Cutting hours evolves to cutting days

DISCUSSION TOPIC

Survival Strategy: Cutting Store Days 3/9/09

TOPIC SUMMARY:

After decades of being open seven days a week, Portland-based retailer Kitchen Kaboodle is closing its doors on Mondays, Tuesdays and Wednesdays in order to survive the downturn. The owners figures that with consumers only buying on sale, the cost savings from closing the doors on those days will enable the company to bring in lower prices on the other four days of the week.

“What our customers want and what everybody wants is lower prices,” John Whisler, a co-owner of the five-unit kitchen appliances chain, told the Portland Business Journal. “We were thinking, if that’s the ‘new normal’ and everybody wants everything on sale, we as a retail business, and locally-owned one, feel we need to get people what they want.”

If the store just slashed prices across all days, it would lose money. Monday, Tuesday and Wednesday have long been the stores’ slowest days. The savings come mostly in labor costs.

Every item is now discounted 10 percent to 50 percent across the store, with lower-margin products getting the smaller discounts. Mr. Whisler said the stores’ prices are now lower than many big chains like Crate & Barrel.

Mr. Whisler admits the idea is a “bold step” but is really a logical reaction to the marketplace.

“I think we all, in any business, get invested in how we’ve done things. You think we’ll just tough it out and trim here and cut here and hold the line on this expense. But after a while in this economy it’s pretty challenging,” he said. “We don’t want to be just limping along. We want to be seen as the place that gives people what they want.”

Discussion questions:  What do think of closing down a store a few days a week to bring in lower prices the rest of the week? Is this just an option for smaller chains or can larger ones benefit from closing doors on slower days?

My post: 

Many retailers and shopping centers are cutting back on operating hours to remove operating costs from non peak hours.  Kitchen Kaboodle is taking this to the next logical step – closing completely on unproductive days.  The people who would normally shop on Monday through Wednesday will be inconvenienced, but their numbers were clearly not material to the business.  It will also be easier to hire and retain a committed workforce who can have a clear work schedule and even have 3 days to consider a second part-time job if they choose.

Having given these positives, the strategy will only work for small chains – most landlords would not tolerate a closed storefront 3 days a week.  The store competes more with higher end stores vs. Walmart so I’m not sure if “price” should be the foundation of their marketing.  This type of product sells due to an inspiring environment and shopping experience.  This will be interesting to watch.

Mike Osorio, your Dare to be Contagious! TM strategist

www.OsorioGroup.com

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13598

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