April 13, 2022
Last Friday, Amazon called for an election rerun, after workers at a New York City warehouse voted to create the Company’s first U.S. union, saying that the U.S. labor board and worker-organizers suppressed turnout. The Amazon Labor Union (ALU) rejected the allegations made by Amazon, which made its demand a week after the victory for organized labor. Some 55% of employees who voted from Amazon’s JFK8 warehouse in Staten Island opted to join the ALU, which has argued for higher pay and job security. Turnout was about 58%. Amazon also accused the ALU of intimidating workers and distributing marijuana to gain votes in its favor, according to a Company filing. The U.S. National Labor Relations Board now must process Amazon’s objections before certifying the election result. The timing for this is not clear.
Objections were filed by the Retail, Wholesale and Department Store Union, claiming Amazon interfered in a union election at an Alabama warehouse by prohibiting employees from discussing the union during work hours or posting literature about the effort. The union is seeking to void the election results.
Meanwhile, employees at more than 100 U.S.-based Amazon facilities have contacted Amazon ALU President Christian Smalls about unionizing their workplaces since the union victory last week. The ALU plans to hold a "national call" with employees at the Amazon facilities within the next two weeks.
Last month, Amazon launched a “mini-fulfillment center” in Sauget, IL, enabling it to offer delivery in five hours or less. The Sauget site is the 34th that Amazon has opened across the country, combining three functions – fulfilling orders, sorting items into routes and having delivery drivers pick them up. At just 202,000 square feet, the facility is about one-quarter the size of the typical Amazon fulfillment center and covers a 40-mile radius. Up to three million items are available through the delivery service, including school supplies, pet food/supplies and household goods. Click here to request a list of Amazon Delivery Stations future openings.
On April 7, Amazon opened its newest Fresh grocery store in Fairfax, VA, with plans for three more Fresh stores in northern Virginia. The store is about 30,000 square feet. Click here to request a list of Amazon Fresh future openings illustrated in the map below.
Publix Super Markets remains one of the 10 largest grocery chains (and the leading employee-owned supermarket chain) in the U.S., with nearly 1,300 retail stores throughout the southeastern states of Florida, Georgia, Tennessee, Virginia, Alabama, North Carolina and South Carolina. More than 800 of the grocery stores are in Florida, Georgia is home to nearly 200, and the other five states each have less than 100. Our report takes a closer look at the Company’s operational and competitive status, including market position, real estate and sales trends, and provides visual competitive analyses as well as key real estate metrics like store count, average sales per square foot, and the new Real Estate Intelligence analytics solution.
WiseWay sold its last remaining Northwest Indiana supermarket to Strack & Van Til, which currently operates more than 20 grocery stores across the region. In 2012, WiseWay sold seven namesake and PayLow stores to Strack & Van Til, which absorbed and rebranded them. WiseWay has since shifted its focus to the Wise Guys Discount Liquors chain, maintaining this single remaining grocery store in Winfield, which recently underwent a major overhaul. Both WiseWay and Strack & Van Til are supplied by Associated Wholesale Grocers. Terms of the deal, which is expected to close in May, were not disclosed.
Kmart will close its Avenel, NJ store on April 16, leaving it with just three stores in the U.S and down from more than 2,000 at its peak. The three remaining stores are located in Westwood, NJ; Bridgehampton, NY; and Miami, FL.
Grupo Comercial Chedraui is in integration mode after closing on its acquisition of Smart & Final from Apollo Global Management in July 2021; Smart & Final now operates as a division of Bodega Latina, the Company’s U.S. subsidiary, along with the El Super and Fiesta Mart chains. In late December 2021, Bodega Latina announced a name change to Chedraui USA to more closely align it with Grupo Comercial Chedraui. Altogether, Bodega now has 377 locations across California, Nevada, Arizona, New Mexico and Texas. Our report takes a closer look at the Company’s operational and competitive status, including market position, real estate and sales trends, and provides visual competitive analyses as well as key real estate metrics like store count, average sales per square foot, and the new Real Estate Intelligence analytics solution.
Guess, which operates 1,068 apparel stores across the Americas, Europe, and Asia, completed the redesign of 100 stores “that were 10 years old and may not have been touched for years.” The Company chose durable and sustainable design materials to update floors, walls, ceilings, displays, counters, and fixtures. Guess began its revitalization project in September 2021, transforming the 100 stores in the U.S. and Canada within four months. The Company plans to continue the revitalization process, though it did not reveal the number of stores targeted for the next wave. As shown in our Store Trends map, the Company operates 317 stores across the U.S., with the highest concentration of stores in California, Florida, Texas and New York.
The Buckle’s March sales decreased 10.4% to $124.9 million, and comps fell 9.7%. For the nine-week YTD period, sales increased 3.5% to $212.7 million, and comps were up 4.1%. The Company currently operates 439 stores in 42 states, down from 442 stores a year ago. The Buckle plans to open five new stores and close one underperforming location in FY22, and complete 15 to 20 remodels; during FY21, the chain opened one new store and closed four underperforming locations.
Walmart Health is expanding its presence in Florida, with five additional sites in Jacksonville (April 5), Middleburg (April 7), Kissimmee (April 12), Sanford (April 14) and Welsey Chapel (June 7). This adds to its footprint of 20 locations in Arkansas, Georgia and Illinois. Situated adjacent to Walmart Supercenters, the Walmart Health centers provide primary care, lab, X-ray and EKG services, behavioral health and counseling, as well as dental, optical and hearing care.
