For Patricia DeGroot, until recently the proprietor of Cafe Patricia’s on Jefferson Street in downtown Naperville, the presence of national chain stores in the city’s quasi-quaint old center arouses “really big mixed feelings.”
On one hand, she said, “it’s good for downtown. Naperville is beginning to become metropolitan, with Starbucks, Einstein’s Bagels and the Gap. It does attract more people.
“But it takes away from the personality of a little downtown with little unique stores. And it does hurt us individuals.”
DeGroot should know. A few weeks ago she closed her cafe, which was smack dab up against a Starbucks–so close that the chairs and tables outside her cafe would jostle the Starbucks sidewalk furniture.
Two years ago she took over an ice cream store from the former owner. She found she had to start selling espresso coffee as a defensive measure, because parents who brought in their kids for ice cream would get a yen for specialty coffee.
It was a battle from the start.
“A lot of people, when they think of coffee, automatically think right away of Starbucks,” she lamented.
DeGroot faced a phenomenon that is affecting suburbs throughout the Chicago area and the country: National retail chains are opening stores in the little downtowns that just a few years ago contained only a few local merchants and were often semi-moribund, strangled by shopping malls.
Starbucks has set up shop from Downers Grove to Elmhurst to Park Ridge to Evanston, and often, if you toss an empty espresso cup, you’ll hit a Gap or a Bruegger’s Bagels or Einstein’s Bagels not far away.
“They’ve found they can do business on the streets,” said Mary Ludgin, director of investment research for Heitman Capital Management, a real estate advisory firm. “They used to think only in terms of strip centers and regional malls. But they’ve found a certain liveliness in downtowns.”
Starbucks, in fact, is trying to create that vibrancy as a matter of policy. The Seattle-based company, which started back in 1971 with one location at Seattle’s colorful, open-air Pike Street Market, looks for urban settings. It has a whopping 70-plus stores in the Chicago area.
“We think we can make a difference and bring urban-type environments back, which we`ve done,” said Yves Mizrahi, Starbucks vice president for real estate and store development. “It saddens all of us to look at these downtowns and see how they’ve been affected by regional malls. We assist in the revitalization of a downtown.”
Starbucks sometimes gets together with other national retailers, such as the Gap, to discuss going into a downtown to create a critical mass, Mizrahi said.
And, he added, a Starbucks often may stimulate the opening of other local restaurants–a dynamic that may have occurred on Main Street in downtown Downers Grove, where a micro-brewery restaurant has opened and a bakery-restaurant is in the offing, both since a Starbucks went in near the train station.
Of course Starbucks seeks communities with the right demographics in terms of size and income levels, but that hasn`t been much of a problem in the Chicago area.
“Suffice to say that the majority of these suburbs do meet our parameters,” Mizrahi added.
Some suburbs like Hinsdale and Lake Forest were always ritzy enough that their downtowns weathered the mall threat nicely, and others, like Evanston, were coming back from low points well before the trendy chains saw an opportunity.
Evanston, for instance, already had a number of espresso coffee shops before Starbucks came in.
“It was already a proven market,” pointed out Robert Teska, president of Teska Associates, a planning firm with a special division that works on small downtowns.
But even where the downtowns are already reasonably healthy, the chains can help bring a new level of activity.
“They’re sort of the booster rocket. Once the missile is in the air, the booster rocket engages,” Teska said.
“It’s a good signal for any community where a national chain puts its powerful resources in a downtown,” said Jonathan Perman, executive director of the Evanston Chamber of Commerce.
In downtown Evanston, Barnes & Noble and Borders bookstores, Einstein’s and Bruegger’s bagel shops and a St. Louis Bread Co. restaurant as well as a Blockbuster music store have all opened within the past couple of years–in addition to a Starbucks. There also is a Gap Compagnie Internationale Express clothing stores. All these chains are within about two blocks of each other.
“They still make up a fairly small percentage,” said Perman. “What we want to come up with here is a mix, in hopes there will be the recognition and familiarity factor of the nationals along with the independents.”
The entry of chains into small downtowns has been going on for awhile and stems from a variety of factors, according to Teska.
For one thing, malls have saturated the country and retailers looking to satisfy stockholder-driven demands for growth have to find new sites, he said.
For another, rent and assessments in regional malls are extremely high; downtown locations require fewer sales to be as profitable as the mall stores.
But the key factor cited by some analysts is a search for community, especially among aging Baby Boomers.
Brad Edmondson, senior writer for American Demographics magazine, wrote several years ago that celebrating community would be a theme of the 1990s as Boomers burned out on their careers, put down roots and became more family-oriented.
“They’re seeking a sense of place and identity with the community and so they’re supporting downtowns more than they did 10 or 15 years ago,” said Teska.
Boomers are finding “the typical nondescript regional rubber-stamped shopping center useful for many trips but not to have the character or ambience of a downtown,” he added.
That trend fits in with another retail phenomenon, Teska noted.
“Entertainment is the biggest word in retail today. Traditional downtowns have always been entertaining, versatile places, where community events occur, where you bump into friends,” Teska said.
“Shopping centers have had one purpose only–to get people into the stores and out. Now shopping centers are going whole-hog to build in entertainment, like cineplexes or new restaurants. But entertainment in shopping centers is like a carnival midway, where downtowns present an entertainment package that is much more civil.”
There is the danger that the chains may kill local businesses. That’s especially worrisome in light of the possibility that the chains themselves may kill each other off after having killed off independents. In Evanston, for instance, chain bookstores are going head-to-head after swamping local booksellers.
“The nature of the economy is to produce winners and losers,” said Teska. “That makes it difficult for the average hometown residents to have competitive businesses downtown. It has had negative impacts.”
But he added that the chains also spur the locals to become competitive again.
“That’s not only to their own advantage, but to the downtowns as a whole,” he said. “One of the reasons they were deteriorating is the local retailers have been asleep.”
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Next week: Housing plays the leading role in enlivening areas close to downtown Chicago.
