VP Real Estate Duckwall-ALCO Stores, Inc.

Duckwall-ALCO was founded in 1901 as a general merchandising operation in Abilene, Kansas. Today the company operates 254 stores (187 ALCO stores and 67 Duckwall variety stores) serving smaller communities in 21 states in Mid-America. Buxton sat down with Vice President of Real Estate, Ed Brausa, to discuss what Duckwall-Alco looks for when they are expanding.

Question: What is the location strategy for Duckwall-ALCO?
Answer: Our mission is to be the best general merchandise retailer in America serving smaller, hometown communities.

Question: How do you define “small town?”
Answer: We typically seek towns with a population of 3,000 to 4,000 in a trade area with a population of at least 15,000.

Question: How many new operations do you open annually?
Answer: Historically we have opened about 10 new stores a year. Our goal in 2007 is to open 10 new ALCO stores.

Question: What are the major factors considered when selecting a community?
Answer: We first consider factors to determine the size and robustness of the local economy. Specific factors include:

• Viability and variety of other local businesses
• Presence of hospital or other medical facilities
• Preference for towns that are county seats
• Stable or growing school enrollment
• Presence of businesses that draw people in from outside the town, such as farm implement dealers and auto dealerships
• Growing stock of residential housing
• Presence in town of significant employers
• A community interest in supporting the business when it opens
• Seek communities that are at least 20 miles from a Wal-Mart, Target, Kmart or other general merchandise retailers.

Question: Assembling adequate retail sites is a major problem for many small towns. What is the size of your typical pad sites?
Answer: For a free-standing ALCO store, we need about 2.3 acres of land to accommodate a 22,000 square feet store plus parking. The Duckwall stores range from 3,500 to 8,000 square feet in buildings located in central business districts with no off-street parking. Off street parking is parking that is not on the public right of way (streets). The typical ALCO Store land parcel size (2.3 acres) is sufficient to provide for 70 to 80 parking spaces.

Question: After you find a site that fits the above size requirements, what other factors do you consider?
Answer: In general, location, visibility and infrastructure are considered with specific emphasis on:

• High traffic corridor convenient to customers
• Availablity of utilities in adequate capacity for our use
• Sites easy to develop, with no significant demolition, excavation or drainage work required
• Effective vehicular access from adjacent roads and highways
• Good visibility from adjacent roads and highways

Question: What can a community representative do to peak your interest in their community as a possible location for one of your operations?
Answer: Our interest is raised when we get information packets that specifically address the market characteristics and factors listed above.

Question: Have you ever located in stores that were vacated by other retailers?
Answer: If there is an existing building of the correct size in adequate condition, and in a good location, ALCO will convert the building for our use.

Question: How important to your location decision is the attitude of community leaders?
Answer: The attitude of community leaders is very important to us. They can have a significant impact on attitudes about supporting local businesses. We work hard to bring the convenience of big-store shopping to small towns. We need loyalty of customers in order to continue successful operations of our stores.

– Interviewed by Bill Shelton and Mandy Maas