Topgolf will open a new store in El Segundo, CA this Friday, featuring its signature three-level venue experience with 102 outdoor hitting bays, a restaurant and sports bar, as well as an adjacent 10-hole, lighted, par-3 golf course. This represents the fourth Topgolf in California, joining locations in Ontario, San Jose and Roseville (Sacramento), and represents the Company’s 76th location overall. According to our Retail Openings & Closings tracker (see map below), the Company has nearly two dozen stores slated to open in the next couple of years, including two more in Southern California.
Tropical Smoothie Cafe signed 56 new franchise agreements and opened 42 new franchised cafes, including its first airport location, during 1Q22. The brand’s expansion into the airport space began with a new location in the newly expanded Will Rogers World Airport in Oklahoma City, OK. More than 70% of the 56 new franchise agreements are with existing Tropical Smoothie Cafe franchisees.
The UFCW in Southern California has reached a tentative agreement with Albertsons’ namesake, Vons and Pavilions banners, and Kroger-owned Ralphs, that will avert a potential strike. The member-led bargaining committee representing seven UFCW local unions struck a deal that includes wage increases, guaranteed hours for part-time employees, a secured pension and better health benefits. Members of each local union will now review the agreement and take a vote. The unions said 95% of members who voted approved a work stoppage late last month.
Meanwhile, the UFCW in Southern California has ratified a new three-year contract with Stater Bros. The contract will go into effect immediately and be retroactive to the start of the contract term on March 7.
Big Y Foods plans to build a Big Y Express Fresh Market in its hometown of Springfield, MA. The 10,000 square-foot small-format location will be tailored to fit the needs of the city’s downtown area.
The Company recently completed renovating its Big Y at Fresh Acres, also in Springfield. Since it opened in 2006, Fresh Acres has served as Big Y’s testing site for innovative concepts that are then rolled out across the entire chain.
The Fresh Market opened a store in Palm Beach Gardens, FL, its second location featuring a culinary kitchen and coffee bar concept. This in-store experience is similar to the layout of a store in Greensboro, NC, that reopened last fall.
Dave & Buster’s Entertainment announced an agreement to acquire Main Event, a family entertainment concept with 50 locations, from Ardent Leisure Group Ltd. and RedBird Capital Partners in an $835 million all-cash transaction. The deal is expected to close later this year, at which time the current CEO of Main Event, Chris Morris, will be named CEO of the combined company. Dave & Buster’s has been led by Chair and Interim CEO Kevin Sheehan since September, when previous CEO Brian Jenkins retired.
Macy’s exceeded 4Q21 expectations, driven by stronger-than-expected holiday sales. 4Q21 comps grew 27.8%, and EBITDA was up 65%. More significantly, coming off the dismal performance in FY20, FY21 sales were essentially flat, despite 54 fewer stores, and EBITDA was 9% higher compared to FY19.
For FY22, the Company expects net sales growth to be flat to up 1%, to $24.46 billion – $24.70 billion, including comp growth of 1.1% – 1.4%.
At an investor conference last week, Macy’s CFO Adrian Mitchell spoke of the unpredictable, volatile consumer, whose confidence is falling. After the unprecedented spending on goods during the pandemic, Mitchell responded to questions of “where is the demand going to come from” in 2022? How much consumer discretionary spending will shift to travel and restaurants, and the challenges of rising inflation?
The Company said it is conservatively planning for around 1% sales gains in this uncertain environment, where it is seeing more pressure on low to middle-income consumers, while higher-income consumers remain resilient. Management reported supply chain pressures are easing, allowing for shorter lead times, but the situation is not 100% yet. Still, with inflation rising, 2022 is shaping up to be a more promotional year, as retailers fight for market share.
As we have been reporting, the Company slowed the pace of or deferred its planned store closures, as management sees its physical stores supporting online sales and omnichannel offering (sales per capita 3x higher in markets where there are physical stores).
As the largest and one of the strongest players in the beauty segment, Ulta Beauty turned in a solid year, with improvements to both the top and bottom line. FY21 comps increased 37.9% from FY20, with growth driven by a 30% increase in transactions and a 6% increase in average ticket. Compared to pre-pandemic FY19, comps increased 12.6%. By category, year-over-year growth was strongest in fragrance and bath, which grew 64% and represented 14% of FY21 sales. Sales growth, along with the leveraging of fixed costs, improved merchandise margins and favorable channel mix shifts, drove gross margin up 730 bps in FY21. This, combined with an 80 bps improvement in SG&A margin drove FY21 EBITDA up nearly 150% to $1.61 billion, with EBITDA margin expanding 820 bps to 18.7%. In 4Q21, the Company delivered record sales of $2.73 billion (up 24.1%), as comps increased 21.4% from 4Q20 and 15.4% from 4Q19; ecommerce sales grew 3% (on top of 70% growth the prior year) and represented 25% of 4Q21 sales. During the year, the Company opened 48 new stores, remodeled nine, relocated seven, and closed four. The Company also launched Ulta Beauty at Target in over 100 stores and online. Looking ahead, the Company plans to open 50 net new stores and expects FY22 sales to be up 5% to 6%.
PriceSmart’s revenue increased 10.8% to $1.04 billion, driven by comp growth of 10.3%. Net merchandise sales rose 12.6% to $1.01 billion, with foreign currency exchange rate fluctuations having a $26.3 million negative impact. The Company opened two new warehouse clubs over the past year, bringing its total store count to 49.