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Ikea furniture on display in Paris. Photo: Julien Mattia/NurPhoto via Getty Images

Millennials aren't the only ones ditching the suburbs for the cities. Some iconic retailers — fighting to stay relevant as Amazon looms — are downsizing and shifting to city centers.

The big picture: As the density of the world's biggest cities keeps increasing, hopping in a car to drive out to a big-box suburban store 8 or 10 miles away is becoming a thing of the past.

Driving the news: Ikea has plans to open 30 smaller stores in big cities, AP reports. At 54,000 square feet, these are about one-quarter the size of a mall anchor like Macy's.

"Many people are still prepared to drive to big Ikea stores. But with growing choice online and improvements in delivery options, increasing numbers of people are becoming more reluctant to travel when they can shop online."
Neil Saunders, managing director at GlobalData Retail

Ikea is not alone.

  • Target has done the same, building a handful of mini-stores right next to college campuses.
  • And Walmart's new, futuristic Sam's Club Now — half the size regular Sam's Club stores and outfitted with cashierless checkout — opened in Dallas earlier this month.

But, but, but: "I don't see this as a revolution," says Neil Saunders, managing director at GlobalData Retail. The big stores in suburbs will survive, but at the same time, smaller urban locations will pop up to give shoppers choice.

What to watch: Amazon is once again leading the pack.

  • The e-commerce giant has built 18 bookstores across the country.
  • Now, it's carving a place in grocery with Amazon Go locations in major cities, in addition to its purchase of Whole Foods.
  • And the 4-Star store, Amazon's latest venture, which only sells products that have received 4-star or higher reviews online, offers everything from coffeemakers to toys to TVs.

Go deeper

5 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

5 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.