Retail choices grow outside Anchorage

Posted: Monday, December 27, 2004

ANCHORAGE - In 2004, big box retailers turned their attention away from Anchorage to Alaska's other large communities, bringing huge buildings and hundreds of new jobs to Fairbanks and the Matanuska Valley.

For the first year since 1999, a big box store has not opened in Anchorage, according to economist Neal Fried of the Alaska Department of Labor and Workforce Development.

Some national retail chains have opened new stores in Anchorage, including Petco Animal Supplies and punk and gothic retailer Hot Topic, but since these stores don't employ more than 100 people they don't technically qualify as big boxes.

Overall, Anchorage's retail sector was expected to gain 300 new jobs in 2004, an increase of 1.7 percent to 17,800 retail jobs, according to the state labor department's May 2004 employment outlook.

While Anchorage didn't see much growth in the retail sector this year, other parts of the state have. Construction of big box stores in Fairbanks helped make 2004 a huge year for construction in the state's second-largest community.

"We have had quite a building boom going on," Mayor Steve Thompson has said. "Our biggest year prior to this one was in 1985."

About $80 million, in 1985 dollars, was spent that year on construction within Fairbanks' city limits, compared to more than $141 million worth of construction in 2004, said Steve Shuttleworth, building official for the city of Fairbanks. Of that $141 million, Shuttleworth estimated that more than $50 million went to building new retail stores.

Lowe's Companies invested about $18.5 million to open its new store Dec. 21, according to spokeswoman Jennifer Smith. The 116,000-square-foot store, with an additional 28,000-square-foot garden center, added about 175 new retail jobs to Fairbanks.

Lowe's joined a small but growing list of big box retailers in the northeast corner of Fairbanks. Home Depot was the first to set up shop in early 2002 and Wal-Mart opened its doors in late April of this year.

At more than 160,000 square feet, the new Wal-Mart store is the company's largest outlet in Alaska, containing a vision center, portrait studio and Tire & Lube Express among a wide range of services. Assistant manager Marcellne Deering said the store employs more than 450 people.

Shuttleworth said he thinks the presence of these big retailers has encouraged additional retail development and capital improvements in Fairbanks. He added that the construction of such national chain stores is a sign that the host community is economically stable and poised for growth, giving other developers confidence Fairbanks is a profitable place to do business.

People living in communities in and around the Matanuska Valley no longer have to drive to Anchorage to shop because everything they need is available at home, said Cheryl Metiva, executive director of the Greater Wasilla Chamber of Commerce.

"Basically Wasilla is the heart of the Valley from a commercial standpoint," she said. "We are the focus of the big box stores that are coming in."

Home Depot opened a 102,000-square-foot store with a 35,000-sqaure-foot garden center on Oct. 28. Of the store's 128 employees, about 80 percent, or 100 people, were hired from the local community, and the rest of the staff moved to the Valley since beginning work, said store manager DJ DesJardine. Five out of the store's seven managers were Valley residents when they were hired, he said.

By transferring some of Home Depot's employees who already lived in the Valley from its store in Anchorage to the new store in Wasilla, retail jobs have also opened up in Anchorage, DesJardine said.

Lowe's opened its first store in the Valley on Dec. 13. The store and its adjoining garden center total more than 140,000 square feet and employ about 175 people, according to a Lowe's statement released in May.

With an increasing number of big box retailers calling Wasilla home, small- and medium-size retailers are quickly moving in too, Metiva said.

"Anytime the big box stores come in, the smaller merchant has a fear that it will overshadow them. But what I think it does is bring in more people, more dollars that get spread out," Metiva said.

Metiva said national retail chains draw more customers to the area, and since big box stores don't provide everything their customers are looking for, smaller retailers see increased customer traffic as well.

"It's win-win for everybody," she said. "It's creating more of a focal point. You don't need to leave the area for anything."

The new stores also increase competition in the retail sector, which Metiva said is a good thing for other stores because it encourages them to improve inventory and focus on customer service. On the flip side, the presence of small- and medium-size stores forces large retailers to become more customer friendly.

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