December 14, 2003
Fighting the chains:
Business battles big-box stores
Smaller firms find ways to get customers
By BILL ECHLIN
Record-Eagle staff writer
TRAVERSE CITY — When “category killer” stores come to town,
independent shops have to find new ways to survive.
A wave of big boxes is headed to Traverse City , including Lowe's home improvement store, Kohl's department store, Michaels arts supply store, and Bed Bath & Beyond, all set to open in 2004 or 2005. That follows the August 2002 opening of a Best Buy store.
Experts say the way to survive competition from big chains is avoid going head-to-head on product and price.
“The idea is to be rare and unique,” said Bryan Crough, director of the Downtown Traverse City Association.
A market study of downtown in the early 1990s recommended focusing on clothing, accessories, food for home consumption, restaurants, home furnishings and galleries.
“It turned out they were right on the mark,” Crough said.
Consultant Doyle Hyatt said in 1993 many larger businesses then in the district would soon be gone — car dealerships, movie houses, dime stores, department stores and tire dealerships. Most have left, replaced by shops better able to cope with chains and malls, Crough said.
The Grand Traverse Mall opened in 1992 followed by Grand Traverse Crossing in 1996. After that, downtown Traverse City lost several larger stores, including J.C. Penney, Woolworth, the Milliken department store, Ben Franklin, two tire shops, two office supply stores and Kurtz Music. Today nearly all available space in the district is filled or spoken for.
Since 1995, product lines with strongest growth in terms of space downtown are home furnishing, apparel and accessories, gourmet foods, sporting goods, home decoration, and hair-cutting services, the DTCA found.
The shift was toward businesses with pricier product lines, Crough said.
There is a high-income market in the Traverse City area, according to U.S. Census data. Estimated median Grand Traverse County household income in 2000 was $44,515 — 1.5 percent less than the state and 6 percent higher than the national median.
Horizon Books beat back chain competition with a combination of downtown sites in Traverse City , Cadillac and Petoskey, smart buying, listening to customers and providing a nice atmosphere, sales manager Amy Reynolds said.
When its lease was up on a Cadillac location in a strip center, Horizon moved to a large space in downtown Cadillac. That proved to be a major success, Reynolds said.
But it's not easy to fight the chains.
Barbara and Bruce Buelow, owners of the former Creative Outlet arts and crafts store on U.S. 31 South moved to a smaller space on Eighth Street when they learned a Michaels would move in near the new Kohl's, now under construction along the same stretch of highway.
“We moved partly because of the traffic, high rent and a need to get away from and be different than the new Michaels,” said manager Michelle Hubbard, the Buelows' daughter. “We were primarily arts and crafts, but now it's more home decor and specialty crafts.”
Brown Lumber Co. shifted from a mix of retail and contractor sales to nearly 90 percent contractor sales when Home Depot entered the market in 1997. Brown's Phil Cochran Jr. said his company will meet the competition from Lowe's with a good understanding of contractors' needs.
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