Population growth shifts to cities, retail shrinks to follow, e.g. Office Depot prototype 5,000 sq ft

From NYTimes writer Stephanie Clifford: "As young Americans move to cities, retailers that grew up in the suburbs are following them.  With little room to expand in the suburbs, retailers, including Office Depot, Wal-Mart and Target, are betting that opening small city stores will help their growth.  'The suburbs are basically saturated with retailers,' said Patrick Phillips, chief executive of the Urban Land Institute, an urban-planning research nonprofit. "And unlike previous efforts, they are doing it the cities’ way.  The retailers studied city dwellers with anthropological intensity and overhauled things as varied as store sizes (the city stores are a small fraction of the size of the suburban ones), packages (they must be compact enough for pedestrians) and signs (they are simple, so shoppers can get in and out within minutes).

"Office Depot has revamped its stores to create an 'economically defensible' way of expanding into cities, said Kevin Peters, Office Depot’s president of North America.  The main objective for shoppers in cities is speed.  So a store in Hoboken that is a model for the company’s urban branches is 5,000 square feet, about a fifth of a normal Office Depot.  The shelves are about six feet high, much shorter than in a suburban store, so visitors can navigate quickly.  The signs above the aisles are simplified so customers do not waste time interpreting them.  The service desk, where shoppers can send packages or copy fliers, takes up a big chunk of the store, so no wandering is required.

"A typical Office Depot has 9,000 items for sale.  This one has 4,500.  It sells immediate-replacement items (a pen) versus stock-up items (a 25-pack of pens).  At sites where Office Depot has replaced one of its big-box stores with a small store, Mr. Peters said, the smaller iteration has retained 90 percent of the sales of its bigger predecessor."

"Retailers are now willing to come into cities on the cities’ terms — with all the zoning headaches, high rents and odd architecture — because that is where the growth is. Most large American cities are growing faster than their suburbs for the first time in almost a century, according to a Brookings Institution analysis of census results released last month, largely because young adults are choosing urban apartment life. That population shift, along with Internet competition, have made the car-focused, big-box model less relevant."  Full article here.