Modern Retail: Why apparel brands are investing in storesread more >>
Retail Dive/Placer: Smooth sailing for (most) off-price retailers read more >>
The Future of Commerce: Catering to the Omnichannel Consumer read more >>
Sources: Retail Dive, Chain Store Age, Creditntell
Aldi announced plans to open 150 new stores in 2023, with new locations in Maryland, Virginia, Delaware, and Alabama already operating and serving new customers in those areas.
Barnes & Noble plans to open between 30 and 35 stores and close between 10 and 15 units, for a net growth rate of 2% – 4%. The new stores will be a mix of sizes, between larger 30,000 square-foot stores and others as small as 8,000 square feet. Management said its expansion plans are limited by the labor supply, as it is difficult to find experienced staff and managers. The Company expects sales to increase in the high single digits to the low double-digits for its current fiscal year.
Bath & Body Works plans this year to close about 50 mall-based stores and open 90 off the mall. Last year, most of the 48 stores that the retailer permanently closed were in malls, while 95 new off-mall stores opened in North America.
Best Buy’s 2023 plans include closing 20 to 30 large format stores, implementing eight Experience store remodels, and opening about 10 additional outlet stores. Changes to Best Buy’s brick-and-mortar store formats and routine store updates and maintenance will equate to $200 million in capital expenditures.
Chipotle announced a new restaurant concept, Farmesa, specializing in fresh, customizable bowls ranging from $11.95 to $16.95. Chipotle is partnering with the ghost kitchen operator Kitchen United Mix to initially offer Farmesa’s menu from a single existing location in Santa Monica, CA, before evaluating further expansion. Previous attempts by Chipotle to expand beyond its traditional burrito concept into pizza and Asian cuisine did not fare as well and were sold to other operators.
Home Depot announced that beginning in the first quarter, it will invest an additional $1 billion in annualized compensation for frontline, hourly associates. The tight labor market and rising wages may be pushing Home Depot to boost its hourly pay, but they also are helping to keep its customers coming through its doors.
Dick’s Sporting Goods is buying online outdoor retailer Moosejaw from current owner Walmart for an undisclosed amount. Dick’s will run Moosejaw under its Public Lands outdoor business, launched in 2021. There are brick-and-mortar Moosejaw locations in Arkansas, Colorado, Illinois, Kansas, Michigan and Missouri.
Kohl’s has named Tom Alves as Chief Operating Officer effective in April. Mr. Alves comes to Kohl’s with over three decades of experience in retail at Bealls, TJX, and Hudson’s Bay Company. He will oversee all supply chain, real estate, and other store related operations.
Kroger’s 70,000 square-foot ‘spoke’ delivery center in Austin, TX began operating earlier this month to support fulfillment for grocery orders in the Austin market as well as San Antonio. The Company announced plans for the facility last year, as well as for a 67,000 square-foot spoke in northeast San Antonio, which became operational in late October 2022. That same month a 50,000 square-foot spoke began operating in Oklahoma City, OK. All three spokes serve as last-mile cross-dock locations and further the reach of Kroger’s delivery service from a 350,000 square-foot, Ocado-powered customer fulfillment center in Dallas that became operational in July.
Macy’s move to exit declining malls and open smaller stores in strip centers and other off-mall locations has been so successful that the department store may accelerate that shift sometime next year. At the five Market by Macy’s that have been open for more than a year, Q4 comps rose 8%, and at the one Bloomie’s open that long, comps in the period rose 12%. For now, plans are to open four new Market by Macy’s and one Bloomie’s this year, CEO Jeff Gennette said, noting that these stores perform best when they share a location with off-price retailers or grocers.
Target announced a $100-million investment to expand next-day delivery capabilities through the addition of more than six new sorting centers. The retailer plans to grow its sortation network from nine to more than 15 facilities by the end of 2026. The company said the centers will expand next-day coverage “across major U.S. markets,” though didn’t specify locations. The company plans to double its shipment volume from these centers in 2023 to 50 million packages.
Walmart has shut down a pair of stores in Bentonville, Arkansas, and Lincolnwood, Illinois, that offer only pickup and delivery service, marking the end of a nearly decade-long experiment by the retailer aimed at improving convenience for e-commerce customers. Walmart is also closing 6 additional traditional supercenters over the coming weeks. Meanwhile, the company also announced plans to open 28 new Walmart Health centers in 2024, giving it a total of more than 75 locations by the end of the year. The expansion will increase Walmart Health’s footprint into two new states — Missouri and Arizona — and also deepen in Texas, with new locations in the Dallas metro area and Houston.
