Counter Culture Hits Alaska: Part Two

We’ve found during our week-long escapade to Alaska an interesting retail climate.

Some popular local chains in the area aren’t all that interested in expanding, but they probably could do so and succeed. And on the other hand, national chains that seem to do well here, haven’t over-stored the area like they have other parts of the country when this area seems to have substantial demand.

We found two local chains especially intriguing, the 13-unit Kaladi Brothers Coffee chain (a company we’ll further discuss on next week) and Moose’s Tooth brewery and pizzeria, which also operates a restaurant-movie theater combo venue.

By all accounts Moose’s Tooth is a widely popular restaurant-bar operation, and when we were there on a recent Thursday afternoon, the place was packed with drinkers and diners. We think that the owners could easily open more locations, and Rod Hancock, one of the founders, says they are regularly approached by potential franchise operators from around the country, but he always declines.

However, Hancock acknowledges that some of his 350 employees – to whom he offers 401(k) packages, health insurance and profit-sharing benefits – are pushing him to open a new location, and he might do so in efforts not to lose their talent.

Meanwhile, Hancock is also first to admit that Anchorage has a strong demand for more retail and restaurant offerings. “I’ve seen 20 businesses that could do a better job servicing our needs,” he says.

Chris Stephens is a real estate broker in the area with Bond, Stephens & Johnson Commercial Real Estate Services who has tried to get many national retail chains to come into the area. He says the there was a wave of retailers like Wal-Mart, Petco and Bed Bath & Beyond that entered the market in the 1990s and then the movement largely stopped. Target and Kohl’s are just now coming, but it is still one of the few places in the US without a major presence by national drugstore chains.

Besides the roughly 280,000 people in the market, there are 70,000 to 100,000 people who live in rural areas of Alaska that come to Anchorage to shop, Stephens says. Additionally, the few chains with stores in the area have some of the largest sales psf totals in their portfolios.

“Retailers miss the mark,” he says of chains not adding more stores to the area. “They don’t realize that Anchorage is bigger than Anchorage.”

For our part, we were surprised when we saw the parking lot of the only Barnes & Noble in the city packed during the early part of a weekday afternoon. Chain restaurants we saw had full lots between traditional mealtimes as well.

But we also visited a mall of the east side of town that was almost dead. The place did have one thing going for it, though – a store that sells swords side by side with one of the larger wig operations we’d ever seen. On second thought, maybe the last frontier should never change.


3 Responses to “Counter Culture Hits Alaska: Part Two”

  1. 1 E July 18, 2008 at 9:10 am

    I’m as pro-business as anyone, but I think the retailers would be wise right now to gussy-up existing locations to encourage more customers to come-in. I don’t adding more stores further out on the “frontier” so to speak is the answer, especially in the current retail enviornment. Alaska retailers really have to study the overcapacity coffin our retailers have built for themselves down in the lower 48.

    It’s common sense — for the same investment or wee bit more now, the customers they’ve always had/have courted are coming to them. Who could ask for a better ROI? Don’ fix what isn’t broken.

  2. 2 Nancy H July 18, 2008 at 3:42 pm

    I think I agree – the slower pace, without a rush to expand…sounds wonderful. I guess the retailers that are unique to the area can appreciate the success they have, without having to be greedy about it. Maybe that is what makes them unique…and special…and worth traveling a little further to get to.

  3. 3 BOBBY ADAMS July 23, 2008 at 9:07 am

    I wanna know why the HELL they’re closing 600 Starbucks stores! I am a serious business traveler and I make tons of money buying and selling property. I love money. It makes me feel damn good.

    One of the ways I calm down is by buying a Venti capuccino at one of the thousands of Starbucks around this great country. Speaking of which, election day is coming up and I strongly encourage everyone to vote!

    So if they close 600 of these guys, it could put a crimp in my lifestyle, which I’m really not too happy about!

    Where the HELL am I gonna go to now, DUNKIN’ FRIGGIN’ DONUTS? “THE HOME OF THE WORKING MAN?” Gimme a break.

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