Colorado Springs Retail Briefs: August 10, 2007

Wal-Mart has signed a deal with India's Bharti Enterprises to supply infrastructure -- not merchandise.

Single-brand retailers may enter India, but only by forging a joint venture with a local partner, of which the foreign party may own no more than 51 percent. Foreign retailers interested in entering into such ventures must apply through India's Foreign Investment Promotion Board.

According to the International Council of Shopping Centers, Wal- Mart will provide cold-storage warehousing, inventory supply and trucking infrastructure as part of the 50-50 joint venture, which is to be called Bharti Wal-Mart.

Bharti Enterprises is one of India's largest companies, and owns the country's leading cell phone network. It recently allocated $2.5 billion for its Bharti Retail subsidiary.

Next year Bharti Wal-Mart will open the first of about a dozen wholesale centers that will supply food, footwear, stationary and other consumer goods to retail chains, mom-and-pop stores and restaurants, as well as Bharti's supermarkets.

Stores will be between 50,000 and 100,000 square feet.

Small mom-and-pop retailers dominate the Indian retail market, with "organized" retail chains accounting for only 3 percent of the market, which is valued at $350 billion, and could as much as double by 2015.

Whole Foods shrinking size of new stores

For five years Whole Foods has increased its average store size by 20 percent. Now it plans to shrink the size of its new stores, a trend found among many chains in the United States, especially among consumer electronics retailers.

The 197-unit chain, with an average store size of about 36,000 square feet, operates 14 stores with more than 60,000 square feet. Whole Foods' development costs per square foot averaged $282 for its existing portfolio and $258 for the stores it opened in 2006.

According to the International Council of Shopping Centers, the retailer is reviewing its pipeline of 94 stores scheduled to open between now and 2010 and is selectively "rightsizing" leases or decreasing the selling square footage in the store design.

"We adjusted two leases and are in the process of adjusting another six leases representing an average reduction of 9,000 square feet per lease," said president and CEO John Mackey. "We believe the average size of our stores in development will probably be around 50,000 to 55,000 square feet for the near future."

Whole Foods' pipeline includes 5 million square feet, or 70 percent of its existing square footage. Currently, 21 of the planned stores are 60,000 square feet or larger, he said.

Best Buy and Circuit City also are downsizing their stores -- in some cases to half the size of their usual superstore format.

As late as 2004, Best Buy stores generally occupied 45,000- square-foot boxes. This year, however, two-thirds of the 90 stores the chain is opening will measure 30,000 square feet or less.

Similarly, about half of the roughly 65 domestic stores Circuit City plans to roll out by March will measure just 20,000 square feet, less than two-thirds the size of its 34,000-square-foot floor plate.

Verizon opens store off Powers

A new Verizon Wireless store has opened at 4331 Integrity Center Point.

At the northwest corner of Powers and Barnes, the store offers a bill payment kiosk and a video display, providing information about the latest handsets and accessories.

Verizon Wireless has more than 2,200 stores nationwide, including Verizon Wireless Communications Stores and Verizon Wireless Stores at Circuit City.

Joan Johnson covers retail for the Colorado Springs Business Journal.

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