The Retail Revolution
and Its Impact on
H A R VA R D B U S I N E S S S C H O O L P R E S S
Copyright 2005 by Robert Spector
All rights reserved
Printed in the United States of America
09 08 07 06 05
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Library of Congress Cataloging-in-Publication Data
Spector, Robert, 1947Category killers : the retail revolution and its impact on consumer culture / Robert Spector.
Includes bibliographical references.
1. Shopping centers. 2. Retail trade. I. Title.
The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.
The Colossal Competitors
From Cow Pastures to Category Killers
Charles Lazarus and the Birth of
the Category Killer
Category Killers Everywhere
How and Why They Dominate
The Cost of “Everyday Low Prices”
There Used to Be a Department Store Here
Expanding Their Reach
Paper Clips in Portugal
The Winds of Change for Category Killers
The Changing Shape of Retail
About the Author
PA R T I
From Cow Pastures to
There is nothing wrong with change,
if it is in the right direction.
T H E J E T - B L A C K P AV E M E N T of Southcenter Parkway slices
a path through an expanse of commercial sprawl ten miles
south of downtown Seattle, Washington. On one side of this
land is the convergence of two major highways—Interstate 5 and Interstate 405; and on the other side is the bustling,
upscale Southcenter Mall, where the Nordstrom, J.C. Penney,
and Bon-Macy’s department stores anchor the 1.3-millionsquare-foot shopping center, which was built in 1968 by the real-estate arm of Allied Stores, then one of the most powerful forces in department stores and shopping centers. Just to the north of Southcenter Mall are Toys “R” Us, Target, and the Bon-Macy’s clearance store. Adjacent to that group of stores is the 450,000-square-foot Parkway Supercenter. Parkway is a “power center” of category killers and specialty stores, which are grouped together and share a common
THE COLOSSAL COMPETITORS
parking lot: Best Buy electronics, Babies “R” Us, CompUSA, Gart Sports, Pier 1 Imports, Party City, Old Navy, Hallmark
Cards, Bath & Body Works, Cost Plus Imports, Marshall’s,
Ross, David’s Bridal, and Starbucks. The Supercenter also features a twelve-screen multiplex movie theater and a halfdozen chain restaurants, including Applebee’s, Red Robin, Outback Steakhouse, and Sizzler. Across the street from Parkway Supercenter are Borders Books & Music, Office Max, PETsMART, Linens ’n Things, and Jo-Ann, Etc. (fabrics,...