers, whose population numbers are growing faster than those of suburbanites. The stores are reducing their square-footage, downsizing packages to cater to pedestrians and making store navigation easier to appeal to on-the-run shoppers.

Office Depot, for example, recently opened a 5,000-square-foot store in Hoboken that serves as a model for its urban expansion. It’s one-fifth the size of a typical store, carries half of the usual store’s 9,000 items, and has lower shelves and simplified signs to speed the process. Similarly, Target opened its first ever City Targets yesterday in Chicago, Los Angeles and Seattle. These stores measure 80,000 to 100,000 square feet, half the size of a suburban location, and carry items better suited for city shoppers.

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“You’ll see less 12-packs of paper towels and more four-packs, knowing most people will arrive by foot or public transportation and will have to carry it home,” a Target spokesperson told the Times. For now, these stores are largely experimental, according to Bloomberg (see video above), which noted that Walmart’s urban stores are just 1/12th the size of a typical suburban one.

Since acquiring Duane Reade two years ago, Walgreens has also begun varying items within its New York City stores based on the type of consumer individual stores tend to attract. [NYT]