As inflation impacts consumers’ ability to spend in 2023, one bright spot in the retail landscape has been dollar stores. Both Dollar Tree and Dollar General have led store opening lists for the last several years with over 1,000 new units each annually. Dollar General has also seen success with its new suburban focused concept PopShelf that puts it in competition with another big retail winner, Five Below. However, as dollar stores become ubiquitous in rural, urban, and suburban markets from coast to coast, some citizens don’t welcome their new low-price neighbors with open arms. Michael Corkery goes behind the backlash to dollar stores in this piece from the New York Times. Read more (gift link, no paywall) >>
Few sectors have seen more change brought about from the pandemic than movie theaters. While cinemas shut down in 2020, movie buffs embraced the convenience of streaming services for entertainment. On reopening, many blockbusters found their box office receipts failing to recoup big Hollywood budgets. As a result, over 3,000 screens have closed since 2019 and several top exhibitors are in dire financial straits. However, this may be one story where the sequel is better than the original, as several theater owners are reimagining the cinema experience around comfortable seats, high end food, and adult beverages.
Our video of the month comes from the hilarious minds at It’s a Southern Thing, where we get a behind the scenes look at just how Dollar General is able to open so many stores. Watch here >>
It’s often said that shopping in America is the same no matter where you live. And it’s true that you are likely to find the same stores in the same demographically similar neighborhoods in Illinois as you do in Texas or North Carolina. There are certainly exceptions to that of course, but by and large American consumers shop similarly no matter whether you are in the Midwest, the Southeast, New England, or California.
Yet, as I’ve had the privilege to tour Big V assets in a variety of markets over the last few months and have gotten to know both our portfolio and our competition, I’ve noticed that what sets an asset apart is not the collection of big boxes on offer, but the placemaking efforts that we and other landlords make to connect our spaces to our communities.
They say everything is bigger in Texas, and The Rim in San Antonio certainly exemplifies that slogan with over 1 million square feet of space and residential and hotel spaces integrated within the footprint of the shopping center. Few large format centers I’ve seen are as thoughtfully laid out among different retail uses than Rim. The mass of restaurants and entertainment are at the heart of the project, with a “village green” gathering space in the middle for use by families from all around. It’s like a self-contained city more than just a “shopping center”.
In North Carolina, Birkdale Village in Huntersville actually feels like an old vibrant semi-urban neighborhood with a main square and big, shady trees belying its 21st century construction. Blakeley Town Center on Charlotte’s south side adapts the Rim’s multi-faceted approach with a more walkable layout that feels more tailored to a Southeastern lifestyle.
Closer to my home in the Midwest, Mellody Farms in Vernon Hills, Illinois somehow manages to make a collection of junior anchors replicate the experience of strolling through the diverse mix of buildings and restaurants you might find in a Chicago neighborhood like Lincoln Park (but without the parking hassles). Mural art and selfie walls will make you forget you’re on the northern edges of the Chicagoland suburbs.
In retail real estate, we often think about our product in terms of formats and asset classes. In reality, those distinctions say little about the relevance or quality of a shopping center. It’s the little things than can turn what might be derisively called a “strip center” into a vital part of a community by paying attention to local architecture and culinary trends that enhance the feel of the marketplace.
Mike Jordan
SONG OF THE MONTH
On March 2nd, we lost one of titans of jazz over the last 60+ years with the death of saxophonist Wayne Shorter at the age of 89. Shorter was born and raised in Newark, New Jersey and cut his teeth in the world of be-bop and its more freewheeling blue collar cousin “hard bop” in the 1950s and 60s. In addition to a phenomenal run of solo albums on Blue Note and a long-running stint with Art Blakey & The Jazz messengers, Shorter joined up with Miles Davis’ legendary quintets of the 1960s and was a pioneer in the rock and funk-inflected sound of fusion; both with Davis and with Joe Zawinul and Jaco Pastorius in the 70s and 80s as part of the legendary band Weather Report. In between all that, Wayne helped to bring attention to Brazilian sounds when he collaborated with Milton Nascimento in the 70s. Shorter was a committed Nichiren Buddhist and also a die-hard fan of comic books, releasing his final album “Emanon” in 2018 complete with its own graphic novel that augmented the music within. If you’re not familiar with Wayne Shorter, I’ll leave you with the song “Virgo” from my favorite album of his, 1964’s “Night Dreamer”
