Major retailers in 1985 sounded a common refrain for the Washington area -- a refrain that is likely to be repeated in 1986.
R. H. Macy & Co. disclosed plans to open at least two Bamberger's stores in Northern Virginia.
The Seattle-based Nordstrom Inc. confirmed that it is weighing plans to open its successful clothing stores here.
Caldor Inc., one of the nation's fastest-growing discount chains, disclosed plans to add two to four more stores here in the next two years. Its first was just opened last fall.
Meanwhile, Bloomingdale's is being wooed by District of Columbia officials to open a branch downtown.
With each new revelation, shopping centers recalculate their space and plan expansions so they can take advantage of the ever-growing retail business -- a move that draws even more interest in this area.
Fair Oaks Mall, only five years old, is planning to break ground next spring to add about 30 to 40 new stores to the 183 that are already open. Springfield Mall has opened a new wing of stores, adding about 24 to the 180 that have been operating there. Even more construction is in the offing, with Macy's now considering locating one of its Bamberger's units at that site.
Meanwhile, Tysons Corner -- under new management -- is planning to convert its sprawling parking lot into a double-decker parking lot to permit existing stores to expand their space and enable a few new large stores to open in one of the most successful shopping centers in the area. The reconstruction comes partly in response to the scheduled 1987 opening of the adjacent Tysons II shopping mall, which will include a Bamberger's and Saks Fifth Avenue.
"This market is rapidly becoming overstored," noted a local retailing official who declined to be named. However, the official added, "this market is like most in the country."
The new competitive pressure, however, certainly will benefit the consumer, who will be offered more choices as each retailer tries to offer the best price to grab hold or keep market share.
"The pressure will be on everybody," said Neal J. Fox, president of Raleighs Store Corp. "But certainly, the ultimate winner will be the consumer," he added.
"Customers will get to vote," commented Alan Pennington, head of the New York retail-consulting firm Pennington Associates. "They will vote with their dollars for the best retailers . That's the true democratic process, one that Washington ought to be very familiar with."
Although the pace at which new stores are moving into the Washington area is faster than that of most other cities, it reflects the current expansion phenomenon in the industry.
Faced with predictions of sluggish sales growth for the remaining part of the decade, many retailers have concluded that the only way to grow financially is by entering new markets.
According to the retail-consulting firm Management Horizons, retail sales will grow an average 2.9 percent a year, adjusted for inflation, between 1985 and 1990, with most of the growth occurring in the late 1980s. For the next two years, Management Horizons predicts, retail growth will slow to the point that in 1987 there will be an actual decline -- the result of a recession, Management Horizons says.
With such modest growth projections, the only way to add to the bottom line is to open new stores in new areas, said Daniel J. Sweeney, Management Horizons' executive vice president. "Even though a market may already be saturated with retail space, it may still be attractive to an outsider because every dollar they do is brand new money for them," Sweeney said.
Washington is an especially attractive area because it is one of the few where new mall space is being built.
"Five years ago, if a retailer wanted to expand, it could just go to a new center," noted Pennington. Today, with shopping-mall construction having crawled to a halt, "companies realize they don't have lots of places left to go."
That is one chief reason why Bamberger's is moving here and Nordstrom's is considering the metropolitan area, retail experts say.
It also explains why Sears, Roebuck & Co. and other retailers are moving into the rural market -- an area they have ignored in favor of the more populated and profitable urban areas. Today, Sears and other chains are experimenting with small-scale stores (between one-sixth to one-third the size of the traditional mall store) in hopes of boosting their sales growth.
Demographics also make Washington a prime market for newcomers, retailing experts point out. The Greater Washington Board of Trade calculates that the metropolitan area leads the nation with a median effective buying income of $36,002 per household.
"Retailers are taking advantage of what appears to be a very large, affluent, homogeneous market, with little brand loyalty," added Ed Weller of E. F. Hutton Group Inc.
The expansion here and elsewhere in the country means that the already competitive industry -- now trying to cope with the rash of specialty stores and discount chains -- will become all the more competitive in the future.
"Never has competition been so strongly felt as it is now," said Louis W. Stern, a marketing professor at Northwestern University. With the added rivalry, "we can just sit and watch as the industry is shaken out. The old established firms that have continued to bet on what they did well years and years ago will not be able to adapt to the highly targeted, highly specialized environment," Stern predicted.
Department stores may feel the greatest pinch, predicted Pennington. "Woodward & Lothrop Inc. and The Hecht Co. are good and solid, but they are not Bamberger's or Nordstrom's. They have not been in the vanguard of department-store retailing, setting the trends. That's one reason why Bamberger's probably decided to come to Washington."
Yet Woodies and Hecht's are determined that they will not be hurt. "We'll be in there plugging," said Hecht's Chairman J. Warren Harris. Noting that the new stores won't be in the area until the fall of 1987 at the earliest, Harris noted, "the market will have grown somewhat by then and will be able to accommodate them." But even so, he added, "we plan to be in good shape. All our stores will be remodeled by then. And we think we know and understand the market better than the newcomers."
Besides, said Woodies Chairman Edwin K. Hoffman, the new stores may help rather than hurt the existing chains. "You can't tell what [increased competition] is going to do until you know where all the stores will be located. I'd love for Bloomingdale's, Nordstrom's, Neiman Marcus and all sorts of stores to come downtown," he said, noting that it would only help increase traffic in Woodies' downtown store.
And at Tysons Corner, he added, even with the addition of Bamberger's, Saks and other stores, "We'll still be better off than we are today. The additional stores will draw more people into a tremendously compact area."