Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 22, 1995 TAG: 9501200040
SECTION: ECONOMY PAGE: 2 EDITION: METRO
SOURCE: JOHN LEVIN BUSINESS EDITOR
DATELINE: LENGTH: Long
"Since the world is becoming so computer-oriented, there won't be a choice for many people. If you want to compete you've got to learn how to keep up with a lot of pieces of information," she said.
Moore said she was trained 20 years ago "on what a lot of people still use, the Day Timer, one of several brands of bulky loose-leaf organizers. She traded it three years ago for a computer, saying "in order to know where you are in the future, you have to know where you are now."
For Roanoke regional commercial real estate, that means a market virtually without the space to allow for growth, and no new major shopping center since 1989.
Simply put, the Roanoke Valley has 19 major shopping centers - defined as encompassing at least 50,000 square feet - and three of them are malls (Crossroads, Tanglewood and Valley View) where leasing is controlled by a single owner. That means the competitive market for attracting new businesses is dominated by just 16 centers that are mostly out of space.
The past five years have seen shopping centers remodeled and updated and some enlarged, but no major new development - and none on the horizon.
Three major centers - Cave Spring Corners, Lakeside Plaza and Old Country Plaza are 100 percent filled. In several others - Towers Shopping Center, Hunting HIlls Plaza, Ridgewood Farms and Townside Festival shopping centers - there are only one or two storefronts available in each.
While this may appear to represent an enviable position for the owners of those properties, it also suggests some real problems ahead for growth of business, both of retailers and of the myriad service companies that feed from the operation of a store.
Having too little space available means retailers, especially the national chains, quit trying to enter the market. In recent months, Moore said, the Roanoke market has been bypassed by a chain that wanted to operate three Roanoke Valley crafts and variety stores, each of 15,000 square feet. Also lost to the market were two clothing chains, one of which couldn't find an adequate spot on the south side of town. Lots of restaurant chains have looked and left because they couldn't find locations, Moore said.
"These chains gave up on Roanoke," she said. "When they couldn't get it, they moved on to another market."
For owners of those leased-up centers, it also means stagnant revenues, because without a new stream of tenants competing for space, rents don't rise as constantly or sharply.
So it's not surprising that one of her major predictions for the region's retail future is that more shopping centers will be built.
"There's no question we have to have another round of building," Moore said. But because a typical center needs 30 to 50 acres of land, the question is, where will the stores be built?
In the Roanoke Valley, where land is at a premium, the new centers are likely farther outside the city, along U.S. 460 and U.S. 220.
Lifestyle will dictate another trend that will affect retailing in the next five years. "People are busy; both men and women are contributing to households and to child care" as well as competing in the work force, Moore said.
"We've had two generations of women educated and programmed to work, not to sit at home," she said. "Shopping can't ever again be a leisure-class activity."
That will increase the demand for convenience shopping that most often translates into one-stop stores where a family can accomplish several tasks at once: buying groceries, having clothes cleaned, banking and renting movies.
And because America is a predominantly middle-class society, outstanding service of the sort generally available only from small, upscale merchants, may not matter more than price and convenience for such everyday needs.
"Outstanding quality may not make a difference against price," guaranteeing a spot for discounters such as Wal-Mart, Kmart and Target, Moore said.
That doesn't necessarily mean the death of the small merchant, Moore said. But it does mean the next five years could be much tougher times for many of them.
The small merchant, she said, will depend more on franchises, pretested and standardized operations for which it is easier for a local operator to get financing and the risk of failure is much lower.
"Mom and Pop are not likely to get money unless the bank can hold a second mortgage on their house. Even expansions of existing businesses are getting more difficult because banks fear the failure rate is higher, so the risk to the lender is higher," she said.
That means, Moore said, that communities like Roanoke will have fewer small service shops - dry cleaners, shoe repairers, beauty salons and barber shops.
Finally, when Moore gazes into the screen of her computer, she sees its technology impacting the retail industry.
The age of computers means not only television shopping channels, but on-line shopping with catalogs on the Internet.
Realizing her forecast paints a dark picture for many of Roanoke's longtime and popular stores, Moore said she admires them for hanging on, for offering both superior service and competitive prices.
That could be their formula for survival.
by CNB