“Zombie” Stores: A cost of the recession?

An interesting discussion on Retail Wire about stores’ inventory management during the recession. Ted Hurlbut coins the phrase “zombie stores” to describe retailers who have pulled back too drastically, either in particular departments or in the entire store. My comments on a trend that goes way beyond space rationalization:

As consumer demand starts to work its way back from the bottom, the stores that have overreacted on inventory pullbacks are going to have the toughest time recovering. It’s one thing to manage inventory more tightly in a downturn, it’s another thing entirely to “slash and burn” indiscriminately. To some degree, the gaping holes in stores’ assortments and out-of-stocks on basic replenishment items have contributed to the sales slump.

Long-term reallocation of space is a different challenge, one that good retailers should be examining regardless of the economic climate. It’s true that stores like Target have an opportunity to speed up their grocery offerings by cutting back on unproductive space elsewhere, but these kinds of moves need to be motivated by smart long-term strategy, not just on which way the economic winds are blowing.

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