LYNETT: We’ll get right up into the questions now. Compare shopping now to the way we shopped in the past. What are the most significant obstacles facing the retail sector and how are retailers are staying relevant?
McGRATH: We believe that shopping habits have always existed in an evolutionary and omni-channel experience. Today it’s more robust than ever — mobile apps, e-mail marketing, social media. And we see it moving forward to continue to be an evolutionary and omni-channel, in which both Internet and retail bricks and mortar will continue to coexist.
We can point to some real-time examples, one being Amazon, one of the premier retailers has begun now putting delivery boxes into shopping centers. They’ve also begun to open stores, like some other primary Internet retailers like Bonobos and Warby Parker.
NEWMAN: Shopping is evolutionary. People may not remember that it wasn’t until 1977 that the Pennsylvania General Assembly overturned the Blue Laws that prevented shopping on Sundays. Society changed, and so did consumer expectations. Similarly over 60 years you’ve seen consumer preferences move from main street, to the first shopping centers, to enclosed malls, to the big boxes, to lifestyle centers, and now online. And those changes have been driven in large part by changes in technology. Main Street was a creature of centering technologies, the trolleys that brought everyone to downtown. That’s what created the main streets of a hundred years ago. Suburban retail was created by a decentralizing technology, the car. Sears Roebuck … was the Amazon of its time. And it was created by the technologies of the U.S. Postal Service and the railroads that shipped the stuff that people ordered via catalogues. So today there’s online. But I think that one of the most significant obstacles that is facing the retail sector is the over-saturation of the marketplace. Today there’s more than 5 million square feet of retail space in the greater Wilkes-Barre area, and more than half of that has been added since 1988. The market’s population, obviously, has dropped somewhat during the past 30 years, but the retail square footage doubled during that same period of time. Today the U.S. has more retail square footage per capita than any other country in the world. It has 24 leasable square feet per capita, compared to 10 leasable square feet per capita in Canada, and half of that in most western, most other western countries. So you take that, and then you look at layering, you look at layering e-commerce and online on top of it, and there’s going to be some carnage.
LOMBARDO: Much like Larry, I’m a Main Street manager by virtue of my position in Pittston city, and I’ve spent 20 years, you know, really taking a hard look at it and trying to understand the evolution of how we got from the blooming days of the downtown to sort of the dark days of the downtowns that we’ve all experienced. Without the automobile you don’t have a mall. Without the Internet you don’t have the Internet shoppers. I think the real value though of the Internet is that it creates opportunities. It creates opportunities for startup companies that otherwise couldn’t afford to go out and hire huge marketing firms to get their product out to millions of people. And I think you’ll continue to see evolution in those areas. So I like the model. It’s really figuring out how we all work together, and how this all fits. And I think there’s still a place for main streets. I think there’s a place for malls in this equation. And I think the e-commerce part is an important part that really can feed that process right through.
FLEMING: I do agree with Michael’s last sentiments of there’s a bigger place for everybody to compete. But I’ve been in retail since 2004, opening up a brick and mortar, and the landscape has definitely changed from there. And the difference between now and then, one of the big differences is that there wasn’t social media back then. You competed with your neighbor. You competed with somebody down the street. Now the competition is everywhere. You’re competing with every single small-town mall-operated business across the nation. And that’s what the Internet brings. One of the solutions is that what Tim was saying - we need to have an omni-channel approach, so we are retail, but we also are a brand, as well. Because consumers are so savvy these days that they are researching before they’re even walking into your establishment. They are looking for deals. There’s definitely opportunity, but it’s very competitive, it’s very challenging, and you are really running on all cylinders all the time to operate a business in this climate.
FASULA: You know, as a food retailer, my perspective is a little different than most retail. Whenever there’s an economic downturn, they will issue more food stamps. They don’t issue more jewelry stamps or fragrance stamps. So we’re a little protected. And then the other protection against some of this Internet proliferation is that it’s very difficult to do fresh foods. And even canned and packaged foods are very difficult to transport because they’re heavy, and the margins are very thin. My perspective is there is an enormous pressure here, now, and coming, and it’s going to get even worse in terms of labor. There’s going to be a huge shortfall in the number of workers, and I think we’re going to see a lost wage pressure, which I’m very concerned will lead to a lot of inflation. And I’m also concerned about government intrusion. You know, we’ve been trying to open a store in the Poconos for over three years now. And it’s just been a litany of red tape from the local government and the state. It’s just been very, very, very difficult.
I think it’s important for us to recognize these issues and come up with solutions for them.
