Putting the Squeeze on Retail Space
2013 also meant continued competition and expansion in grocery retail (see: Sobeys' purchase of Safeway), while the increase in online shopping caused a reduction in retail floor space for electronics, according to DTZ's Cheryl MacKenzie. We asked Best Buy's Geoff Stollery, its Canadian real estate guru, for some perspective on what's happening. He says all you have to do is Google "Best Buy restructuring" to get a sense of its plan to optimize the company's retail footprint by closing seven of its big box locations and eight Future Shop stores across Canada.
Geoff tells us how robust the e-commerce side of the business has been, so while bricks and mortar is scaled back, the true balance between physical retail stores and online sales is something Best Buy—and the industry in general—has yet to determine. "It's a question of ever-evolving efficiencies, doing more sales with less square feet of space," he says. "But the physical touch point is as relevant as it's ever been. Bricks and mortar still enable sales even if the sales don't take place within the store."