Borders B'ham Bldg Leased

[Fulcanelli]

I just noticed today that the two-story building vacated by Borders of Birmingham, on Woodward, has been leased. Does anybody know what's moving in? I heard rumors a few months back that Barnes & Noble was interested in that spot, and another rumor that another large bookstore chain was considering it.

I for one really miss Borders. B&N has never been a bookstore I cared to patronize. And since Borders went bust, I've cut way back on books and magazines.

Damn you Borders, why did you go out of business? [[Actually I know they overstocked books and didn't get into the electronic reader game soon enough for big enough.)

[middetres]

http://birmingham.patch.com/articles...-borders-books

Walgreen's...just what we need...another drug store

[Wesley Mouch]

Walgreen's...just what we need...another drug store

Since Walgreens has chosen to invest in that location, I'd guess that it is what you need.

Been a while since I've been in downtown B'ham, but is it full of stores like Walgreens -- that is a pharmacy along with convenience foods and junk?

[Detroitgayhistoryguy]

I miss the Sly Fox, but I'm old.

[mwilbert]

Since Walgreens has chosen to invest in that location, I'd guess that it is what you need.

This is not sound thinking, even if you believe that the market does a pretty good job of allocating resources, because it doesn't allocate them on the basis of consumer surplus and because the chain drugstore market is an oligopoly. I will now spend perhaps more time than I should explaining why I say this.

Think about how useful is it to have two drugstores a block or two apart in an area where everyone drives everywhere. Unless you have some strong preference for Walgreens over CVS, it is slightly more useful than having one, at best. But this is something you see frequently, because the purpose here is not to advantage the consumer except incidentally. The second drugstore diverts traffic from the first, and its profits primarily come from that diversion. It is highly unlikely that a second drugstore increases the total volume of drugstore sales much, and those sales are where any consumer surplus [[that is, excess of benefit over price paid) from the existence of the stores has to arise.

From a consumers' point of view, you want something different from what exists nearby already, because the profits arising from that will be generated by giving the consumers something novel or, more likely, more convenient to buy and skimming a percentage of that benefit for itself, rather than primarily by diverting it from another business. Unfortunately, there is no reason to think that there is necessarily more profit to be made from such a business than there is from taking half the local drugstore business, hence the duplicative drugstores.

If there were a drugstore that was substantially different in some way from the others, [[perhaps some of you older folks remember the lines at the original F&M in Ferndale) or if the first drugstore had to lower its prices in response to the arrival of the second drugstore, that could provide additional consumer benefits, but in my shopping I don't see much evidence for that, which makes sense because the places I shop are in relatively built-up areas where there are various competitors within a reasonably distance, because the chains are essentially similar, and because their executives know that serious price competition would be ruinous--which is why the actual drugstore market is an oligopoly where smaller chains have been bought out and where the remaining competitors are restrained in their price cutting.

[p69rrh51]

This is not sound thinking, even if you believe that the market does a pretty good job of allocating resources, because it doesn't allocate them on the basis of consumer surplus and because the chain drugstore market is an oligopoly. I will now spend perhaps more time than I should explaining why I say this.

Think about how useful is it to have two drugstores a block or two apart in an area where everyone drives everywhere. Unless you have some strong preference for Walgreens over CVS, it is slightly more useful than having one, at best. But this is something you see frequently, because the purpose here is not to advantage the consumer except incidentally. The second drugstore diverts traffic from the first, and its profits primarily come from that diversion. It is highly unlikely that a second drugstore increases the total volume of drugstore sales much, and those sales are where any consumer surplus [[that is, excess of benefit over price paid) from the existence of the stores has to arise.

From a consumers' point of view, you want something different from what exists nearby already, because the profits arising from that will be generated by giving the consumers something novel or, more likely, more convenient to buy and skimming a percentage of that benefit for itself, rather than primarily by diverting it from another business. Unfortunately, there is no reason to think that there is necessarily more profit to be made from such a business than there is from taking half the local drugstore business, hence the duplicative drugstores.

If there were a drugstore that was substantially different in some way from the others, [[perhaps some of you older folks remember the lines at the original F&M in Ferndale) or if the first drugstore had to lower its prices in response to the arrival of the second drugstore, that could provide additional consumer benefits, but in my shopping I don't see much evidence for that, which makes sense because the places I shop are in relatively built-up areas where there are various competitors within a reasonably distance, because the chains are essentially similar, and because their executives know that serious price competition would be ruinous--which is why the actual drugstore market is an oligopoly where smaller chains have been bought out and where the remaining competitors are restrained in their price cutting.

To a certain degree you are right. Although on the eastside we have 3 CVS's a Walgreen's and a few independent Pharmacies all within a couple miles of each other. The pricing tends to be lower than Oakland Co. They must be making a decent profit to have so many here especially when half of the theoretical patrons do not exist because of the lake.