LYNETT: I think the Amazon mindset has created the “I want what I want and I want it now.” And I think for you that has meant now we’re going to start taking orders online and delivering. Do you see that as a growing business?
FASULA: Absolutely. We’ve had a tremendous growth in that over the course of last year. We launched our home delivery and picking operation back in September, and we’ve seen steady growth, especially when there’s big snow storm coming, because people don’t want to go out in it. I don’t see, at least not in the near future, them being able to do it via big shipping companies. It’s going to be too hard and too expensive.
McGRATH: I would contend that (when) people leave the downtown area, they do not come back on the weekends. They do not come back at night. They stay out in their prospective areas. They don’t come back to shop. Danielle was speaking to (what) I think (is) one of the big obstacles - knowing your customer.
FLEMING: The expectations of consumers today has also changed drastically. I think a lot of that is from Amazon Prime and the two-day shipping. We get customers that will place an order on a Monday and will call us on Tuesday and say, you know, has it shipped yet. They will literally walk in 20 minutes later and say “Where’s my order?” There’s some challenges of the expectations of consumers who are very savvy, but also have high expectations of their purchasing, and how it’s done, and when it’s done, and the speed at which it’s done.
DURKIN: So I sort of in my mind break it down in three different components. One is how do you use technology effectively in your business. The other side is sort of the obviously one people jump to mostly, and that’s the marketing side. Everybody has to have a website. Everybody has to be on the social media platforms. And it gets awfully cluttered. So the challenge to, you know, all retail I think is going to be what is your space on that, what’s your best way to use that effectively to market your operation. And then the last one, which is the one that really is sort of the quiet one, but it keeps emerging, and that’s the customer experience technology. And from the Chamber standpoint, we like to try to stay ahead of this, if we can, to provide you with information, and open some doors for you.
COLLINS: I think we would all agree that there is a historical precedent that the lifecycle of retail is continually changing. One of the things that has, you know, really changed over the years is that now the consumer is in some instances exceptionally educated, possibly more educated in some manner than the person that might be selling them the item. So how do we get those people back into, you know, looking at the main street concept, It’s not on those, you know, particular days of the week that you would see the usual customer. It’s any time. It’s 3 in the morning. We need to look at the evolution of the consumer.
McGRATH: You need to know your customer, but who is that.
When the millennials came, there was this frenzy. Everybody dropped everything and tried to court the millennials … clearly going after the new demographic, knowing that they have to catch them to survive in the future, but at the same time left their traditional customer standing there going what about us. And that is a real big challenge. Because the millennials are already kind of transitioning out of what everybody wants to target now, the retail industry. So the next group, and I’m not sure what term this next generation is.
LYNETT: It’s interesting that marketing has come up several times. And the issue, obviously, is that ad budgets aren’t growing, but where you need to be is growing. And the Internet is great, because you’re inviting the world in. But if you’re on Facebook only, then locally you’re only inviting in your Facebook follows. You’re not inviting in new customers. So the issue of managing your advertising budget and being in the right place is not being a JC Penney and forgetting your local formally loyal customers, it’s a major issue.
COLLINS: Where we see so many small business owners that are one-man shop that may not -- that have the expertise in their product and building their own brand, but then how do they translate that to the Internet to capture all of those, you know, all of the social media aspect for the marketing piece.
DURKIN: I think there’s a parochial aspect to this, too. Northeastern Pennsylvania is a bit different. You guys still have a bigger share of the newspaper market than most other markets of its size, correct?
LYNETT: Number one market in the country.
DURKIN: Which means that that’s a different mindset in this population. There’s got to be a balancing act. You got to know your customer base.
SAKOSKY: The way we shop is more of a generation gap for me. 90 percent of what I buy, I go to a store and I have to see I have to touch and everything else. And my kids are just the opposite. 90 percent of what they get, they’ll go on their smartphone, and tell they’ll purchase it, and they don’t need to touch it, to smell it, to feel it. And that’s just me, and that’s an older generation. And I found in our retail market, you got to figure out how am I going to make basically the most money. Do I do that online or brick and mortar? The small person doesn’t have a big inventory, but you’ve got to figure out how you can get the product fast and get it out. Bricks and mortar, they’re limited by space, too, but they have the advantage of people coming in, you can touch and feel it. You just got to figure out how to convince them to come to your place, be it online or be it in the store.
McGRATH: I contend that what retailers, major retailers have done for the last several years is incentivize people to the Internet. Now you’re seeing a little bit of glimmer of hope where they’re starting to incentivize the shopper back into the store. Walmart is one where they’ll provide a discount for you if you order online but pick it up in the store.
