US retailer Lowe's goes small in Manhattan as big-box era fades

New York

AT the site of a former grocery store on Manhattan's Upper West Side, Lowe's Cos is tackling the ultimate challenge for big-box retail: going small.

In two weeks, Lowe's will open a store on the corner of Broadway and 68th Street that's just 30,000 square feet (2,800 square metres). The location is a quarter the size of its suburban home-improvement centres and represents the company's first foray into Manhattan in its 69-year history. But it's more notable as a testing ground for what could be Lowe's next sales engine - cities.

"We strongly believe that we have a growth model here," Richard Maltsbarger, chief development officer for Lowe's, said on Thursday during a tour of the store.

Lowe's is facing the same dilemma as many big-box peers: finding growth in a mature retail landscape. Back when the American suburbs were booming and filling up with shopping centres, opening gigantic stores on cheap land fuelled the industry.…