Foreign retail in (US) downtown revitalization

[apocalypsekirk]

I was wondering if anyone knew of an example of a city courting foreign retail to help anchor a downtown revitalization effort.

In the July/August edition of the British mag Monocle, they had an article that was a fantasy of what their perfect urban village would look like. They picked shops and eateries from many different cities all over the world. http://www.monocle.com/sections/busi...t-High-Street/

The layout of the urban village reminded me somewhat of Buffalo's Main Street, except that Buffalo's Main Street has tons of empty storefronts and is , for the most part, a ghost town after the workday.

I hear stories of Main Street once being a bustling urban destination--the main retail corridor of the Buffalo-Niagara region--but now retail has moved out to the suburbs in the form of malls and strip malls.

American retail, by and large, wouldn't be able to survive even in a revitalized Main Street, but what if foreign retailers were the main tenants? People would travel to the city center to experience something they can't get elsewhere.

With the weakness of the American dollar, it might be economically viable for European and Australasian chain stores to locate in America. With some aggressive incentives and lobbying, a city might be able to bring foreign retail into the equation.

Any thoughts on this? Has this been done anywhere?

[Dan]

In some previous posts, I mentioned the "everywhere but Buffalo" phenomenon; many national retail and restaurant chains have no presence in the Buffalo area, despite being in most similarly sized metropolitan areas, and also many with an even smaller population than Buffalo Niagara.

Foreign retailers entering or expanding in the US market aren't an exception to the "everywhere but Buffalo" rule in site selection. H&M is in NYC, Albany, Utica, Syracuse, and Rochester, but NOT the Buffalo area. (H&M has a store in Harlem, but nothing in the Buffalo metro. If that's not an indicator, I don't know what is.) Not too long ago, a spokesperson from Ikea said that they haven't considered the Buffalo area for a store, and that they're probably never going to open a store in the area.

The US is the world's most competitive market for retailers. It's a challenge to break into the US market; there's appealing to a fickle consumer that already has a multitude of choices (except in Buffalo), setting up a distribution network, site acquisition, marketing, and so on. Business textbooks are filled with examples of otherwise successful foreign retailers attempting to enter the US market, and failing miserably; Auchan, Canadian Tire, Wimpy, Dick Smith Electronics, and so on. Notice how there's literally hundreds of familiar US retail chains in Canada, but very few Canadian chains in the US; millions of Canadians go to Home Depot and Burger King, but you won't find Rona or Harvey's on US soil. With few exceptions -- the few Canadian restaurant chains in the Buffalo area, Tim Horton Donuts, Ikea, H&M and Tesco's conceptual stores in LA, for instance -- most foreign retailers that enter the US market either:

* Start (and stay) in very prestigious large markets such as NYC and LA: fcuk, Virgin Records, high fashion brand stores, etc; or:
* Limit their expansion to certain ethnic areas: Jollibee in Filipino neighborhoods, Pollo Campero in areas with a large Guatemalan community, and so on.

Because of the competitive market, there are many international retail and restaurant chains that avoid the US market at all costs; Carrefour and Nando's Chicken come to mind. Ikea's US expansion is much slower than in most other countries, where they have many stores in markets that are much smaller than Buffalo.

Basically, if the Buffalo area -- not downtown, but the entire Niagara Frontier -- can't even get one lousy American Apparel, Trader Joe's, Whole Foods or Chipotle, why would a growing foreign chain like ... oh, let's say Zara, consider the area? Why would an independent retailer from the UK, Australia or elsewhere consider launching a US presence in Buffalo instead of a far more lucrative, affluent metro that isn't saddled with an aging, declining and increasingly poorer population?

[Cardinal]

Great answer, Dan. You might also mention U.S. retailers that fail and yet continue to live in remote backwaters like Woolworth in Canada. In fairness to saying the U.S. is competitive, let's not forget Wal-Mart's failed invasion and subsequent withdrawl from Germany.

As for populating downtowns with foreign retail, I have a couple questions:

1) Are we really talking foreign chains? It seems most of these are independent shops. We could support independent shops in our cities, but the trend for the last century has been to consolidate retail in an ever-shrinking number of chains.

2) How long before every community has a downtown full of foreign stores. When malls first began to appear in the 1950's, and on until perhaps the 1980's, you would see different stores in every mall. If there were three or four malls nearby you might actually choose one instead fo the other because of what it offered. Not anymore. Every mall is the same. The same might eventually be true of downtown. The same Irish pub. The same Italian fashion shop. The same Tokyo sushi house. The same Canadian maple candy shoppe.

What we are all getting at, I think, is that independent retailers offer a unique experience. It may be more interesting to shop in places where we don't know what to expect. Downtowns, to some extent, offer that. Unfortunately, that sense of exploration is only one factor in why we shop. Price, selection, convenience, and quality also factor in. Independent retailers do not always score well in those categories.

