Reuters

Are the electronic retailer's latest closures a shift away from the giant strip mall model?

Best Buy is learning the hard way that bigger isn't always better.

Following their reported fourth-quarter net-loss of $1.7 billion, the electronics retailer recently announced that it plans to close 50 of its big box locations throughout North America and open 100 of its smaller Best Buy Mobile stores. Of the stores that are closing, most are located on the edge of a city or suburban center and are surround by other familiar retailers who have, for decades, embraced the development model of building big box stores surrounded by vast parking lots on cheap land. By my count, 18 of the planned closures are in "very walkable" areas, according to Walk Score. But of those 18, only three — in Baltimore, Boston, and Los Angeles — are in truly urban settings, surrounded by more than just parking lots and similarly large buildings.

Is this strategic downsizing signaling a dramatic shift away from the big box development model so prevalent throughout North America?

Don't bet on it just yet. The closure of some big box stores in conjunction with the opening of smaller retail configurations certainly marks a shift in thinking when it comes to retail development. For now though, it's still a very, very small shift. In 2011, there were 1,099 Best Buy stores in the United States. Subtracting 50 stores from that total moves the number of stores to 2009 levels, but still a far cry from the 357 stores the company operated in 2000. Of the more than 1,000 remaining Best Buy stores throughout the U.S., 518, nearly half, are of the 45,000 square-foot variety, with the next largest chunk, 425, coming in at 30,000 square-feet.

Conversely, there were only 177 of the newer, 1,200-square-feet Best Buy Mobile stores in 2011. But by the end of 2016, the company expects to have 600-800 of the smaller stores. After taking a quick look at the current locations of some of the Mobile stores, it appears most are located in the shopping malls that line the exurbs and the highways that lead to them. A few are located in urban centers like Manhattan and Boston.

As Best Buy adds more of these small stores, it'll be worth watching to see if they make a move into more urban centers. Methodical downsizing will give the retailer more versatility to make the move into more dense, walkable locations if and when the day comes when big boxes turn to big ghost malls.

At least on a small scale, Best Buy seems to be buying into the adage often embraced by cities, "less is more." 

About the Author

Most Popular

  1. Perspective

    Why Car-Free Streets Will Soon Be the Norm

    In cities like New York, Paris, Rotterdam, and soon San Francisco, car-free streets are emerging amid a growing movement.

  2. photo: an Uber driver.
    Perspective

    Did Uber Just Enable Discrimination by Destination?

    In California, the ride-hailing company is changing a policy used as a safeguard against driver discrimination against low-income and minority riders.

  3. photo: Robert Marbut, the incoming director of the U.S. Interagency Council on Homelessness,
    Equity

    Here’s the Enforcer for Trump’s Punitive Agenda on Homelessness

    In Texas and Florida, Robert Marbut Jr. sold cities on a controversial model for providing homeless services. Now he’s bringing it to the White House.

  4. Transportation

    How Media Coverage of Car Crashes Downplays the Role of Drivers

    Safety advocates have long complained that media outlets tend to blame pedestrians and cyclists who are hit by cars. Research suggests they’re right.

  5. photo: a Tower Records Japan Inc. store in Tokyo, Japan.
    Life

    The Bankrupt American Brands Still Thriving in Japan

    Cultural cachet, licensing deals, and density explain why Toys ‘R’ Us, Tower Records, Barneys, and other faded U.S. retailers remain big across the Pacific.

×