DURKIN: Correct me if I’m wrong. The conversion rate, if I’m using the phrase right, is so substantially higher on site for the obvious reason, what you just described. If you’re there, you see it. You’ve come to the trouble to go there. If you’re online, you go and look at something and, like, well, all right, I’ll come back to that. I don’t have to make my decision right now.
GHOSH: Shopping has changed over the years. Mostly because of one thing, and that has been kind of the main idea behind every time we talked about evolution of shopping, and a little concept that economists talked about back in 1950s and 1960s, and that can be captured as search cost. Cost of doing the search. The consumers want to know about pretty much the existence of products where they are, and the type of varieties that they might get. If you go back to, as pointed out, the catalogues, the catalogue stores, they were all kind of response to that search cost. QVC, shopping channels on TV came that way. Now, we have online shopping. Perhaps the most important concern that retailers should have, that is how to be responsive to this new, quote/unquote, new style of shopping, online shopping, but at the same time not forgetting that what was the traditional shopper. Who would have thought even few years back our second largest retail would be an online book store. You never thought about it then.
LYNETT: You’re on such a roll. Let’s go to the next question
FASULA: Can retail bricks and mortar survive in this new climate? Because in one of the things that Tim mentioned was that I think he said 80 percent is still purchased in bricks and mortar, can a retail operation with a, you know, occupancy cost of rent and lighting and everything else still survive. Because that 20 percent that you lose is what keeps you above water. That 20 percent is your profit, and it’s everything that allows you to continue to survive. So, you know, the question becomes is can they survive given that they’re going to lose 10 or 20 percent of their sales. And then if they can survive, it’s probably going to be in a much smaller footprint, which I think could be, you know, leading to even more of that unused retail space. So I think that’s -- it’s going to be a big issue moving forward.
GHOSH: But that kind of presumes that the size of the pie is fixed. It’s not. The way the American economy has grown in the post-World War period, that the total amount of retail sales, that volume and the dollar value has grown tremendously. And so -- and you would always have to face competition. Whether you face competition through from online merchants or somewhere else, you would be facing that. But still that 88 percent statistic that you talked about, that should be heartening for retail because it shows that even in this, in this very competitive marketplace, where we always think that online shopping has put a death nail on retail, and that’s not the case. So in spite of, and I understand your concern, but in spite of the fact that it is only 88 percent, it’s not 100 percent, it will never be. It will go town to 70 percent. Because there will be other ways of doing shopping, and we will, we will have to respond to that reality. But the fact remains that to what extent the scope of the retail spending increases, that becomes important. That if the economy grows, that even with that 70 percent, that could be very, very important, and very viable period. I think that is what we need to think about.
McGRATH: I would agree. And to your point, I think we’ll see the shift in people getting smaller. We, as a company, what we like to say is we got smaller, we got more nimble. We’re now better prepared to adapt with all these changes that are coming at us. So what we did was we took some of our non core assets and sold them off and are focusing on fewer assets to, again, invest all of our energies, and make sure that, we’re able to react to the market as it changes. I think you’ll see the national retailers getting smaller, sleeker, trying to integrate the experiential experience for the customer.
LOMBARDO: Downtowns that have repositioned themselves have done that around experience, and malls will do that, too. How many people in this room have said, you know what do you want to do tonight.? Let’s go to mall. What really is that? I mean, you’re not really purposefully going there for the latest pair of Nikes. You’re just going there to roam sometimes. And as a result of that you have food courts. And it’s not by accident that there are movie theaters that bump right up against or attach to malls. That model has changed a little bit. So it’s always been about the experience. And I think if you can refocus on what the experience is, then you can resell your product.
NEWMAN: And that’s exactly what has happened in the successful downtowns and the successful main streets. The fact is that Wilkes-Barre’s night time economy is booming. And it is anchored by precisely the sort of food and entertainment-driven anchors that you would expect. But I do want to go back to some of the other points that were made earlier. There is no question that, look, we’re talking about the latest disrupter to come into the retail sector, online. Well, yesterday’s disrupters are the ones that are getting disrupted today. There’s a billion square feet of vacant retail space right now across the country. A billion. And most of that is not on Main Street. Most of it is the stuff that was built 30, 20 years ago. Tim talked about the department stores. They were the titans of retailing in the 19th and throughout most of the 20th century, the defined retailer. There are 57 cities in Pennsylvania. They range from Philadelphia down to small cities, Pittston, Carbondale. Every single one of them had a main street with department stores. Today of those 57 cities there are three that still have a downtown department store. Three out of 57. You’re sitting in one. The other is the city that I come from. And the third is Philadelphia. That’s it. And it’s no surprise I think that two of the three stores that are still there happen to be Boscov’s. The Boscov’s on South Main Street in downtown Wilkes-Barre, and the Boscov’s a block from us here. And I think that that’s because as that sector has gone through its change, for a variety of reasons that are probably much too complex to go into right here, I think, you know, Al Boscov and his family and his team have been able to navigate some very difficult circumstances. But make no mistake, they are the exception to the rule. And I think that’s absolutely true as we look at -- you know, I know what’s going on with the traditional anchors with the shopping malls have had. That whole model for you guys is turning on its head because you can’t count on Sears and Penney’s
LYNETT: This is a great discussion. We have to move on to the next question. How does the local retail workforce stay competitive with the growth of online shopping?
