business news in context, analysis with attitude

by Kevin Coupe

I was intrigued over the long holiday weekend by a story I read in Connecticut's Norwalk Hour, about how even as Stew Leonard's plans to open its sixth store this summer - and its second on Long Island - the retailer is working with a mall developer, GGP, to potentially open a seventh store in one of that company's malls.

Now, the story was specific about some things - like it would not be opening a store in the long-planned SoNo Collection mall planned for Norwalk, which is just a few miles from its flagship and original store. And it was non-specific about others - like whether the store could be any of the malls in New York, New Jersey or New England that are owned by GPP, or even whether it could be outside the northeastern part of the country that Stew Leonard's always has called home.

GPP's CEO, Sandeep Mathrani, in the past has been clear about the fact that he believes that supermarkets offer "one promising path for mall operators dealing with department store closures," and he no doubt sees a brand name like Stew Leonard's as having a lot of potential. “The bad fortune of the department store is truly an asset for ‘A-quality’ (properties),” Mathrani says. “Today, essentially, the retailer says, ... 'I am going to go where the best-quality real estate is.’ So GGP, for example, has been putting in a lot of supermarkets into our shopping centers'."

Now, I sort of have a problem with all of this.

I should say here, in the interest of full disclosure, that I've been shopping at the Norwalk Stew Leonard's for a long time - spending something like $150 a week, 50 weeks a year, for more than 30 years. (You do the math.) I practically raised my kids there, taking them with me each week, and my daughter actually worked the one summer. So I'm not a disinterested observer.

But ... I'm not sure how Mathrani can talk about "A-quality properties" and "failing department stores" in the same sentence. These department stores aren't just failing because their products and services seem increasingly irrelevant in a digital/e-commerce world ... it is also because people are finding alternatives to the massive time-sick that going to a mall often represents.

I know why mall developers want supermarkets. I'm just not sure that supermarkets should want mall developers.

Sometimes, sure. On a case-by-case basis. But this strikes me as being far from sure-fire bet.

Stew Leonard's hasn't asked me for my opinion, and they've been plenty successful over the years without it. But here's what I think Stew's actually ought to do.

Rather than reproduce the big stores with which they've been so successful in the distressed real estate represented by various malls, I think they ought to look in the New York metropolitan area for places where they could open small stores that would be a lot more convenient. I might call them "Stew's 100," and would position them as carrying the 100 most important items (whittled down from the approximately 1500 or so that they carry in their big stores). Milk, bread, eggs, a few kinds of cheese, one or two kinds of bagels, etc... , as well as a strong selection of prepared meals. And I'd put these babies as close as possible to any of the dozens of railroad stations that are in these various communities, from which hundreds of thousands of people commute each day into New York City. They wouldn't necessarily have to be open on weekends, and might even have limited hours during the day.

And, they might even serve as delivery depots were Stew Leonard's to go into the click-and-collect business.

It'd be a really interesting experiment that would force the company to adapt to new circumstances and learn new skills and disciplines that might serve them well as people's shopping habits change. And they'd bring the power of a well-known brand name and a ton of marketing/merchandising expertise to the category.

Like I said, nobody asked me for my opinion. This is just an idea.

But it could be an Eye-Opener.
KC's View: