At today’s shareholder meeting, Wal-Mart has announced that they are scaling back their new store growth, starting with this year:

Thomas M. Schoewe, the chief financial officer of Wal-Mart, said the company is “committed to providing better returns,” and added, “The message you are hearing today is that we have found a real nice balance between appropriate return and the growth of your great company.”

Mr. Schoewe called the reductions a “moderation” and emphasized that Wal-Mart will still add 20 million square feet of new store space this year. But the cutback is significant because each Wal-Mart supercenter can book sales of $100 million a year, and the giant stores have propelled much of Wal-Mart’s growth.

This year, rather than opening 265 to 270 stores, Mr. Schoewe said, Wal-Mart will open 190 to 200. For the foreseeable future, it will open 170 supercenters a year, well below its average last year.

More from the New York Times: Wal-Mart Scales Back Expansion Plans.

The bulk of Wal-Mart’s increase in sales, over the past few years, has been attributed to new store growth. Scaling back their growth is a large turnaround for the retailer, regardless of how they classify it.

One of the reasons I started this site is because of how much I enjoy going through planning and zoning board minutes/agendas to spot new retail development in the area that I live in.

Now there is something interesting brewing in my town, Middletown NJ. On the agenda for the June 6th Planning Board meeting is this proposal:

#2007-200 – Bowen Development Company, Block 807, Lot 1, 1230 Highway 35, located in the
B-3 Zone. Applicant is seeking major site plan and minor subdivision approval for a 14,708 sq.ft.
pharmacy and a 9,600 sq.ft. retail building.

A quick Google search for Bowen Development Company comes up with this SEC filing from Walgreens, showing that Bowen Development Company is one of their subsidaries.

What is interesting to me is that the address in the proposal is actually the exact address of a longstanding Friendly’s restaurant. What is happening to that eatery? Is it being closed, moved, or redeveloped?

Walgreens, via Bowen Development Company, also has an application in Franklin Township, NJ for a proposed location. Public comment was in March with the application on the agenda for their meeting next week.

Walgreens is currently working on redevelopment of a former restaurant in Washington DC to create their first location within that city. It appears that they have been working closely with local officials and historic groups to create a design that satisfies the local community. Good to see a retailer who is that involved with the community.

(More coverage of the Washington DC development from examiner.com.)

What is to come of the Friendly’s location and the Walgreens proposal? We’ll find out more next week.

Last week, the City Council of Kaua’i, Hawaii, passed an ordinance restricting retail construction to under 75,000 square feet:

A 75,000-square-foot floor-area limit on retail or wholesale operations. Business square footage would be added together if establishments are within 800 feet of each other and sell similar goods under common management, share check-out counters, or are under common ownership — meaning, for example, that a single retailer could not build two 75,000-square-foot stores around a single parking lot.

While the island already has Costco, Wal-Mart, and K-Mart, this bill seems to be aimed squarely at Wal-Mart’s plans to increase the size of the location there from 119,000 square feet to almost 200,000 square feet. The City Council wants to preserve the character of the small island community and preserve the local, mom and pop stores, that make up the community.

I recently commented on the plans by several retailers to build smaller concept stores. Anti-big box bills like this are just another reason why retailers need to have several construction ideas in their portfolio. One size does not fit every community.

More coverage of the bill from the Honolulu Advertiser. The quote above is from their coverage.

The IKEA in Draper, UT is opening on Wednesday, May 23 and, like other IKEA openings, this grand opening will be big:

Starting May 21, two days before the Swedish home furnishings giant’s grand opening in Draper, customers can start pitching their tents outside the new blue and yellow building at 67 W. IKEA Way.

Upwards of several thousand visitors are expected to throng the store’s official opening at 9 a.m. Wednesday, which will feature a traditional Swedish log-sawing ceremony and the raising of U.S., Swedish and Utah flags by various dignitaries, said Joseph Roth, director of public affairs for IKEA North America.

Gift certificates of between $10 and $250 will be given to the first 2,500 visitors on May 23, while free armchairs and heart-shaped cushions will be given to the first 100 adults and 100 children respectively.

