Successful Independent Retail Stores
Tuesday, August 11, 2009
In a time when retail seems to be dominated by chain stores, there are some independents that are holding their own. Nationally-known retail expert George Whalin names the 25 best independent retail stores in the nation in his book "Retail Superstars."
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh. You're listening to These Days on KPBS. If you think about the stores you've been to recently, most of them have probably been part of a chain, big box stores, department stores, electronic, hardware, bookstores, supermarkets, even restaurants. Most of the retail shops we buy things from are part of a string of stores, frequently nationwide, that try to maintain uniform standards. There are, however, certain independent stores that have bucked the trend of retail 'homogenizing' and revel in their uniqueness. They are signature stores that define their location and can become must-see landmarks. But people who run successful independent stores must have good business instincts and find a niche that no one else fills. My guest this morning has searched the country and found 25 outstanding independent retail stores. George Whalin is a nationally know retail expert. He's the founder of Retail Management Consultants located in Carlsbad and his new book is called "Retail Superstars: Inside the 25 Best Independent Stores in America." George, welcome.
GEORGE WHALIN (Founder, Retail Management Consultants): My pleasure. Nice to be here.
CAVANAUGH: Now, as I say, you've been searching the country to find the best independent retail stores. Are these stores getting harder to find?
WHALIN: Yes, they are. Obviously, with the proliferation of chain stores, it has devastated the ranks of independent retailers with exception. You know, most communities have a few small stores but really highly successful independents are getting rarer.
CAVANAUGH: Now did you have a certain criteria for the stores that you decided would be the retail superstars?
WHALIN: I did, in fact. The first thing I was looking for was the stores that were unique, that were truly different either in their store design or in their merchandising selection or their marketing or just the way they did business. That was my first criteria. The second criteria is, they had to be successful, they had to be able to do volume in business. And, third, I was looking for stores that had been in business a long time, and the longest in the book is in business 150 years, and the shortest is about 30 years. So it's – These are all stores that have proven their worth in tough times and good times and amongst – against big competitors.
CAVANAUGH: Now let's start out with one of us that many (sic) on the west coast might be familiar with. I think a lot of people know Gump's in San Francisco. Is that the oldest store?
WHALIN: That's the oldest. Gump's is 150 years old.
CAVANAUGH: Well, tell us what kind of store it is.
WHALIN: Well, it's a little hard to describe.
WHALIN: It is a gift store in some ways. It's a fine jewelry store in other ways. It is a home furnish store – furnishing store in other ways. And it's kind of quirky because they have books and they have a broad variety of items all of which are pretty unique and not found in most other stores, particularly in their jewelry department. Their jewelry is – they don't sell watches and they don't sell a string of pearls. They sell very unique custom made pieces of jewelry in combinations of jade and diamonds and just all kinds of interesting things. So if someone is looking for a really special piece of jewelry, they'll find it there. They'll also find things like shoji curtains that you find in a Japanese home. And you'll find lots of interesting items and lots of gift items.
CAVANAUGH: Now for all of that 150 years that Gump's has been in existence, how has it resisted selling out maybe to a chain?
WHALIN: Oh, well, it didn't when – at one point.
WHALIN: It actually got sold to a big catalog company about 20 years ago and they almost ruined it. They – they – It has been – They've had a catalog for – since the early fifties, actually, and they – these guys started putting in cheap junk in the catalog and – and in the store as well. And eventually somebody said, well, you can't ruin this wonderful old company and a group of investors, a few years ago, bought it and sort of brought it back to its glory.
CAVANAUGH: Now some of the independent food stores on the list, you have independent food stores, which really boggles my mind because I would imagine that groceries are one of the hardest businesses to keep independent in this day and age. So how does a place like Jungle Jim's in Ohio do it?
WHALIN: Well, Jungle Jim's is a phenomenon unlike anything I've ever seen. It started out as a fruit stand, a fruit and vegetable stand on the street corners of Fairfield, Ohio, which is just north of Cincinnati. And it grew and it grew and it grew and if you were in the building today and you looked up at the ceiling, you'll see patched pieces where they've added on to this building and it's currently 300,000 square feet.
WHALIN: A Walmart Supercenter is about 200,000 square feet so you can get a sense of how big it is. But what they've done is that they've assembled a group of foods and products that you can't find literally anywhere in the world in one place. For example, if you grew up in Brazil and you prefer the formulation of Pepsi Cola that they have in Brazil, which is a little different than ours, you can get it at that store.
CAVANAUGH: Oh, wow.
WHALIN: In fact, if you grew up in China, they're got a separate formulation there and they've got that formulation as well.
CAVANAUGH: But this is in Fairfield, Ohio. How do they find buyers for all this stuff?