GHOSH: And I’ll just modify it slightly. How does the local, independent retail (stay competitive)?
LYNETT: Sure.
GHOSH: If you cannot beat them, learn from them. Effectively, join them. The local independent retail faces the current disrupter, the presence of online merchants. So what you need to do … is basically have a great website. A lot of the young shoppers perhaps would not set foot in a store. They will buy everything online, and they really do not want to have that “experience” of going to a store, look at products and buy. Even if they’re not buying stuff online, they are using the online information to get information about the product that you may have. And if they are coming into your store, they’re coming with all the information they already have, they have decided that are going to kind of maybe give a final look at your product and then they would buy it. The majority of the shoppers already know what they are looking for. They’re just coming to make that final purchase from you, so it is up to you to make that sale. And it is up to the workforce to be knowledgeable about, knowledgeable enough about your own product that so that you can make that sale.
NEWMAN: We have seen the growth of Small Business Saturday in the United States, something that started only in 2010. So this year it will be 8 years old. And even though it is less than a decade old, this is something that I know talking to many of the independent retailers in downtown Wilkes-Barre, Small Business Saturday is now their best sales day of the year. It is exceeding Black Friday. They are thrilled. And I think the local retailers are getting better at building on ideas like Small Business Saturday to focus on the locally-sourced products, to focus on the independently provided products, to give people that connection that ties into experience.
GHOSH: If you cannot get a website going and some online presence, then you are not getting that customer who otherwise would be even coming to your store. And one of the things that you really do not have to have is an elaborate online presence. You can get started small and then can expand. Having a website maintained is not that difficult these days. It’s also less expensive. And one other thing that I was talking about, if you cannot really beat them, join them. Amazon Marketplace is a great thing for small independent merchants and vendors. And you can sell through Amazon Marketplace.
LOMBARDO: My philosophy is a little bit different. I tend to say if you can’t or don’t want to join them, beat them. The beauty of bricks and mortar stores, you can add value. If you can take your business to the next level and add value, then you create a set of requirements for the people that work at your business that require them to have at least some level of experience or training which allows them to demand, I think, a little bit better dollar in terms of what they get paid. So, really, that’s a better model in my eyes for the economy.
SAKOSKY: How many times do you go into a store and you’re turned off because the salesperson or the person you’re talking to really doesn’t know the product, can’t identify it, doesn’t know where it’s at in the store. Home Depot, when they first came out, they were fantastic. The salespeople knew everything about everything. And, unfortunately, now if you go into the store, the quality of the salespeople have dropped drastically. But on the other side of it, Home Depot is doing fantastic.
LOMBARDO: You’re absolutely right about that. Because I think in the beginning the models for those places like Home Depot and Lowe’s were to put people that had some understanding of plumbing in the plumbing section. And you go there now and you can ask -- if you know something about plumbing and you ask someone for a very specific tool, you know, a half-inch pex adapter, some of them look at you like what you are you talking about. So you have to do it actually the old-school way and describe it. That’s why the really interesting anomaly in the area is that there are some little ma and pop hardware stores that have done really well. Because you can go in there, not really having any technical background, have a plumbing issue, and actually somebody at the little hardware store can walk them through what they need to do.
GHOSH: But unfortunately a lot of those smaller hardware stores have gone out of business after Home Depot and Lowe’s moved to this area. So that is also one issue though.
