CNN: dip in sales, Walmart is downsizing. Are the Boycotts hurting?

Major big-box retailers have been shifting to smaller stores — and scratching around for more profitable ways to fill under-used spaces as they go about reinventing themselves. As consumers trim their spending and shift their shopping to cyberspace, American retailers are acting on a realization that many stores are too big.

"You have a massive rush throughout retail to get small," says Leon Nicholas of consulting firm Kantar Retail. "Honestly, I am not sure what's going to happen with a lot of these giant boxes."

Some retailers are becoming landlords, turning excess space over to other businesses. Others are trying to fill the space themselves by stretching into new products and services. Sears reached a deal to lease 34,000 square feet of space in Greensboro, N.C., to Whole Foods Market Inc. for a grocery store set to open in 2012. Sears will operate the remainder of the space in the store. Home Depot Inc. is selling off portions of its parking lots to fast-food chains and auto repair shops. Gap Inc. is reverting to a Russian nesting-doll strategy: after years of expanding by adding standalone stores such as GapKids and Gap Body, it is shrinking them and stacking them back inside its namesake Gap stores. Best Buy Co. last week became the latest retail chain to go smaller, announcing last week that it was slowing growth of new big-box stores this year in favor of adding 150 Best Buy Mobile locations, focused on smartphones. Best Buy, which already added musical instruments to its regular electronics inventories in an effort to fill floor space, is also getting into health and exercise equipment to better utilize its larger stores.

Wal-Mart Stores Inc. also said last week that it was accelerating the rollout of smaller locations — 40,000 square feet or less — after it reported a seventh straight quarterly decline in sales at U.S. stores open at least a year.