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NEW RETAILERS WILL TAKE FROM EXISTING STORES

Grace Downer walked out of the new Kohl's Department Store in Orchard Park on Friday impressed with what she'd seen inside.

"It's very good," the West Falls resident said, sure that her first visit to the store wouldn't be her last.

That's good news for Kohl's, which had shoppers lined up more than 20 deep at both of its checkout lines as consumers rushed to check out the new store and cash in on $10 gift cards the chain mailed to many residents.

But Downer also was quick to show why the entry of powerful new retailers such as Kohl's and the Lowe's home improvement chain into the Buffalo Niagara market is bad news for all of the other competing stores in the region.

"I don't think it will make me spend more, though," Downer said.

Unfortunately, the Buffalo Niagara region isn't a hot market, like Atlanta or Phoenix, where new retailers can carve out a nice niche from a swelling customer base as people pour into the region.

Here, with the region losing population and incomes growing slower than the rest of the nation, there's only so much money that consumers have to spend at the area's stores. In other words, the retail pie isn't getting any bigger, and every slice that a new store takes leaves less for the stores already here to fight over.

So the money that ends up in the cash registers at Kohl's and Lowe's only means that less money is going to be spent at Home Depot, J.C. Penney and most other retailers here.

"It puts extra pressure on the existing retailers," said Arun Jain, a University at Buffalo marketing professor. "Unless they wise up, they'll lose out."

It also puts more heat on the region's shopping malls, since the new Kohl's and Lowe's outlets all are big stand-alone stores in plazas, making them more powerful magnets for consumers. "The pressure will be on the malls to bring the customers into their stores," Jain said.

That means focusing on shoppers like Colleen Sikora of South Buffalo, who came out Kohl's after a morning shopping trip with her two children lugging a big bag of new clothes. "I could see myself spending more here now because they have a huge variety," she said. "I think it will be more convenient to get in and out of here compared with the mall."

Those changing dynamics are especially easy to see in the Southtowns, where the addition of new Kohl's and Lowe's stores near the Five Corners intersection in Orchard Park is creating a more powerful retail center that now includes stores like Target and Stein Mart. That will only lure shoppers away from the retail center that has built up since the mid-1980s around the McKinley Mall in Hamburg.

How it all plays out, of course, will depend on how the malls and the stores respond. "The malls aren't doing anything special to bring customers in," says Jain, who thinks old-line retailers like Sears and J.C. Penney have the most to lose from Kohl's arrival here. He thinks the survivors will be the stores that emphasize customer service and selection, while offering upgraded shops and a fun, entertaining shopping experience.

"They always want to fight on price, which to me is a no-win strategy that bleeds the stores white, while the customer laughs all the way to the bank," Jain said.

We've already seen a hint of that, with Kaufmann's offering another of its popular 20 percent off sales this weekend.

Sure enough, that makes shoppers like Nancy Witkowski of West Falls very happy. She liked what she saw at Kohl's and thought some of their prices -- especially on sale items -- were competitive with Wal-Mart.

But Witkowski -- a big Kaufmann's fan -- didn't even need to finish her warning for stores that don't keep on their toes: "If they don't keep this up with giving us an incentive to come in . . ."

e-mail: drobinson@buffnews.com