The time is ripe for remodeling

Store Equipment & Design, August, 2000 by David Litwak

A good economy and increased competition has resulted in a remodeling boom like no other.

By all accounts there has been a flurry of remodeling activity over the past year and the number of stores under the tarpaulins is greater than ever.

"I think that because of the economy there's been a lot of action going on -- people are really starting to address their needs," says Scott Spencer, director of marketing at Shaw Designs, Detroit. "That's a reflection of the economy and a reflection of the competitive market as well. The two words that worry people are 'Wal-Mart' and people are trying to reposition themselves before Wal-Mart moves into their area -- kind of reestablishing their whole base, their whole market."

Whether it be Wal-Mart or Target or Kroger, operators are often motivated to do remodels as a pre-emptive strike to ward off coming competitors. Not only does incoming competition spur remodels, but so too does a retailer's realization that no matter who else comes into the neighborhood, he will always be competing with himself in the minds of customers. A retailer who doesn't change his look and freshen up a store, or give his clients the best, most up-to-the-minute merchandising and services is bound to lose customers to whomever else comes along.

"It's a combination of local and regional operators stepping up to the plate and deciding that they need to have a strong image and strong marketing within their areas to defend those areas," says Terry Roberts, president of The Design Associates, Pittsford, N.Y. "I think it's an indication of the cycle that the supermarket business goes through, how and when they do their remodels and how they react to changes in consumer shopping patterns."

He says that in some instances it's reactive and in some instances it is very much proactive, being sure that they establish a very strong marketing presence to protect their area from competition coming in.

Also driving the remodeling craze is the continual wave of consolidation within the retailing community. As one company buys another the new owner often is in a rush to spruce up stores and convert them to its own banner. While this is very good for design firms, the timetable involved often strains everybody's resources, both the design firm's and the retailer's.

There used to be a sort of unwritten guideline that a supermarket would go about seven years before it received any kind of substantial remodeling. That guideline seems to be no longer used. Many retailers, unless financially strapped, seem to be attending to the physical needs of their stores in a shorter time frame.

"I see that anywhere from three to five years retailers are going in and just doing some sprucing up, such as painting existing decor and putting up new signs," says Bruce Dych, president of Design Fabrications, Inc., Troy, Mich. "By about seven years things are looking pretty darn tired. I see chains and independents, whether it be lifecycle- or competition-driven, moving into earlier remodeling cycles."

Dych believes retailers should take their time when remodeling the store, doing it slowly with minimal interruption to its operation. A store should never be closed during a remodel, he says, or on rare occasions closed only for a day or so. "For strictly cosmetic remodels you'd want about eight weeks from start to finish; however, once they start doing any interior design with floor tiles and lighting you'd want to have about 12 weeks. Retailers are much more sophisticated now: They're aware that these things take time. I see a more cooperative attitude as far as getting the design firm involved earlier."

If there is one overriding theme of most remodels it is to place additional emphasis on the store's superior perishables. From produce to prepared foods, retailers are looking to these departments to differentiate themselves from their competition, and many are looking to set up decor to help these showcase departments stand out from the rest of the store.

"Most people are addressing their perishables and service departments; they are really putting more of an emphasis on these departments," Spencer says. "They are moving them into one side of the store, putting all the departments next to one another and putting more decor dollars into these areas. They are creating brand identity, names and logos for each of these departments, things that can be used in their advertising, and set each department apart."

A goal of many of the remodels is to create separate sections among many of the service departments. The dichotomy is that retailers have physically put the departments together in one area of the store, but are then trying to create separate identities for each of them. The prevailing theme for many of today's remodels is to create the look and feel of the European or South American marketplaces, where each type of department is a separate shop.

"My customers are fairly concerned about branding these departments, creating something new and fresh. I think the day of creating one simple graphic and putting that over each department is over," says Spencer. "It goes back to the brand issues of having everything work together but having the main moneymakers stand apart. It takes a lot of thought, a lot of input to create these points of distinction, creating a store-within-a-store feel."