[Mud Princess]

Interesting thread! I would add that there may be opportunities in some downtowns for independent shops and restaurants offering a similar "international" experience. These businesses may be owned and operated by immigrants, or by others with a special interest in other cultures. Think something akin to the Chinatowns you find in large cities: these areas cater not only to local ethnic populations, but also to residents and visitors who enjoy the culture, the sense of exploration, the ability to buy something you can't get elsewhere, the chance to try different kinds of foods.

Of course not every city can have a Chinatown, but a community could establish an international district, with a broad range of businesses, or provide support to an existing enclave of businesses focused around a particular ethnicity. For example, I'm currently working in a community with an extremely diverse population of immigrants from central & south America, many of whom have opened restaurants and shops in the downtown. I see this as a huge potential asset; with additional support and assistance, these businesses could attract people from a much wider market in the future.

[DetroitPlanner]

I am finding myself in strong agreement with Dan and Cardinal on this.

The same factors that keep out 'american' stores keep out others. I don't think who owns the company makes a whole lot of difference.

Larger downtowns that have poor retail all share common factors such as lack of significant or wealthy population base in or around downtown. Some argue transit can be a cure-all, though stores don't deliver goods anymore and you don't see many folks on the bus carrying a television home from work.

The shelf life for a retail store is not very long. I live by the same mall that became the deathnail for Downtown Detroit when it opened in the late 70's and can remember its opening. There has been an incredible amount of stores that have left the mall only to be replaced by the new ones based upon newer marketing concepts. For a while there stores like the Disney Store or Warner Brothers were all the rage, now you can't find those types of stores. Malls have shifted their mix to more and more soft goods and gifts and you can't find the music stores in the malls. To wrap up this point: nearly all the stores that were in the mall in 1977 are now gone; and those that are left have a totally different product mix (the JC Penny sold appliances, sporting goods, tires, and toys back then). The turnover of most stores is only about 5-10 years as a good run.

To go chasing after retail chains may end up to be more work than its worth. You could be better off to address the conditions that make the area a poor shopping district and try to mitigate them then to worry about attracting stores from around the world.

[Big Green Scott]

Of course not every city can have a Chinatown, but a community could establish an international district, with a broad range of businesses, or provide support to an existing enclave of businesses focused around a particular ethnicity.

Schenectady NY did a bit of this with it's large Guyanese population. (Guyanese food is great by the way think a cross between Caribbean and Indian).

I don't know why more cites don't embrace this phenomenon, how many urban areas have a "Little Pakastan" in them right now with out any formal designation,...but anyway that seems like it should e a whole other thread.

[Blue]

Great answer, Dan. You might also mention U.S. retailers that fail and yet continue to live in remote backwaters like Woolworth in Canada. In fairness to saying the U.S. is competitive, let's not forget Wal-Mart's failed invasion and subsequent withdrawl from Germany.

As for populating downtowns with foreign retail, I have a couple questions:

1) Are we really talking foreign chains? It seems most of these are independent shops. We could support independent shops in our cities, but the trend for the last century has been to consolidate retail in an ever-shrinking number of chains.

2) How long before every community has a downtown full of foreign stores. When malls first began to appear in the 1950's, and on until perhaps the 1980's, you would see different stores in every mall. If there were three or four malls nearby you might actually choose one instead fo the other because of what it offered. Not anymore. Every mall is the same. The same might eventually be true of downtown. The same Irish pub. The same Italian fashion shop. The same Tokyo sushi house. The same Canadian maple candy shoppe.

What we are all getting at, I think, is that independent retailers offer a unique experience. It may be more interesting to shop in places where we don't know what to expect. Downtowns, to some extent, offer that. Unfortunately, that sense of exploration is only one factor in why we shop. Price, selection, convenience, and quality also factor in. Independent retailers do not always score well in those categories.

Interesting points raised here -- uniqueness is important. Yet the reality is... many of those large stores provide people with what they want or need. In Southern California, I use the example of Glendale. Unlike many SoCal communities, Glendale has a strong downtown. A $400 million mixed use development opens next month, across from a 200-store mall that is relatively well integrated into the downtown (no surface parking, free parking garages, entries directly onto the sidewalk). Across from the mall on the main street (Brand Blvd.) is a Borders, Linens N Things, and an Old Navy. An Outback and a movie theatre are located on the second level of an outdoor, European-style development. A BJ's Pizza and Brewery is on the main floor of a 20-something story office building, and has great visibility/sidewalk presence to two major streets. A block down is a an urban Circuit City, again, with no surface parking and blends into part of the downtown.

None of those stores are unique. I can go to any of those stores closer to where I live, yet I frequent them in Glendale, going out of my way to go there whenever I am in the general vicinity. Why? It's a unique and energetic experience. I enjoy seeing people outside, interacting, socializing. It feels far more energetic and urban than the typical suburb.

In other words, I think the monotony of malls comes from the similar layout, not necessairly the same stores. To me, malls all feel roughly alike -- again, the notable exceptions are well-designed urban/downtown malls. But downtowns have character. For me, it's more about being in a downtown, feeding off the energy, and shopping in the stores is a way to partake.

In summary, I think if all downtowns started to have a similar batch of stores, they would still feel far more unique than the traditional enclosed mall.