FLEMING: I think for us, you know, it comes down to experience, service, and relationships. But I don’t think that solely exists in brick and mortar. But it doesn’t mean that we can’t create that experience online, as well. So when you walk into our doors, our brand has a certain look, a certain feel to it. You get a certain level of service and expertise. You’ll also find that -- and that’s what I think makes omni-channels success is that when you go to our website you should have that same feeling and that same connection, and you should see photos that look like the shops, and there should be a connection. And that connection also then needs to go onto social media. Our market is different for Instagram because we have a different age group than it is on Facebook. Our Clarks Summit location, we have a different marketing plan then we do for our downtown Scranton location. I think that experience can happen both in brick and mortar from the moment they walk in to them becoming a longtime customer. Our staff goes through two months of training before they even talk to a customer in the customer perfume studio experience. They need to be knowledgeable. They need to answer those questions. The landscape has changed but it is our obligation to stay competitive to address it,and to be there to provide exceptional service, to build a relationship so that they keep on coming back to us, and to provide an experience that, you know, is something that is both memorable and remarkable and consistent.
FASULA: So I must have read this question a little differently because I read this more as some advice on people who wanted to be in the retail workforce and what they should do. I think … retail … is a terrific industry. It’s very dynamic, it always changes, you never have a dull moment. One of the difficulties that we’ve had is the cost of college education. So many people are driven now to say I need to go to college. And I think there’s definitely a place for higher education no matter what. The problem is is that we’re spending so much money on this now that kids come out of school, they have all this enormous debt and they’re kind of committed to saying now I have to go get a job that’s going to pay me $80,000 a year. People that are interested in retail need to do a cost benefit analysis on higher education and say, well, maybe I should go for an associate’s degree or some sort of certificate, or go for specific classes to prepare myself for this industry, or look at more of the trades. You know, we’re very hungry in my business for cooks and bakers. We have a very difficult time finding them. And I’m thrilled that Lackawanna College is investing into their program the way they are for culinary, because that’s very important to us. We should be looking at things like apprenticeships or internships.
DURKIN: If you look at a corollary in manufacturing, 50 years ago, even 30 years ago, someone could graduate high school, get into a manufacturing enterprise, and be taught the job. Now you’re in a world where, from a manufacturing standpoint, the basic high school degree isn’t going to get you where you need to be on an entry level manufacturing job, or especially advanced manufacturing.
There there’s not a lot of room for training, and there’s not a lot of money for training. Speaking as one who worked for Kmart for three years in high school and beyond, yes, I could write a book about some of the things that happened, both within the enterprise and out. That was a great experience. Because I think that it helps you as both an employee later on, but also as a person to understand how to deal with people, you know, or better yet how not to deal with people, right.
COLLINS: I believe that when -- there’s a statistic that states that US e-commerce has grown almost 18 percent in the last eight years. So when I looked at that number, I thought, wow, that is an obstacle most definitely. But on the flip side I see it as a great opportunity, as well. because they have a duel opinion, they can have an online and an offline opinion. So they can have that word-of-mouth, you know, which really can drive productivity to their location, and then they can have that online, you know, opinion and brand, as well. I’m looking at it from the aspect of how do we give the consumer a reason to shop. Activities such as First Friday Scranton, that is a great opportunity for business owners to give that different experience. It’s not just coming in because you’re looking for that particular item, but maybe there’s an artist there that evening, or music, or you just want to even just get more acquainted with what’s, you know, in the downtown. I think that’s a great way of bringing people in for a different type of experience. We can look back to our own history, the Scranton Times, Pizza by Pappas, Coney Island Lunch, businesses within our own community that have survived the test of time. How have they remained competitive? Larry, you mentioned Small Business Saturday. For downtown Scranton, this Small Business Saturday this past Thanksgiving weekend was the best financially, the best weekend that the small businesses had in Scranton. We had over 50 businesses just purely in the downtown that participated this year. I do think that there is something to that old statement of what’s old is new again. Retail can survive looking at e-commerce as an opportunity and really not an obstacle.
LYNETT: Interesting you bring up, and a couple people have, the idea of when you go to a store you touch and you feel or you try on because this brand sizes don’t run the same as this brand sizes. And I’ve asked some people who do everything Amazon or online, I say how do you get beyond that. Well, free returns, you know. I just order two versions of it, and I send back the one that doesn’t fit. It’s different world.
LYNETT: With the closure of big box stores such as Kmart, how can empty space like that be repurposed and put back on the tax rolls?
COLLINS: So when I looked at this last question, I thought, wow, this is a really difficult question, It’s one of those questions that urban planners across the country are really struggling with. I’m not going to say I even have the answer, but I do think that we need to be proactive. When we even have the first inkling that, you know, a business like a Kmart is going to, is having difficulties, I think we start the process then.