(From the Daily Herald, IKEA gears up for grand opening: Thousands expected on opening day. The Daily Herald article also has a link to a Youtube video showing a tour of new store.)

Just how big of an impact does the IKEA opening have on a local community? Maybe this is one indication:

With such keen interest in the new store, Draper has spent much of the past year preparing for IKEA’s opening day. Neither IKEA nor Draper would provide an estimate of how many people the company is anticipating will show up the first day. Draper said only that it is excepting a crowd in the “high thousands.”

Draper officials, including its economic development director, the city’s traffic engineer and representatives from police, fire and highway patrol departments, traveled in June of last year to Canton, Mich., to experience an IKEA grand opening firsthand.

From opening day through Memorial Day, there will be no less than 35 police officers at the store to make sure things run smoothly, said David Baird, Draper City economic development director.

While the first six days are expected be very busy, Baird of Draper said he is expecting a high level of customers for weeks - even months - after that.

“We’ll have some pretty intense traffic in the area for at least six weeks,” he said. “And on weekends for quite a while.”

(From the Salt Lake Tribute, IKEA defines big.)

The opening of this store a long time coming, but has been met with opposition from several groups in the local community. As another story from the Daily Herald adds:

“IKEA definitely means do-it-yourself. They’re the biggest peddler of junk besides Wal-Mart,” said I.M. Home founder Craig Knott, who hosted a “The Bachelor” casting call on Friday to boost foot traffic to his store.

“My wife and I shopped at IKEA when we lived in Chicago. We got some furniture like dressers, beds. Not one piece survived the move back to Utah.

“Once people realize they have to put everything together, and the furniture doesn’t last, the allure will pass.”

(More from the Daily Herald, IKEA to open in Draper May 23.)

If anyone attends the grand opening and takes photos, please share them with us!

If you live in remote parts of Alaska, your shopping options are limited: either you are shopping at the local village store, which may have limited selection and high prices, or you are ordering from a Wal-Mart or Fred Meyer 400 miles away:

Local prices are so high and inventory so sparse that Seitz, like many Alaskans living far from the road system, buys nearly all her food and household staples from big-box chain stores in cities hundreds of miles away.

At least once a month, she sends her shopping list to Safeway in Fairbanks and pays a small airline to fly her groceries across 300 roadless miles to the Athabascan Indian village of 100 people on the banks of the Yukon River.

The business generated by such customers is impossible to quantify, but it’s big enough that several stores, including Wal-Mart, Home Depot and Best Buy, devote whole mail-order departments to more than 200,000 rural residents spread over an area twice the size of Texas.

This is a very interesting way for these large retailers to provide a solution for a unique situation.

More from CNN: Bush mail brings big-box stores to Alaska’s hinterlands

Christian Trejbal has an editorial in yesterday’s Roanoke Times where he offers his opinion on the big box battle in Blacksburg, VA.

Opponents’ strategy right now — aside from hosting a bake sale fundraiser outside Gillies yesterday and today — is a proposed ordinance that would require large retailers to get council approval before building. It would not ban a big-box, but it is hard to imagine the current council signing off on one.

Unfortunately for the opponents, Virginia courts frown on retroactive standards. They must be kicking themselves that they did not think to pass a law years ago.

He talks about what kind of community Blacksburg is and what big boxes mean to the community.

More from Roanoke.com.

The Wall Street Journal is talking about the smaller sized buildings that retailers are buildingre. Focusing on the electronic retailers Best Buy and Circuit City, the article states that the average size of their new buildings may be 30-40% smaller than their current prototype.

Two factors primarily are fueling the smaller-store phenomenon: Consumer-electronics chains need less space for merchandise as some products get smaller and shoppers increasingly buy music and movies online. And Best Buy and Circuit City, which operate a combined 1,500 U.S. stores, now need smaller structures to penetrate fast-growing suburbs, rural areas and gaps between their larger stores — places that can’t support one of their superstores.

