Urban dealers face starker survival options

Home Channel News, May 3, 1999 by John Caulfield

On Chicago's downtrodden South Side, a ramshackle Arrow Lumber is two years into its second half-century, fighting for its life. Its owner of nearly 20 years, Don Beal, says that massive urban renewal may be his company's only chance for survival.

Seven hundred miles away, City Lumber, a hole-in-the-wall lumberyard in midtown Manhattan, is soaring along with New York's burgeoning commercial market. City's owner, Rich Spodek, estimates offhandedly that there's $4 billion worth of remodeling and construction activity going on just within the vicinity of 42nd Street from the East River to the Hudson River.

Two urban dealers. Two very different situations.

It's easy to forget sometimes how operating stores in cities can pose unique opportunities and challenges. It's also easy to forget that the term "metro" is not as all-encompassing as demographers might have us believe.

There's a world of difference between, say, a Contractors' Warehouse in a rundown section of North Hollywood, Calif., that succeeds by selling to customers throughout greater Los Angeles, and Monterrey Hardware, a small store in South Side Chicago that doubles as its neighborhood's gas station.

Home Depot's best sales outlet reportedly is its 24-hour unit in an industrial section of Flushing, N.Y., which can be a little imposing to someone who's not used to seeing concertina wire strung along the outside barriers of a retail building.

Across the country, urban stores are becoming more and more like frontier outposts, providing convenient shopping for locals but constantly under siege by enemy forces that can include escalating rents, gentrification. security problems, an indifferent work force, and -- perhaps most onerous -- a shift downward in the economic conditions of the market being served.

A few years ago, the owners of San Diego Hardware, located in that city's Gaslight district, told me that their neighborhood has changed at least three times -- from good to bad to improving -- over the past two decades. Beal of Arrow Lumber, who was born three blocks from his yard, has seen his neighborhood deteriorate to where "it can't get any worse than this," he said to me last month.

And let's not forget about competition from large retailers that, out of necessity, arc opening stores closer to populous urban centers to siphon off business from affluent homeowners and remodelers in those areas. More often than not, customer loyalty to independent dealers is forsaken in favor of lower prices and broader product selection bigger stores offer.

The options for survival presented by these circumstances to urban dealers are stark. For some, finding business outside of their immediate market has been one answer, as it has been for City Lumber, which ships to construction sites as far away as Virginia, said Spodek.

Other urban dealers are taking a more active role in the community to remind customers of their commitment to the area. For example, the 5,000-square-foot Capitol Home Hardware, which has operated in Ottawa, Ontario, since the 1940s has expanded its services -- like offering free delivery for purchases over $25 -- to reinforce that image.

As I've traveled around the country, I've found that the more identified a store is with its neighborhood, the better its chances are of holding onto its customers. This seems especially true of dealers in economically deprived communities, where disposable incomes are limited and purchases can gravitate to stores with the lowest prices.

The long-term prosperity of urban dealers often hinges on their agility at somehow transcending the ups and downs of their city's economic fortunes.