In pinch, stores stir merchandise mix

Best Buy gets musical, Walgreen's gets fashion in stretching brand profiles

August 05, 2008|By Sandra M. Jones | Sandra M. Jones,CHICAGO TRIBUNE

CHICAGO - Guitars at Best Buy. Frozen pizzas at Menards. Yoga pants at Walgreen's.

As the economy slows and the retail industry cuts back on investment in new-store construction, the time is ripe for dusting off a tried-and-true retail strategy: Sell more products in the stores you have.

Sometimes it works. For instance, Barnes & Noble Inc. changed the bookselling business by putting coffee shops in its stores.

Other times, it is a strategy that sends merchants far into the weeds. Midwestern shoppers may remember when supermarket chain Jewel sold lumber. But the temptation to stray from what a retailer does best is hard to resist when sales need a boost.

Over the past year, Eau Claire, Wis.-based Menard Inc., the home-improvement chain, set up grocery aisles in three out of every four of its 240 stores, so shoppers can buy milk, canned goods, boxed dinners and frozen pizza alongside roofing materials and insulation.

Drugstore chain Walgreen Co. introduced a clothing line, called Casual Gear, at most of its 6,000 stores in April.

And last week Best Buy Co., the consumer electronics powerhouse, began selling musical instruments and music lessons at more than 75 of its 965 stores. The in-store shops offer more than 1,000 guitars, bass, drums, keyboards and recording equipment. Band instruments, including entry-level trumpets, violins, clarinets, saxophones and flutes from Suzuki, are available online.

"The question from the consumer is, what do you accept from the brand and what feels foreign," said Neil Stern, senior partner at Chicago-based retail consulting firm McMillan Doolittle LLP.

Home Depot, for example, went too far off base when it opened a handful of convenience stores that sold candy bars, cigarettes, coffee and fuel in the parking lots of its stores in Georgia and Tennessee. The sixth and last store opened in June 2007 and there are no plans to open any more, said Sheriee Bowman, a spokeswoman for the Atlanta-based home improvement store. Still, Home Depot struck gold when it ventured into refrigerators and washers and dryers, and it has been chipping away at industry leader Sears Holdings Corp.'s market share.

Likewise, Starbucks garnered a lot of attention for selling books and compact discs in its coffeehouses in recent years. But now the Seattle-based chain is in the middle of a retrenchment, closing stores, laying off workers and refocusing on its main business of selling coffee.

Best Buy, for its part, views its foray into music as a logical extension of its existing business of selling music players, home theater equipment and compact discs, said Justin Barber, a spokesman for the Minneapolis-based company.

"Consumers have looked to us as a resource for music for quite a while," Barber said.

Sandra M. Jones writes for the Chicago Tribune

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