“We’re taking a square footage and a revenue number for a market and, instead of trying to force it into one large box, we’re spreading it across smaller boxes that are more convenient,” Best Buy’s vice president of real estate, Pat Matre, says.

Do these smaller store concepts speak volumes about the state of the electronics industry today? The article alludes to the high volume of movies and music that are bought online, thereby further reducing the amount of space needed for this media in the store.

It seems that retailers are starting to realize that one size does not fit every market. Other retailers, like Home Depot and Wal-Mart, have experimented with smaller store concepts that have allowed those retailers to get in to neighborhoods or areas that they previously would not have been able to get in to.

Kohl’s outlined some of their short-term growth plans at last week’s shareholder conference in Wisconsin. Projections are for 115 stores to open up in the next year and more variety within the store footprint. Reports indicate that they will open up more multi-level stores and more stores that are 20,000 square feet smaller than their traditional footprint.

Realizing that one size doesn’t always fit all, the three footprints allow the retailer to compete in a variety of markets. While their traditional, 88,000 square foot layout has done them very well up until this point, with the amount of growth that they project, the larger, multi-level format allows them to get a better foothold into urban areas while the smaller, 68,000 square foot store allows them to extend their brand into lower volume areas. They experimented with these layouts in 2006, opening a nearly 150,000 square foot store in a former Macy’s in Jersey City and opening up a few dozen of the smaller layout throughout the country.

With the amount of former Mervyn’s locations that Kohl’s is projected to take over, expect a lot more of the larger, multi-level stores opening in strategically attatched mall locations.

Unclear if the 115 store number is simply the number of stores that are opening in October, or if that includes early 2008 openings as well.

More from Milwaukee Journal-Sentinal, Reuters and AZCentral

Wal-Mart has outlined more details on their plans to open stores in India by 2008. Through a joint-venture with India’s Bharti group, the retailer looks to launch in India in 2008 with 75 stores projected within 5-7 years.

India has some pretty tough regulations over the retail/wholesale industry which prevent foreign based companies from establishing shop in the country without going through a joint-venture with an India-based company. Wal-Mart’s intentions to enter the market there have been known for a few months, but on Thursday of last week, more details emerged.

The retailer has it’s sights set on a mid-2008 launch in India, through a joint-venture with Bharti group. The New Delhi-based conglomerate operates India’s largest mobile phone company, Bharti Airtel. After the 2008 launch, plans call for 75 stores within 5-7 years.

Wal-Mart’s international division has had some tough times in some new markets. 2006 saw Wal-Mart pulling out of Germany. How well will the locals embrace Wal-Mart in India?

One bit of information that I find interesting is that the “venture would import only 10 percent of its goods, and source half of the goods from the city where it is located or nearby areas” (source, CNN/Money). Is this an attempt, from the retailer, in playing nice?

The Chicago Sun-Times is running a story with more details about the upcoming expansion plans for JCPenney. As they have previously announced, the focus of their upcoming growth (250 new stores through 2011) is in the off the mall format. But what is revealing is that one of the larger areas of growth is within Chicago.

From the article:

J.C. Penney will open nine suburban, off-mall stores in the next two years, making the Chicago region the biggest market for the retailer’s new stand-alone stores.

[…]

Penney’s strategy is to open free-standing stores near families in growing suburbs that welcome “lifestyle centers” — outdoor malls with restaurants, movie theaters, landscaped walkways and stand-alone stores that have their own parking lots.

The new, one-story stores measure 85,000 to 105,000 square feet, slightly smaller than Penney’s traditional two-story mall stores at 100,000 to 165,000 square feet. The new stores sell no furniture.

“The stand-alone Penney’s stores fit the shoppers’ lifestyle of not wanting to park in a mall parking lot, but to park at the store, run in, do their shopping and go home,” said John Jones, Penney’s district manager for Chicago’s North Side.

(More information, see Penney shifting to off-the-mall strategy.)

I wonder how many of these new stores are going to go into existing markets, either as a replacement for an aging mall anchor, or into an area where they previously had and closed locations.