Discount retailer's 'Big' expansion in Eagan
Wednesday, October 26, 2011
Big Lots differs from other discount retailers in that it sells nearly every kind of closeout, discontinued and overstock merchandise including clothing, home decor, furniture, electronics and nonperishable food.
Though this business model works well for Big Lots and its consumers, it can present many challenges for manufacturers, said Lorman Lundsten, marketing professor and department chair at the University of St. Thomas.
“It hurts manufacturers relationships with other retailers,” he said.
Some retailers who pay full price feel they are being treated unfairly when they see Big Lots receiving discontinued merchandise at a significantly discounted price, Lundsten explained.
Lundsten is also skeptical that Big Lots will complement its Eagan neighbors.
“What you want for a shopping center is fairly similar economic level stores that complement each other,” he said. “Here we have a store where people will shop a Big Lots and go away again.”
Regardless of these issues, Lundsten predicts Big Lots and other discount stores will continue to grow as consumers hunt for bargains during the recession.
“The current economy is a good windfall for them,” he said. “I think they will be around for a long time.”
Originally published: 10/26/2011, Dakota Co. Tribune Business Weekly