DURKIN: The clear example of how to try to wrestle with this issue is The Marketplace at Steamtown. When the mall, ... was being sold .. I probably received about three calls a week, e-mails, letters, “this is what you should do. You should put a casino in there. You should put a water park in there. You should do this, you should do that.” At the end of the day the decision is not made by what I want to put in there, it’s made by whoever is going to invest into that. Just because you want it doesn’t mean it’s going to happen. There was a tremendous discussion (to) turn that into the Reading Terminal Market. Reading Terminal Market operates in a location with 8 million people. It’s not the same. What John Basalyga is doing over there I think is an excellent opportunity at the proper scale for Scranton. And we were certainly supportive of it in terms of the food court being transformed. And I think he’s doing it the right way, he’s doing it in a measured way.
LOMBARDO: You hit it right on the head. I think you have to be thoughtful about what you do, and I think you need to be careful, not to have to quick out of the box knee jerk reaction. You know, one of the reasons we look at history is to sort of not repeat the mistakes over and over, hopefully. If you look at main streets, their response to the malls were to do all kind of crazy things that at the end of the day really now has cost us. I mean, we’ve put huge panels on the front of the buildings, and covered second and third-story windows, basically rendering the upper floors useless. Larry jotted this down for me earlier. We had a building down on Main Street that was vacant. One of the things we’ve been able to do is capture Boden, which is an online retailer. We in the City of Pittston on Main Street have the only Boden store in the world. As Boden settled in, they moved it from three days, to four days. So now they began to dominate the space, and we know longer have this open space. For the first time in 50 years we have a new street retailer down on Main Street.
NEWMAN: In Wilkes-Barre I’m struck by the fact that the Woolworths on Main Street in downtown Wilkes-Barre was built as a Woolworths, and went out of business because it was driven out of business by the changes that put that generation of five-and-dimes on every main street in America out of business. That building now houses the world headquarters of Pepperjam, which is a startup that does search engine marketing for e-commerce, that in turn is helping to put out of business the retailers that put Woolworths out of business. The stockroom for Woolworths, is some of the most spectacular office space that exists anywhere in Northeastern Pennsylvania for the 120 people who work at Pepperjam. At the same time, as important as understanding how to repurpose buildings, not everything necessarily lends itself to repurposing. One of the malls that was originally developed by Tim’s old firm, (the) Schuylkill Mall in Schuylkill County, was opened in 1980. It was a big regional mall at the time. It was just sold t... last year for I think a sixth of what (they) had sold it to the next owner for. What the market demands along the I-81 corridor in Schuylkill County is not 700,000 square feet of retail space. What the market demands is a pad for 800,000 square foot industrial buildings that meet those specs that Bob was talking about that the distribution sector and the logistic sector is actually looking for. Now, not everything has to be that dramatic. In our market, Joe Amato, the developer Joe Amato, has done a fantastic job of figuring how to repurpose older obsolete shopping centers. I think about what he’s done with the East End Centre in Wilkes-Barre, where one of the big boxes is now home to KISS, which is the kid’s theater company for the Wyoming Valley. But every situation is different. Bob is absolutely right, the market is going to dictate what the right uses are. My office sits in the old Pomeroy’s Department Store on Public Square, and it has been an office building now for 30 years, and it works very, very well, but that’s not always going to be the best use for the site. And I suspect that as time goes on we are going to see more and more obsolete retail space in country going the way of the Schuylkill Mall.
McGRATH: There is no magic bullet. You know, we consider the Sears acquisition, the capture of Sears and what we were able to achieve there a true success story. The way it was done, and the timing in which we were able to do it, turn it around from 13 months from recapture, to demolition, to reconstruction, which is unheard of in these, you know, days and times. But, really, the simple fact of the matter is we believe it’s strategic planning, and it is being proactive, which we’ve all talked about in certain capacities. The first thing people say to us when a store closes at the mall, why don’t you get these guys, why don’t you get these guys, why don’t you get these guys. Well, ... they all have their own game plan. They have five-year plans themselves.
DURKIN: From the example of the abandoned store versus yours, you control the space. So being able to strategically plan it and move forward, as opposed to what do we do with something that has fallen on hard times.
McGRATH: Well, and that’s actually something that, you know, we are seeing a lot of. I mean, we went from 27 Kmart (stores), malls with Kmarts and/or Sears, now we’re down to seven. But to the point of that and, like you said, we do own it and we can repurpose it, but the similarities are that we have to get creative. So we’re seeing -- malls … originally designed as enclosed community centers …. being repurposed in forms of school, places of worship.
DURKIN: Medicine.
