Newcomers add sizzle to hot market - discount store chains in Chicago - Regional Analysis: East North Central

Discount Store News, May 8, 1989

Those totals will be bolstered by increases in the city's booming tourist and business visitor industries. Some 3 million trade show attendees flood the McCormick Center each year, and another 7 million tourists visit Chicago. Together, they spent over $5 billion in 1987, and that figure is expected to rise sharply.

Over the next 10 years, Cook County's population is expected to shrink somewhat, but average household effective buying income will more than double. The suburban counties (Lake, DuPage, Will, Kane and McHenry) will average about 13 percent growth.

According to the Tribune's Kramer, local shopping within the city should improve over the next few years, due to a combination of an influx of young professionals and the gradual rehabilitation of older retail plants.

Shoppers at regional and super-regional megamalls have become both less common and less loyal over the past two years. Local and neighborhood retailers seem to have siphoned off those shoppers.

However, the Tribune reports that malls to the north of the city, in Lake County and on the Wisconsin border, have been drawing significant numbers of shoppers who formerly drove south toward Chicago, a disruption of usual traffic patterns.

To date, downtown Chicago has not benefited much from the abandonment of regional malls. That should change, however, as the inner city develops its more rundown physical plants, and new and exciting retailers move in.

Unlike the strong home improvement market, home fashions retailing is in disarray. Formerly strong market presences like Polk Bros., Scandinavian Design, John M. Smyth, and Colby's are in a state of flux, in some cases closing stores, and only the updated Pier 1 seems to be doing well.

The revamped Sears may return to its former dominance in this market, but it appears, according to the Tribune, that there is plenty of room, particularly given the high rehab rate, for an innovative retailer along the lines of IKEA to make an impact here.

Overall, it appears that while Chicago proper may be understored, it is a strong and very competitive market. The closing of several Zayre stores has perhaps created a vacuum at the lower end of the market, but on the whole, newcomers will have a difficult time attracting customers in the downtown area. Growth potential is mainly focussed in the wealthier suburbs, including understored counties like Kane and McHenry.

PHOTO : The gentrification of inner Chicago, coupled with a booming tourism business,have turned North Michigan Avenue into a mecca of high-end specialty stores.