WHALIN: It's really interesting. The parking lot is huge and it is very frequent – I've been there many times and I see cars from as many as a dozen states. So people drive great distances to go there. Let me tell you why. The selection is massive in every single category. There are 1400 varieties of hot sauce. Of course, they do it a little differently at Jungle Jim's. They put a full size fire truck on the top of the display of hot sauce. There are 1200 varieties of honey. There are literally hundreds and hundreds of beers and microbrews and beers from literally every country in the world that makes beer. Wines, cheeses, just massive selections of everything. So the – And unusual things. If you're interested in having a hog's head for dinner this evening, you can buy hog's heads at Jungle Jim's. Or ducks' feet or any of a massive variety of unusual foods from literally all over the world.
CAVANAUGH: Are some of the other food stores on your list of 25 retail superstars, are they also unique in this way?
WHALIN: Well, they're not unique in that way…
WHALIN: …because that's a – that's a very special unusual store.
WHALIN: I don't know that it's re – it can be reproduced anywhere else. Zabar's in New York is a sort of a unique, one-of-a-kind place but it's a New York kind of a place. There are other ones but they're probably none that are more successful that this. It's about 90 years old. It started out as one little small store and kept growing and growing and growing. Now it's a two-story store. Like many old Jewish type delis, it is – a lot of the foods are still behind counters and they have counter people help the customer. I was in Zabar's one day and watched an elderly lady, probably five feet tall, gray-haired, having a heated discussion, and heated it was, with the guy behind the counter and they went through their little song and dance for a few minutes and he wrapped up her purchases and she stuck them under her arm and as she was about to leave, she sort of looked over her shoulder, winked at him, and she said, I'll see you tomorrow. Well, I don't know very many retail stores where…
WHALIN: …you can go in and get in an argument with the guy behind the counter and hope to have – see him again the next day, so…
CAVANAUGH: Exactly. That's…
WHALIN: And they have a good selection of things but it's – it is coffees and breads and almost everything they sell they either make or source themselves.
CAVANAUGH: Now the owners of these independent retail stores on your list, they must work like crazy.
WHALIN: They're the hardest working people I ever met in my life. Saul Zabar, who runs Zabar's, is 82 years old and works six days a week and works long hours and he – he's just a hard-working guy and he'll die in the store, I would assume. He's, you know, one of those kind of guys. There's a guy who owns a store in Houston, Texas called Gallery Furniture. I've never met anybody that spends more time in his store than this guy does. He's there at 7:30, eight o'clock every morning, he's there at nine or 9:30 every night.
CAVANAUGH: And I – You know, aside from Gump's, I've been to two other stores that are named as your retail superstores – superstars, I'm sorry. Archie McPhee's in Seattle and Powell's City of Books in Portland. Now they're sort of opposites because Archie McPhee's is a real crazy place and Powell's is a very sort of staid, old-fashioned bookstore. How do both, these two opposite kind of stores, both get on your retail superstars list?
WHALIN: They do things unlike anybody else in the business. Take Powell's for example. Powell's is a four-story, the entire city block, bookstore. Now you would think in an environment where you've got Barnes & Noble and you've got Borders and you've got Amazon and all these other people selling books – Well, first thing, Powell – Michael Powell, who started the book – started the company, believed that there were two things that could make his store different. The first thing he did is that he put in new books and used books, side by side. So you can find new and used books all throughout the store, side by side. The second thing he did is that he knew that in America we have lots and lots of people who live here who come from other countries. For example, there's a huge population of Italian-Americans who would like to be able to read books in Italian. Powell's has them. Turkish, Japanese, Russian, pick a language. They have a massive selection both online and in the store of books from other countries. There's nobody else who does that. The other thing they do is, is that they truly make it a comfortable environment. Every day there are book signings and author appearances and things like that and it's – you can go to this store and walk in and there'll be people sitting on the floor with a stack of books, going through, figuring out what they want to read. It's that kind of a very – You know, we hear about Starbucks creating this third place kind of a thing where – it's not work and it's not home. Well, Powell's has had that for 35 or 40 years. And Archie McPhee's is a story that is just unbelievable. Paolo, the guy that owns it, is an interesting character. He started out selling, you know, novelties, rubber chickens and fake barf and all that sort of stuff. And today has created a store that is – probably half of the merchandise in there, they create themselves. For example, I'm sure many in your audience know about this lady, this librarian from Seattle who created this city reads, the whole city reads the same book in one month.
CAVANAUGH: Yes, yeah, uh-huh.
WHALIN: And it's a very, very popular thing around the country and it's done a lot.
CAVANAUGH: We have a One Book, One San Diego here.
