The store-within-a-store concept is likely to continue growing this year as merchants see such collaborations succeeding. Sephora "stores" in J.C. Penney and Peet's Coffee & Tea "shops" inside Raley's grocery stores may be helping the chains differentiate themselves from the competition. "Sometimes it's stronger to offer more than one brand, making it better for the customer. Sunglasses, electronics, music, whatever it is, it can create a better, more powerful mix. That's where we're heading," said NPD Group analyst Marshal Cohen.

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