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Major retail chains gird to contest Bel Air market

THE BALTIMORE SUN

Several retailers soon will be waging war in Bel Air, with battles to be fought on two fronts: Kmart vs. Target and Best Buy vs. Circuit City.

Kmart already has a store in Harford County's shopping hub -- at U.S. 1 and Route 24, in Tollgate Marketplace.

Target Stores, the country's third-biggest discount chain in sales volume, will move to Bel Air this fall. A 107,000-square-foot store will be just a stone's throw from the Kmart facility, on the Bel Air Plaza side of Route 24.

"If I were Kmart, I wouldn't want Target moving in across the street," said Sheldon Grodsky, director of research for Grodsky Associates, a security brokerage firm in South Orange, N.J.

"It usually results in tougher business conditions and could result in a reduction in sales."

Kmart is the nation's second-largest discount chain; Wal-Mart, which has a store at Route 24 and Interstate 95, is No. 1.

Dick Ungham, who has been a Kmart store manager in Bel Air since 1981, agreed with Mr. Grodsky. "We'll have to be more competitive. It's great for the consumer but it will cut our profit margin," he said.

"To be honest, I'd rather not have Target here," Mr. Ungham said. "I don't understand why officials even allowed them to come into Harford County. There are enough retailers in the area already."

Town commissioners take a different view of the commercial district. They approved expansion plans for each of the four shopping centers surrounding the U.S. 1-Route 24 intersection, claiming Harford will be able to support several new businesses.

As Kmart awaits Target's arrival, Best Buy Co. Inc. is opening a store in the Harford Mall annex behind Hecht's at Route 24 and Boulton Street. Employees are busy stocking shelves in preparation for the store's grand opening Aug. 4.

In October, Best Buy's chief foe in the consumer electronics field, Circuit City Stores Inc., will set up shop less than a mile away, on Route 24 behind Tollgate Marketplace.

When the chains are fully established in Bel Air, residents will witness firsthand the fierce competition between the two companies, financial analysts say.

"Typically, both flood the market with advertising and special promotions when they enter a new market, so at first, pricing will definitely be sharp," said retail analyst John Hughes of Piper Jaffray, a brokerage firm in Minneapolis.

"In the long term, there probably won't be an all-out price war. Although value pricing will still be important, they'll focus more on selection, format and service."

Value pricing means the company offers customers low prices, resulting in smaller profit margins.

Circuit City is No. 1 in U.S. consumer electronics market in sales volume. Best Buy is No. 2. Town officials said the large retail chains were attracted to Bel Air because of population growth in nearby Churchville, Abingdon and Forest Hill.

"There are about 190,000 people living in Harford County now," said Carol Deibel, director of planning and community development in Bel Air, a town that had 9,630 residents in 1990, the last year a census was taken. "Retailers realize this is an area they need to serve."

Town officials said they do not intend to discourage large retailers from moving to Bel Air.

"We can't restrict trade in commercial zones," Mrs. Deibel said. "It's a constitutional question. It would be like saying there's already five lawyers in Bel Air, we don't need a sixth, so you can't come in."

Also, new businesses provide Bel Air with additional revenue. About 58 percent of the town's $5.1 million operating budget for fiscal 1996 is coming from property taxes.

"The new businesses will strengthen the town's tax base and offer our citizens increased job opportunities and more shopping options," said Bel Air Town Administrator William McFaul. "Increased traffic congestion is the only downside."

About 5,100 motorists pass through the U.S. 1-Route 24 intersection during the busiest hours, from 4 p.m. to 6 p.m. weekdays, said Chuck Brown, a spokesman for the State Highway Administration.

To ease some of the traffic congestion at the intersection, a new road is being built. Named Marketplace Drive, it will run across Route 24 and link Bel Air Plaza to Tollgate Marketplace.

Target is paying the full cost of the road, which town officials said will open this fall. Company officials would not say how much it will cost.

Commercial expansion in the town center will not be limited to large retail chains, Mrs. Deibel said. Several smaller businesses also will be vying for attention:

* M.J. Designs, an arts and crafts store, will open next year on the Tollgate Marketplace side of Route 24. Two other stores also are expected to open there.

* A 6,000-square-foot Outback Steakhouse will be built on U.S. 1 between Tollgate Marketplace and the Amoco service station.

* The McGill Development Co. plans to build a 6,000-square-foot store in Bel Air Town Center. The addition, which will be attached to Blockbuster Video, has not been leased.

* Petsmart, a discount pet supply store, will open a 25,500-square-foot store between Best Buy and the Greenery Hardware and Florist Shoppe in the Harford Mall annex early next year.

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