NEWMAN: Sometimes the changes are driven by the changing demands of the retail business. So, Joe, perfect example is how supermarkets have changed in size. What you started out with decades ago was a fraction of what you are looking to build today. I’m sure probably at least double or triple the size of what your original stores were.
FASULA: The first store was a little meat market. And then, you know, the first supermarket was 15,000 square feet. Now we’re building 45 to 50.
NEWMAN: Acme Markets was the big chain, and they had these 15,000 square foot buildings all over the place, which eventually went away for larger models and Acme pulled out of Northeastern Pennsylvania. Most of those stores today are not grocery stores, the ones that are still in use. They’re drug stores or Family Dollars, because the drug stores have actually grown to need that size footprint, and they happen to be generally in high traffic locations in those communities. And then there are retail concepts like a Dollar General or a Dollar Tree or Family Doctor that simply did not exist … that now find those boxes useful. It’s remarkable how the market actually ends up driving so much of what occurs. It has to be both aspirational, but also possible.
GHOSH: The challenge to repurpose old retail space is really something that the urban developers always think about, as Leslie pointed out. Finally it boils down to basic works of demand and supply. And that very well could be defined by the community needs. And on the supply side, what that particular space is providing, that very well could be the structural things that are being provided, it very well could be dependent on the location of that particular space. And if there is at some point meeting of the demand and supply, then we will see kind of a whole plethora of different types of things that may show up in that particular retail space.
DURKIN: I’m not saying just sit back and wait for the market to take place. Look at what the resource is, see what possible uses it could have. And if there are elements that are not related to the physical structure, you know, like financing or other, you know, transportation, access points, things like that, the community can take care of those if it so desired.
NEWMAN: I would actually argue that it’s a function of a profession that doesn’t actually get enough attention or respect, specifically in Northeastern Pennsylvania, which is planning. This is the job of planners. And too often in this region we don’t spend enough time planning. We think we do.
DURKIN: We react.
NEWMAN: We react, but we are not, we are not planning. I say that, of course, as a planner. But, you know, that’s -- it’s an issue. You know, planning is taking what the community wants to see, what its desires and hopes for the futures are, and merging it with what the market demands are, what the demographic demands are, what the land use demands are. And that’s where so much of this conversation should be occurring. And, unfortunately, in this region, we’re not doing it nearly as much as we should be.
SAKOSKY: Well, we’re the owners of that building you were talking about where the theaters was, and our progression through what happened there, unfortunately, is not as calculated as you had said that your plans were. When the theater decided to close … it was a stroke of luck that this guy came to the door -- he somehow had the vision to change that building that was a theater into his office space and a meeting hall for the church. And it was just pure luck. Everything I did failed. And then this guy comes in with a vision and it worked. And it worked out fantastically. And I think the Kmart building up there ...someone’s going to come in with a vision, and .. he’s going to come with a vision, and he’s going to have adequate financing to see what he can do and not do. In the end, I think somebody’s going to surprise me and come up there and do it because they have a vision of what they want in there.
LYNETT: All right. We’re going to get you out on time. Thank you all very much again for being here, and for being such willing participants, and being very conversational. It’s nice to have the back and forth. I want to wish everybody luck in catering to and learning from our new customers while maintaining our traditional customers. It’s the same problem we’re facing with the changing readership habits of our own readers here at the paper. But it’s exciting. There’s opportunity to learn and to evolve. Thank you all again for being here.
Moderator:
George V. Lynett Jr.
Publisher
The Times-Tribune
Lynett earned a Bachelor of Arts from the College of the Holy Cross, Worcester, Massachusetts, a diploma in business studies and industrial relations from the London School of Economics and a Master of Business Administration from Georgetown University. He was commissioned in the Navy in 1996, leaving the Naval Reserve as a lieutenant commander in 2006. Lynett lives in Waverly Twp. with his wife, Katey, and their four children.
Panelists:
Robert F. Durkin
President and CEO, Greater Scranton Chamber of Commerce
Durkin took the helm of the chamber in September 2013. Before that, he served for 12 years as president of the Northeast Regional Cancer Institute. He is a graduate of Penn State University, has undertaken advanced studies at the Institute for Public Administration at Penn State University and completed studies at the U.S. Chamber of Commerce, Institute for Organizational Management at the University of Delaware. Durkin and his wife, Sherry, reside in Olyphant and are the parents of daughter, Jessica, and son, Kevin.
