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Batteries Plus Powers Up Demand in Small Town America

Even as some retailers cut back on opening new stores and building out new concepts, battery retailer Batteries Plus is expanding to small-town America.

The Hartland, Wis.-based company has started a new "store within a store" concept called the Dealer Program to sell batteries for everything from laptops to remote controls to cell phones. The program allows hardware stores and farm supply stores in smaller towns to sell a portion of the retailer's inventory in a 20-foot by 24-foot center located within their stores. Store owners can choose from a pre-selected group of about 300 batteries to sell in the center. Another 2,000 additional items are available for next-day delivery.

John Twist, vice president of franchising and business development, says the concept will give consumers access to specialty batteries they may otherwise not have been able to find close to home. "There's absolutely unmet demand for these types of batteries in small-town America," Twist says.

The program is meant to target markets with a population usually considered too small to support a full store. The chain operates 350 locations overall. The typical Batteries Plus store is located in a market of at least about 75,000 people. The new concept, meanwhile, targets markets of about 10,000 to 40,000 people. "We think that's the sweet spot," Twist says.

The company opened its first center in February inside the Grande Ace Hardware store in Virginia, Minn., and Twist says two more centers are slated to open soon. Twist says sales at the first location have so far exceeded the company's expectations, although he did not offer specifics. Sales at Batteries Plus overall have also remained strong despite the more than year-long recession that has led other retailers to report steep sales declines. "We've proven to be pretty resilient," he adds.

Part of the retailer's resiliency may be due to consumers' inability to afford something new. A new battery for a laptop can cost about $150, while a new laptop can cost more than $1,000. Twist also says the company may be benefiting from both a rise in the number of electronic gadgets that require batteries and a rise in the number of laptops purchased in the past few years.

In the third quarter of 2008, laptop sales exceeded desktop sales worldwide for the first time, according to El Segundo, Calif. market research firm iSuppli Corp. More laptop sales now likely means consumers will need new batteries a few years in the future. Meanwhile, more gadgets are coming into the market that require batteries from digital cameras to PDAs and even battery-operated dog collars. "The timing is perfect," Twist says of the Dealer Program. "The battery categories continue to expand."

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