After years in pullback mode, the Shopko discount chain is once again opening new stores and seeking to stake out a position that will set it apart from a wide and diverse group of competitors.
"At the end of the day, the idea is: How do we differentiate ourselves from Wal-Mart and Target?," Douglas McHose, senior vice president, store operations, told the Milwaukee Journal Sentinel. "There's a niche in the middle, between those low-price operators and J.C. Penney and Kohl's."
While Shoko has identified what it sees as its position in the market, it remains to be seen if its offerings address needs that consumers see as important at the current time.
Shopko is in the process of opening three new format stores, one in its Brown Country, Wisc. backyard and two others in Minnesota.
The newest stores, according to the Journal Sentinel, have "more upscale display walls and fixtures that give the discounter more of a department-store feel."
Where others such as Target have expanded grocery, Shopko has gone in the opposite direction to offering basically soda and snacks.
Shopko's current CEO, Michael MacDonald, who came to the company from Sak's former Northern Department Store Group, is focusing his differentiation efforts by playing up national brands and a higher quality private label selection in apparel, shoes, accessories and housewares.
Under Mr. MacDonald, Shopko has added brands including Asics, Bongo, Gateway, Kenneth Cole, LEI, Rachel Ray and Unlisted. The company has also opened a gift registry, with networked kiosks being added to all its stores by May.
Mr. McHose sees moves made by rivals such as J.C. Penney and Kohl's to go more upscale, opening a window of opportunity for Shopko.
George Whalin, president and chief executive officer of Retail Management Consultants and a member of the RetailWire BrainTrust, said regional chains have a tough row to hoe.
"There's too many retailers going after the consumer," Mr. Whalin said.
Britt Beemer of America's Research Group told the Journal Sentinel, "The question is: Does America need another discounter, given how strong Wal-Mart is, and Target?"
Discussion Questions: Is Shopko's new positioning an answer to the needs of enough consumers in middle-income America? Does being a regional retailer put Shopko at an advantage or disadvantage versus national chains?