Joseph Fasula
Co-owner
Gerrity’s Supermarkets
Fasula is co-owner of Gerrity’s Supermarkets with nine stores in Lackawanna and Luzerne Counties. Gerrity’s was established in 1895, employs over 1,100 people and is headquartered in Scranton. Joe, along with his mother, Joyce “Mom” Fasula, together assumed control of the supermarket chain after the death of Neal Fasula. They converted five stores to the Gerrity’s format, which brought the total number of locations to nine. Joe and his wife, Sandy, are also the co-owners of Fire and Ice Restaurant on Toby Creek in Trucksville. He holds a bachelor’s degree in Business Management from the University of Scranton. He is father of three children.
Danielle Fleming
Founder and CEO
Note Fragrances
Fleming is the founder, CEO and olfactive “nose” behind Note Fragrances, a boutique perfumery and custom perfume studio with its flagship location in downtown Scranton, and a newly opened second location in Clarks Summit. Fleming honed her craft at Firmenich, the world’s largest privately held fragrance house, as a senior consumer insights analyst. She obtained a bachelor’s degree in psychology from Moravian College, a master’s degree in mental health counseling and a M.Ed. in instructional leadership from Marywood University. She resides in Dunmore with her husband, Mark, who co-owns the business with her.
Dr. Satyajit Ghosh
Professor of economics
University of Scranton
Ghosh has been teaching at the Kania School of Management, University of Scranton, since 1986. Until summer 2010, he was chairman of the economics and finance department — a position that he held for more than 15 years. He has a Ph.D. in economics from the State University of New York at Buffalo. An expert in the areas of economic development, economic theory and policy, Ghosh has written numerous scholarly articles on economics and presented in academic and professional conferences all over the world.
Michael Lombardo
Mayor
City of Pittston
Lombardo is the business development director at Quad 3 Architectural and Engineering Services. He is a 1986 and 1988 graduate of Bucknell University where he received an undergraduate Bachelor of Arts Degree in psychology and a Master in Education Degree in school psychology and clinical counseling. Upon graduation, Lombardo worked for 20 years in public education serving in various capacities including school psychologist and special education director. He is serving his third term as mayor of Pittston. Lombardo lives in Pittston with his wife, Susan Donovan Lombardo, and twin daughters, Catherine and Kristen, both seniors at Notre Dame University.
Timothy B. McGrath
General manager
PREIT Services/The Viewmont Mall
McGrath is the general manager of the Viewmont Mall in Scranton/Dickson City, owned by Pennsylvania Real Estate Investment Trust, or PREIT Services. He is a certified shopping center manager through the International Council of Shopping Centers and is a Pennsylvania Real Estate Licensee. He has been GM at Viewmont Mall since 2001. Prior to joining PREIT, Tim worked in the public sector at both the federal and county levels. He was the Northeastern Pennsylvania regional director for United States Senator Harris Wofford and at the county level, he was chief clerk to Lackawanna County Recorder of Deeds Evie Refalko McNulty. McGrath resides in Dunmore with his wife, Heather, and their children Burke, Mary Grace and Robert.
Leslie Memolo-Collins
Executive director
Scranton Tomorrow
Memolo-Collins serves as the executive director of Scranton Tomorrow since 2006. In this capacity, she works to develop initiatives that will improve the quality of life in our region. Prior to joining Scranton Tomorrow, Memolo-Collins was the deputy director for the City of Scranton’s Office of Economic and Community Development, serving as the liaison to major economic development projects including the Casey Laundry Building, Southern Union headquarters, the Ice Box, Riverfront Sports, and Sauquoit Industries. She graduated from the University of Scranton in 1987 with a degree in marketing. She lives in Clarks Summit with her husband and daughter.
Larry Newman
Executive director
Diamond City Partnership
A Wilkes-Barre resident, Newman earned a Bachelor of Architecture from Princeton University and a Master of Architecture from the Harvard University Graduate School of Design. He is the founding executive director of the Diamond City Partnership, Wilkes-Barre’s nonprofit downtown management organization. For the past 17 years, he has planned and overseen Downtown Wilkes-Barre’s revival. He previously served as the Greater Wilkes-Barre Chamber’s vice president of economic development and as an urban planner in private practice.
Robert P. Sakosky Jr.
President
Daniel Siniawa & Associates LTD
Sakosky started to work for the company when he left the U.S. Navy in 1985. After managing a hardware store for over a year, Daniel Siniawa brought him into the main office to help him with the real estate business. Over the years that followed, Siniawa took Sakosky under his wings and taught him the real estate development business. Sakosky is the president of Daniel Siniawa & Associates LTD on Commerce Boulevard in Dickson City. He is married to Annelle Sakosky and they reside in Scott Twp. They have seven children.