When most retailers look for places to open new stores, they take into account economic indicators like job growth and new home building. Now, some retailers are considering another data point: drilling permits.
Home Depot Inc. has all but given up on opening new stores in the U.S., but the home-improvement retailer made an exception in January to open a store in an area it said it couldn’t pass up: Minot, N.D., in the heart of the American shale oil and gas boom.
“If you had said to me seven years ago, you’ll be opening a store in Minot, North Dakota, I would have asked, Why?” Chief Executive Frank Blake said in an interview. “One of the great stories of the U.S. is the shale oil development, and it’s happening in areas where we don’t have a lot of stores now.”
Home Depot is among a number of retailers including Wal-Mart Stores Inc. and GameStop Corp. targeting oil and gas towns in North Dakota, Texas and Louisiana, in an otherwise dour environment for retail real estate. The rise in online shopping and decline in foot traffic has led a number of retailers to scale back store construction and the size of the stores they do build.