[detroitbob]

The Walgreen's at the Border's site is one of the new concept stores like their new flagship at State St. and Randolph in Chicago---the site of the loop Walgreen's a century ago. The store is patterned after stores in France and Germany and I frankly was blown away by it. High Tech, high end upscale wine, 'whole foods' style made to order sandwiches and salads, and the pharmacy and traditional drug store merchandise located on the 2nd floor along with a clinic and I believe dentist. Apparently this is concept has been successful and a nation wide roll out is planned including the Birmingham store. I suspect the atmosphere might be more subdued than the Chgo store, as it is in the mixed use high rise that includes the Joffrey Ballet headquarters and studio and high end condo's. Two story glass curtain walls probably won't be part of this design, but don't expect a stock Walgreen's.

the link to article and photos

http://winnetka.suntimes.com/busines...an-format.html

[Hermod]

Is it useful to have seven or eight shoe stores in a mall [[plus Sears, Penneys, Macys, and Dillards) all selling shoe? The concept seems to work.

Instead of a Walgreens, they could have opened "Wilbert's Fine Books, Bongs, and Music in that building. Why didn't they do that?

[Detroitgayhistoryguy]

There is already a Walgreen's and a CVS right next to each other at Coolidge and Woodward, just down the road. How many of these damn things do you need?

[softailrider]

Is it useful to have seven or eight shoe stores in a mall [[plus Sears, Penneys, Macys, and Dillards) all selling shoe? The concept seems to work.

Instead of a Walgreens, they could have opened "Wilbert's Fine Books, Bongs, and Music in that building. Why didn't they do that?

You were fine until you got to bongs, that wouldn't play in Birmingham.

[Hermod]

You were fine until you got to bongs, that wouldn't play in Birmingham.

I know. I was just trying to cater to the "arts, music, and culture" crowd.

My point was that Walgreen's ponied up the scratch to get the place and mwilbert did not.

[stasu1213]

I am surprised that B'ham planners and leaders would allow Walgreens to open in that spot. That suitable for another bookstore with it's upstairs and patio and not a drug store. Sounds like the Detroit way of thinking had rubbed off on Bham

[mwilbert]

Is it useful to have seven or eight shoe stores in a mall [[plus Sears, Penneys, Macys, and Dillards) all selling shoe? The concept seems to work.

Instead of a Walgreens, they could have opened "Wilbert's Fine Books, Bongs, and Music in that building. Why didn't they do that?

I guess my point wasn't clear. I'm not saying it doesn't work; I'm saying that the criterion for it working isn't consumer desire. The eighth shoe store adds a teeny amount of value for shoppers at the mall. But if there is a lot of demand for shoes at the mall, it may still be more profitable to run an eighth shoe store than the first bong store, even though changing a shoe store to a bong store would provide more incremental value to consumers--value to consumers and profitability do not have to [[and don't) align.

Imagine that there are six identical, profitable shoe stores at a mall. They split the shoe business six ways. Now an seventh identical store opens. It presumably [[eventually, anyway) gets a seventh of the business, which we will assume is large enough for them to be profitable. Is there any benefit to consumers at all? Not that I can see. Where are their profits coming from? From the business they divert from the first six stores, not from any consumer benefit. Any other store that sold anything would be better for consumers than the seventh shoe store. That doesn't mean that any other store would be more profitable, or profitable at all. Maybe they sell something that only a few people want, or something with very low margins.

Bookstores and drugstores, as in the Borders location in question, are a good example because people like bookstores, like having them around even if they don't buy much, and would probably vote for those over a second [[or third or fourth) drug store. And the drugstore chains are very close to identical. However, some of the benefits of a bookstore aren't captured in sales [[unlike drugstores--no one goes to a drugstore to browse) and because of fierce online competition bookstores aren't very profitable, while the much less competitive drug store chains are.

Certainly in general the retail mix is related to consumer desires, but the idea that the incremental use of retail space is strongly related to what consumers want is not justified.

[MikeyinBrooklyn]

[QUOTE=Fulcanelli;321714]
I for one really miss Borders. B&N has never been a bookstore I cared to patronize. QUOTE]

I think there were really 2 Borders. Borders before about 2003 and Borders after. They used to stock a larger variety of books than B&N, especially in my areas of interest, history and theatre. Their stores also had a super-comfortable, browse at your own pace feel. But in recent years, their selection was terrible, their newer stores [[in NYC where I lived at the time) were much cheaper with a Kmarty feel about them. They also never had a good website [[indeed, they directed you to Amazon), and they lacked a good membership program like B&N. I save hundreds a year on that. All they ever wanted at Borders was my email to send me coupons. I miss the OLD Borders, but I left them long before they finally closed.