Retail face-lift

We've all seen the headlines and heard the buzz about the three outdoor mega-stores, Cabela's, Bass Pro and Scheel's Sporting Goods, that are coming to northern Nevada. It makes us wonder, "Can our once-little towns of Reno/Sparks support such mega-stores and what effect will they have on our already existing outdoor and health oriented retailers?" It is also no coincidence that health food grocers like Whole Foods and Wild Oats are making a splash in our market as well. Our growing population is demanding more diverse shopping experiences. But having said that, only time will tell whether retail demand is strong enough for all to thrive in our market or will these Big Three outdoor retailers squash the competition. One thing is for certain, Reno/Sparks and northern Nevada is definitely experiencing a face-Lift.

Although Bass Pro has yet to announce the size of its intended store, Cabela's and Scheel's have announced their plans to build 150,000- and 250,000-square-foot stores, respectively. With approximately 167,000 square feet of existing outdoor focused retail space, there will be a significant amount of square footage to support. However, Reno/Tahoe continues to solidify itself as a world-class destination for all types of tourists including the outdoor athlete and sportsman. The market buzz and entertainment factor these Big 3 stores incorporate into their shopping experience and the convenience of all three locations being situated off either U.S. Highway 395 or Interstate 80 are expected to attract customers from surrounding states to help support sales.

Cabela's currently operates 18 locations strategically placed in 12 states. While Cabela's reports catalog sales or direct sales to be between 60 and 65 percent of its overall revenue, it continues to increase its retail presence by creating destination locations." In fact, with approximately four million visitors in its first year alone, it is reported that Lehi, Utah's new Cabela's store is the second-most-visited destination in the state of Utah, second only to the L.D.S. Temple Square in downtown Salt Lake City.

With respect to merchandise, Bass Pro and Cabela's are most similarly aligned, largely specializing in fishing, hunting, camping, outdoor apparel and footwear. Scheel's, on the other hand, is slightly different, priding itself on being the "All Sports Super-Store." Having a more generalized sports and athletic fitness inventory it also carries large selections of hunting and fishing gear. Scheel's, which is expected to open at the Legends at Sparks Marina in spring 2008, currently has 22 stores in seven states nationwide. Much like Cabela's and Bass Pro, Scheel's appeals to the overall destination location depending on sales not only from the local market but neighboring cities and states as well.

One of the dominant and primary catch-phrases to help attract newcomers to our area is the motto, "Live, Work, Play Here."

Retailers have certainly embraced our growth in the last several years and have recognized that people are truly falling in love with the quality of life northern Nevada has to offer. More and more people are migrating to the Truckee Meadows to either retire or raise their families and take advantage of the area's outdoor activities.

While the addition of big retail names is great for these consumers, the effect their presence will have on the existing smaller outdoor retailers is yet to be known. Reno currently supports such outdoor stores as Sportsman's Warehouse, Sports Authority, REI, Sierra Trading Post, Reno Fly Shop and most recently, Orvis at the Summit Sierra Mall. It certainly helps that these stores are already well-established with a solid customer base. You can bet there will be continued hype when these Big 3 mega-stores begin to break ground with construction and eventually open for business. With every one of these large outdoor retailers' grand-openings, there will be a natural honeymoon period as people flock to discover what the excitement is all about. The key to the smaller-box outdoor/sporting good stores weathering the storm is emphasizing to their customers their specialty niche, product knowledge, convenience, customer service and overall reputation. If those qualities are reinforced and maintained, they should be able to compete with their new and bigger competition.

To add to the Truckee Meadows healthy face-lift is the arrival of new health-food stores, namely the anticipation of Whole Foods entering into the market and Wild Oats' expansion in central Reno. With its new location at South Virginia and Neil Road, Whole Foods will occupy approximately 50,000 square feet specializing in fresh and organic foods. Similarly, Wild Oats was bursting at the seams at its current location of 17,000 square feet and will be expanding into 28,000 square feet at the Redfield Promenade later this year. It is natural to assume that those that love the outdoor life may also look to healthier food choices offered by these alternative food grocers.

Similar to the arguments with the outdoor retailers, we may see increased competition for some of the smaller sized health food stores already established in our market. This may hold true for our friends at Trader Joe's and Fresh Energy Bakery. However, both serve a specialty niche market and have a solid reputation among their customers for quality products and great customer service. Should they continue to build on what has made them strong in our community in the past, they should be able to weather the storm and the honeymoon period from their competitors.

These are exciting times for our community. Significant population growth has created the demand for exciting new retailers. There is an old saying in the commercial real estate business that "retail follows rooftops" and northern Nevada is in the midst of a retail growth extravaganza! As long as we have our spectacular and breathtaking mountains, lakes, rivers and vistas, people will continue to discover that Reno/Sparks is truly a great to live, work, and of course, play.

Janna Page is an associate broker for the retail properties group of Alliance Commercial Real Estate. Contact her at jpage@alliancereno.com.