Smaller Stores Couldn’t Save Shopko, But They Might Work For Other Retailers

Retail analysts have said the decline of Wisconsin-based Shopko is in line with trends in the retail industry — but that doesn’t mean other chains will necessarily face the same future.

Shopko filed for bankruptcy in January and is closing about two-thirds of its retail locations in the coming months, including dozens of stores in Wisconsin.

The company had tried to improve its standing by opening Shopko Hometown stores, which were smaller than the traditional 100,000-square-foot store model and were often built in smaller communities that were underserved. But analysts said the company’s larger stores weren’t able to compete with retailers like Amazon, Target and Walmart.

Brian Spaid, assistant professor of marketing at Marquette University, said retailers can draw customers to smaller stores, but it has to be part of a broader strategy to better understand and attract them.

Spaid said retailers will need to balance “exclusive products, smaller format stores, linking the online- and in-store more closely together, really understanding the data and understanding consumer preferences.”

He said another Wisconsin-based chain, Kohl’s, has had early success with some of its smaller stores, while also making additions and improvements to its larger, more traditional locations.

“They’re also experimenting with some of their other stores having some new things that change the customer’s experience,” he said. “For example, the Amazon returns center, which has been a big help driving additional traffic to the store.”