WHALIN: Sure. That lady is from Seattle. Well, they thought she was such a hero in Seattle that they made an action figure out of her. They made a doll out of her. And it's one of the bestselling dolls, and everybody said, well, you can't make dolls out of librarians. You know, you can't make fun of librarians. Well, it turned out to be a huge seller. They've sold thousands and thousands of these action figures. They have action figures of Freud, and they have action figures of other sort of unusual characters. And they just do things different. For example, you know, we all have, you know, skin colored bandaids these days. That's a very popular thing. Well, they sell bandaids that look like bacon. So they do some very unusual things and they're very successful.
CAVANAUGH: I'm speaking with George Whalin and – about his new book "Retail Superstars: Inside the 25 Best Independent Stores in America." You know, I was kind of sad that there was no store in San Diego located – listed as part of your retail superstars. Did anybody almost make the list?
WHALIN: Well, I really considered San Diego Hardware until they moved. And if I were them, I would've moved, too. I mean, you – that kind of store shouldn't be downtown in a metropolitan city like San Diego. But the thing that I thought made it magic was that old building they were in. I thought that was just terrific. But they're still a wonderful store. They're still one of the great stores in this country.
CAVANAUGH: And it seems although the stores on your list don't have necessarily a lot in common in terms of what they sell or what the stores themselves look like, they do have some things in common in that, you say, they've all found a niche, they've all found – they all do something that nobody else does.
WHALIN: Absolutely. I – That's – I think that's the key to independent success in business today, is to not copy anybody. Be an original. Every one of these stores is an absolute original. They're just not like anybody else.
CAVANAUGH: And have you checked back since your book came out how these stores are handling the recession?
WHALIN: I actually talk to all of these people on a pretty regular basis. Most of them have become friends of mine now. We've been through this together for the last few years. They're all doing moderately well. Nobody – I don't know as anybody's doing gangbuster business in this environment but they're all doing okay and they're all surviving and they're all doing fine.
CAVANAUGH: Now, do independent stores, these stores on your list, do they make a lot of money?
WHALIN: Oh, some of them make a great deal of money. The furniture store I talked to you about in Houston, Texas, they do $150 million worth of business a year out of a single location.
WHALIN: There is a consumer electronics and appliance store in the Chicago suburbs called Abt that does more than $300 million worth of business out of a single location.
WHALIN: So there are – these stores make money.
CAVANAUGH: Because you kind of think of independent stores, if they're quirky and they've found their niche and so forth, just sort of being able to make ends meet.
WHALIN: Well, the thing that's happened over the years is that, first thing, consumers travel and they're willing to travel great distances for great stores and great merchandise. The other thing, certainly, that's helped all of these retailers is the internet. The internet's changed the dynamic. The electronic store in the Chicago area is doing – will do $50 million of their business this year online. So it – And Gump's is doing a substantial amount of their business online and through their catalogs. So the dynamic of a single store retail today is much broader than it used to be.
CAVANAUGH: I wonder what other retailers might learn from your book and from the stores that you've chosen on your list?
WHALIN: Oh, I think there's some really important lessons here. That was one of the things that I searched for as I looked. I guess the most compelling lesson was that every single one of these retailers do business based on what their customer wants and needs. It's not some big corporate decision that we're going to carry this because, you know, the manufacturer was good to us or they gave us some special compensation or something. They do it because it's what their customers want. That – that's the most compelling message here of all, is that not one of these retailers started with a business plan.
CAVANAUGH: That's amazing.
WHALIN: Not one of them.
WHALIN: Not one of them. And most of them still don't have a business plan. What they do is, they respond and react to what the customer in the marketplace wants and needs from them. And when customers come in and want stuff, buy stuff, support the store, then they respond and react to that. And that's the biggest message of all but there's also other messages, is that these people are passionate about their business. They spend a lot of time at it, they talk to their customers, they're close to their customers. Being in business is one thing but being in business and doing business with a passion and a concern and a commitment to the customer is an entirely different feeling. I mean, we talk about stores all the time but how many chain stores do you go into, you get any feeling that anybody actually cares whether you're in the store? I can tell you absolutely, unequivocally that every single one of these stores, the service is good, the commitment is good. The furniture guy in Houston, Texas, he started something 20 years ago that nobody had ever done in the furniture business. You bought the furniture today, you got it today. Well, that was not – you know, it was unheard of in the furniture business. It's a little more common today but when you begin to look at what your customer wants and needs and do that, I think there's a great deal of success for anybody in an independent business.
CAVANAUGH: We're going to have to leave it there but you've given us a really good taste of your book. I really appreciate it. Thank you, George.
WHALIN: It's my pleasure.
CAVANAUGH: I've been speaking with George Whalin. He is a nationally known retail expert, the founder of Retail Management Consultants, located up in Carlsbad. And his new book is called "Retail Superstars: Inside the 25 Best Independent Stores in America." And I want to tell everyone, you can post your comments to anything you've heard today at KPBS.org/TheseDays. Thank you very much for listening and join us again tomorrow on These Days here on KPBS.