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Ritz Camera to Fill Potomac Video Space

Stores contend with shift from film to digital photography.

Potomac residents with one less place to rent videos will have one more place to process photos when a Ritz Camera Centers takes over the former Potomac Video space in the Potomac Promenade shopping center.

RITZ CAMERA Centers Inc. is a national chain based in Beltsville, Md. Ritz stores sell cameras and camera accessories and offer photo printing from film and digital media. The Potomac store will open in October.

Brooke MacDonald, a promotions specialist with Ritz, called the Potomac Village location a “hand-picked project” for the local company.

“We had been wanting to come into that area for a very long time,” MacDonald said. Potomac has the exact demographic profile that Ritz tries to target and a need for better digital processing options, she said.

With that in mind, the Ritz store will offer a higher-end inventory than in other locations. Ritz aims for retail stores of about 2,000 square feet and the former Potomac Video location — vacated in May — is slightly smaller, MacDonald said, but the difference shouldn’t pose a problem.

The terms of Ritz’s lease were not available and owners and managers at A.I. Combined Centers, which manages Potomac Promenade, did not return phone calls.

Ritz’s arrival continues a pattern of stagnancy in the Potomac Village retail market, where new arrivals have generally come to compete in existing markets rather than carve out new niches.

There are three places to get a haircut in Potomac, three dry cleaners, three pharmacies, and with Ritz’s arrival, four stores offering photo processing. Many of the niche-market newcomers, like the Gap and Imaginarium at River Road and Counselman Road, have failed.

Those stores left in 2003 and have remained empty since. In May, Eckerd Drug pulled out of a plan to take over the former Gap storefront and announced it would close the smaller, former family drug store in that shopping center that it operated.

THE CROWDED photography market is particularly surprising at a time when the rapid rise of digital photography has spelled predictions of gloom and doom for retailers like Ritz, which thrived on film sales, film processing, and sales of film cameras, which have higher profit margin than digital cameras.

Digital cameras outsold film cameras for the first time in 2003, but only by a narrow margin: 13 million digital versus 11.2 million film cameras.

The following year, U.S. retailers sold 18.2 million digital cameras versus 6.7 million film cameras, and by the end of 2005, digital cameras are expected to dominate the market with 20.5 million units sold versus 4.6 million for film — an 82 percent market share in units, and 94 percent of the market in dollar spent.

“The film processing market, of course, has been affected. … They’re struggling,” said Dimitrios Delis, director of marketing research for the Photo Marketing Association, the largest imaging industry group worldwide. In 2003, the number of film rolls processed dropped off 8 percent, then another 13 percent in 2003 and 18 percent this year.

“At the same time, we have had digital printing that’s offsetting some of this loss in film processing, but not 100 percent,” Delis said. “The net result has been negative.”

Many users of digital cameras simply store them on their computers or e-mail them to friends and family, cutting out printing altogether. Others purchase increasingly inexpensive photo printers from electronics stores and print at home.

"They're looking at the [display] and they're enjoying it, but we've got to get them to print it," said Tom Crawford, corporate communications executive at the Photo Marketing Association. "When people get it in their LCD, it's almost like that Polaroid thing, that instant gratification."

For those that do still want prints, photo laboratories have had to adapt to the shift. Many “mini-labs,” processing-only shops like the familiar one-hour photo stores in malls, were driven out of business.

But companies like Ritz, with research and marketing tools and a financial cushion at its disposal, were better poised to diversify, Delis said.

In fact, Ritz is growing. It opened 8 new stores nationally last month.

“Going into the digital camera market in the early stages, you really have to do your homework about where you’re opening your store,” Delis said. “You obviously have to go after areas that are more likely to have a digital camera and use it and make products and prints from it.” Potomac, he said, fits the bill.

The new Potomac store will offer sit-down kiosks where digital camera owners can bring in digital media cards and print photos as well as its ritzpix.com service, where users can upload photos and pay for printing on-line, then pick up the prints at a nearby store.

Snap Shops, in the northeast quadrant of the Village, is likely to be Ritz’s main competitor.

Chris Muller, a Snap Shops employee, said the store — also part of a chain — wasn’t worried.

“They’re a slightly different business. They do more in camera sales and we do more finishing,” he said. And Snap Shops has begun to make the same transitions that photo labs are making nationwide. Film processing has dropped off, Muller said, but “We make up those rolls with digital.”