Retailing in Alaska - includes related article

Discount Store News, Dec 6, 1993 by Laurie Liebeck

Mass retailing has finally discovered Alaska. The nation's 49th state, described by many as the final retailing frontier in the United States, went from being severely understood just a few months ago, to being overstored.

Since early fall, retailing formats that are commonplace in the "lower 48 states" have arrieved in Alaska metro areas of Anchorage, Fairbanks and Juneau, with more on the way. Many consumers are ecstatic about the retail invasion and the numerous shopping alternatives they can now enjoy, particularly because these new invadors features pice tags that resemble those fund in lower 48 rather than the inflated prices consumers hare have been paying due to the lack of competition. Here in Anchorage, shoppers are happy that they will no longer have to travel to Seatlle--two hours away by plane--to enjoy an adequate merchandise selection and competitive prices.

Local businesss executives and politicians are wary about what all of the activity will mean to their cities and the impact that relatively low-paying retail jobs, many without full health benefits, wil have on the otherwise recovering economy. Others are angry that the chain stores and discount retailers will water down Alaska's individuality.

Kmart led the recent chain invasion of this pristine landscape this fall, although it is not thr first general merchandise retailer to land in Anchorage. Fred Meyer has been here for years, operating two tired-looking general merchandise-only stores, one of which is being updated with a grocery store addition. This fall, Fred Meyer added a third store to this market, a combination food and general merchandise prototype store. The new unit is attempting to take a bite out of the grocery market, held firmly by Carr-Gottstein, operator of 13 Carr's supermarket stores throughout Alaska, and to better battle Kmart and Wal-Mart, both of which moved into the market with modern prototype stores. Pace and Costco already have established footholds here as well, each with two units.

Overall, real competition was lacking on the general merchandise side and many mass marketers saw their opportunity to penetrate the seemingly forgotton state of 500,000 people. Anchorage is the larger metro area in the state with 245,000 people, or half of Alasks's entire population.

The new Kmart store in Anchorage is its largest general merchandise-only store, a whooping 145,00 sq. ft. The store is large enough to carry all of Kmart's specialty departments, such as Little caesar's auto service and Music & Movies, plus a liquor store. It also allows for a general storewide enlargement of every department to accommodate the Alaska marketplace and the need to stock more inventory than a store in the continental United States.

The site Kmart chose is on a busy retail strip that the company will develop into a power center. Pace, soon to be Sam's Club, opened its second Anchorage club at the opposite end of the Kmart power center, shortly after Kmart opened in September. Wal-Mart opened two units in Anchorage, one of which is located directly across the street from the Kmart power center. The other Wal-Mart is about three miles away. Toys "R" Us entered the market in November with a site located about a half a mile from Kmart and Wal-Mart, which happens to be across the street from one of the city's two Costcos.

Still to come is another Kmart discount store and other Kmart subsidiaries such as Borders Books & Music, OfficeMax, The Sports Authority and maybe even a Builders Square.

Six to eight Payless Shoe Source outlets also are slated to open soon in Anchorage. In addition, Bon Marche, and upscale department store operator, was reportedly looking at a downtown Anchorage site adjacent to a downtown mall that already has a JCPenney and the state's lone Nordstorm. Sears, and a local department store operator, Lamonts, also operate stores in Anchorage, as does Eagle Hardwar, a retail-oriented home center chain with three units, Pay-Less Drugs, which Kmart is now selling, Kay-Bee Toys, Waldenbooks, another Kmart company, and a few others. Burlington Coat Factory just spruced up its only Anchorage location, having added 20,000 sq. ft., in preparation for the increased competition.

Wal-Mart will open soon in nearby Wasilau and is fighting local groups in the bedroom community of Eagle River, 15 miles from downtown, that don't want a Wal-Mart in their residential neighborhood. Wal-Mart also has been bearing labor union animosioty in Alaska for not using union workers to build or work in its stores. Fred Meyer also had its troubles with the unions, particularly in Fairbanks, where some park benches encouraged shoppers not to visit Fred Myer stores. Kmart finessed the unions by consulting them on the construction of the stores.

"Technology has allowed us to come here," said Joseph Antonini, chairman of Kmart. The discounter investigated the possibility of entering the faraway state for five years, and began seriously considering the move 2-1/2 years ago.