Tt post jan 22, 2017

Excerpts from the Jan 22, 2017 Blade story

Chairman Emeritus Dick Anderson said the company tried multiple strategies through the years to bolster its stores. None worked.

“Every time we’d spend a million on an upgrade, the customer count and average sale would slip,” he said. “Pretty darn discouraging.”

Dick Anderson said the stores were problematic for a decade but the company was reluctant to close them even knowing it likely couldn’t compete with Lowe’s, Home Depot, Wal-Mart, and others.

“Those guys had us before we opened the door,” he said. “All we were looking for at the end of the day was like 2 percent [profit margin], which just wasn’t there.”

“Then it became, ‘Wow, this is a community service; we’ve got all these jobs to protect.’ And we struggled with that for the last 10 years or so and being a public [stock] company, the pressure began to build more and more and we’d get sharp questions [from Wall Street investors] about when are we going to deal with that?” he said.

Chris Boring, a Columbus retail consultant, said The Andersons’ two stores in Ohio’s capital “had a cult following in Columbus,” he said, adding that wealthy suburbanites loved going there for wine, gourmet foods, and garden supplies.

“Their merchandise mix really doesn’t seem to have any rhyme or reason — but the suburbanites liked that,” the consultant said.

Pat Huddleston, a professor of retailing at Michigan State University, said The Andersons carries a breadth of merchandise not unlike Meijer. But, “With only four stores, it’s definitely hard for them to get economy of scale deals from vendors. And that’s just one strike against them,” she said.

“Another is, food tends to be a low-margin business. You’re talking 2 to 3 percent margins. Then, because they’re small but carry such a breadth of merchandise, that’s a third strike against them in the current [retail] environment,” she said.

Kelli Hollinger, director of the Center for Retailing Studies at Texas A&M University, said small general merchandisers such as The Andersons have faced a growing disadvantage for some time now against retail behemoths like Wal-Mart and Target.

And now Amazon.com is the biggest threat yet.

Some consumers and employees have suggested the company should retreat to a single store again as it began in 1952. But Mr. Boring said that’s an impossible task because resources — credit-card charges, point-of-sale systems, security, inventory, stocking, and more — are more expensive with one store than with four, making it financially unfeasible.

“One store would absorb all the costs, that is, the overhead of four stores. If it’s not profitable with four stores, there’s no way it could be profitable with one store,” Mr. Boring said. “It probably seems counter-intuitive to the average person who shops there, but that’s the way retail is.”

Mr. Boring said The Andersons “are a unique animal among retailers ... but always was a throwback to the old days,” he said. “I’m kind of surprised they didn’t close them earlier,” he added.