BusinessReport.com

Amid a dramatic 25 years of change, the Baton Rouge area lost longtime retailers such as Goudchaux’s, gained one-stop shopping with malls and big chain stores such as Wal-Mart and toughened independents on how to do business better.

“The store closings that come to my mind in Baton Rouge are Goudchaux’s, Rubenstein’s and D. H. Holmes,” says Dawn B. Johnson, executive director of the 700-member Louisiana Retailers Association. “These stores were staples in the Baton Rouge community. The current climate is not as clear as it once was. Now you have stores merging and changing their names every couple of years. There are many new stores opening up and coming to our area.”

Despite independent retailers facing intense competition from chain stores and Internet shopping, Johnson says “moms and pops” are not disappearing. Consumers have benefited from larger stores’ one-stop atmosphere, product variety and lower prices. Meanwhile, many independents reinvented themselves by focusing on unique products and excellent service.

Norman Landry agrees there’s been a lot of change in the area retail market since he joined the Mall at Cortana (then Cortana Mall) as its general manager in 1978. Landry also recalls losing many chain department stores, including Parisian and Service Merchandise. Others underwent a series of buyouts and name changes like McRae’s, which became Foley’s and then Macy’s.

“Thirty years ago, they [shoppers] were limited where they could go,” he says. “There wasn’t a downtown shopping district, and Cortana Mall and Bon Marché were the places.”

Since that time, shopping opportunities have considerably expanded beyond the Florida Boulevard-Airline Highway area to other areas like Bluebonnet Boulevard and Siegen Lane.

There were once only open-air centers—places like Bon Marché, Westmoreland and Delmont Village—then came enclosed malls, Landry says. The latest retail trends are lifestyle centers such as Towne Center at Cedar Lodge or development of a community such as Perkins Rowe that includes retail along with residential units, medical facilities or motels.

Shoppers also have become more sophisticated in seeking value-oriented shopping, Landry says. For them, market changes have translated into diversified offerings and locations.

Catering to customers is nothing new at the family-owned Calandro’s Supermarket. Co-owner Sonny Calandro says his customers like to party and have a good time, so his supermarkets offer gourmet foods, excellent wine, service, meat and produce. That strategy has earned customers who have had accounts with the store since it opened in 1941. The family opened its first location on Government Street, followed by a Perkins Road location.

While Wal-Mart has been a factor in his stores’ evolution, he’s observed Mid City’s revitalization in recent years. Residents’ children are refurbishing their parents’ houses to live closer to the city. Many who left are returning as more condominiums are built in the area.

“We’re in the heart of the city,” Calandro says of the Government Street store. “Everyone who lives here wants to stay here. Our area is not as populated, but it’s coming back because they don’t want to stay in their cars four hours a day. People are tired of commuting. Those who do stop in the store in the afternoon have an hour to shop. Then the interstate is clear, and they get home with their groceries.”

J.H. Campbell Jr., president and CEO of Associated Grocers in Baton Rouge, agrees the arrival of store chains such as Wal-Mart forced dramatic and good changes in the marketplace in the past 10 years.

“Most of what you see is some very large, regionalized players, and many are privately owned or family-owned businesses,” says Campbell, who has been with his company 25 years. “It shows you a family-owned operation can effectively compete because they’re so adeptly connected to their customers’ desires.”

Mass merchandisers such as Wal-Mart and Target changed the competitive landscape for traditional supermarkets, Campbell says. Retail outlets discovered selling food generated more visits, so they started selling groceries as they broadened supermarkets’ one-stop concept.

A GOOD MARKET: Bon Marché, which began as an open-air shopping center in 1960, became Baton Rouge’s first enclosed mall in 1971. When Cortana Mall opened less than a mile away in 1976, Bon Marché lost customers and tenants.

To deal with intensifying competition, traditional supermarkets focused more heavily on high-quality perishables such as deli services, baked goods, prepared food, produce and meat, he says.

“It’s evolution. For some, it’s a disaster and, for others, a challenge and opportunity,” Campbell says. “If you didn’t have a competitor, you’d have no reason to try and improve, so you want to always improve and have a better offering—whether a product or service—meeting the needs of your consumer.”

For a while, Campbell says, grocers feared an “Internet threat,” which didn’t materialize because consumers still want to see or touch perishables.

The Baton Rouge overall market, he says, has been growing since hurricanes Katrina and Rita in 2005.

“I think we have a good market in the Baton Rouge 10-parish market, and it can extend to the bayou parishes. The areas that are higher and drier from Katrina are flourishing,” Campbell says. “It’s more diverse and affluent than before—and yearning for legitimate variety, selection, customer service, etc. So there’s unique opportunities in the marketplace because of this.”

At Billy Heroman’s Flowerland, owner William J. “Buzzy” Heroman recalls a more sparsely populated Baton Rouge, when there were gravel roads and Airline Highway was more the center of the city.

“We could run drivers three times in three different directions and still lock up and leave at 5:30 p.m.,” says Heroman, who established his Baton Rouge business 53 years ago. “Now, we’ve got three stores strategically placed for LSU, downtown, Garden District and Highland Road, etc., and from Gonzales and near Zachary. The customer base has spread. Our longtime customers have moved one to three times, so we just continue expanding our delivery zones to accommodate them.”

Big-box stores have brought a new approach to the market, he says. “They’ve created the mentality in most people that it needs to be on sale instead of what’s the quality and fair price for the fair value. [The chains]… play games to get there, and it isn’t the quality it should be.”

Competing with Internet sellers has become an issue in the last six to eight years for his business. Heroman says Internet sites sell inferior products. He worries they will hurt the industry and make it more difficult for everyone to do business.

SHOPPING SKELETONS: Both D.H. Holmes department stores and 7-Eleven convenience stores are signs of retail change in Baton Rouge, with Dillard’s having bought D.H. Holmes and Big Gulps long gone from the area.

These competitive pressures have meant working with less price elasticity, but he says his shop has countered by working smarter and more efficiently.

“The main thing we do in our business is our quality and our service,” Heroman says. “And we make sure we can maintain it all the way through the chain.”