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Retailers Put Brakes on Expansion

As economy lags, big chains open fewer stores

By Zach Samalin,  Newser Staff

Posted Dec 7, 2007 2:15 PM CST

(Newser) – America's biggest retailers are beginning to ease up on the construction of new stores, reversing the if-we-build-it-they-will-come trend of recent years, CNNMoney reports. Faced with decreasing sales in a slowing economy, chains such as Wal-Mart, Target, Starbucks, McDonald's, and Walgreen either have cut back on new stores or are considering doing so.

"If Plan A was to expand at all costs, many of these companies are now considering Plan B, which is to take a more cautious approach to capital expenditures," said one analyst. That includes close scrutiny of existing stores with an eye toward boosting profits. Closures were up 12% in the first half of 2007, an industry group said.

The front entrance of a Target store in Cupertino, Calif. is seen Wednesday, Nov. 7, 2007.  As retailers reported their sales results on Thursday, Dec. 6, 2007, warehouse club operators like Costco Wholesale Corp. and discounter Wal-Mart Stores Inc., which were able to keep crowds coming with special offers, proved...
The front entrance of a Target store in Cupertino, Calif. is seen Wednesday, Nov. 7, 2007. As retailers reported their sales results on Thursday, Dec. 6, 2007, warehouse club operators like Costco Wholesale...   (Associated Press)
A woman leaves a Wal-Mart store, Wednesday, Nov. 7, 2007, in Mayfield Heights, Ohio. Wal-Mart Stores Inc. on Tuesday, Nov. 13, 2007 posted third-quarter profits of $2.86 billion and upped its projected earnings for the year as it heads into the holiday shopping season. (AP Photo/Tony Dejak)
A woman leaves a Wal-Mart store, Wednesday, Nov. 7, 2007, in Mayfield Heights, Ohio. Wal-Mart Stores Inc. on Tuesday, Nov. 13, 2007 posted third-quarter profits of $2.86 billion and upped its projected...   (Associated Press)
  (Getty Images)
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