August 18, 2021
Amazon announced an increased investment in Florida by adding a new robotics fulfillment center and five new delivery stations, expected to open in 2022. The new 630, 000 square-foot fulfillment center, anticipated to launch in Tallahassee, FL in late 2022, will be used to ship small items. The five new delivery stations will power the last mile of Amazon’s order process and help increase efficiency of deliveries for customers. The news comes a week after the Company announced a new fulfillment center in Port St. Lucie, FL. Amazon currently operates more than 50 sites in Florida that support customer fulfillment and delivery operations, including more than 10 facilities that launched in 2020.
In other news, Amazon Air announced it has begun operations at its new, primary package hub at Cincinnati/Northern Kentucky International Airport a few weeks ahead of schedule. The U.S. hub will enable the online retailer to further speed up line haul transportation and help meet one-day delivery commitments for Prime members. An 800,000 square-foot sortation facility will be able to process millions of e-commerce packages every week. There are six other buildings, a large new ramp for aircraft parking, and a multistory vehicle garage on the 600-acre campus. Amazon said the $1.50 billion facility took four years of planning and construction. Click here to request a list of future openings.
Speedway LLC has tapped NRC Realty & Capital Advisors LLC to sell 166 former service stations, retail development sites, and undeveloped land sites owned by the convenience store chain and its affiliates. Some of the properties have small buildings on them. All of the sites are being sold individually through a sealed bid auction. The properties are located coast to coast across the U.S. The divestures come three months after 7-Eleventook ownership of the roughly 3,800-unit Speedway chain from Marathon Petroleum Corp. The $21 billion transaction closed on May 14. Click here to request a list of future openings.
Whataburger plans to expand in Kansas and Missouri through KMO Burger, a new investor-led franchise that includes Super Bowl MVP Patrick Mahomes. KMO Burger will open 30 Whataburgers in the next seven years, from Wichita, KS to St. Jospeh, MO, concentrating in Kansas City. The first restaurants in this new group are expected to open next year.
In early 2021, Whataburger announced plans to open four Kansas City area restaurants in Missouri and Kansas. Construction is underway on the first four units in Overland Park, Lee’s Summit, Independence and Blue Springs, slated to open in fall 2021. Click here to request a list of future store openings.
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Hudson’s Bay Company (HBC) announced its Hudson’s Bay division will split its physical store network and e-commerce operations into two separate businesses. The online business will operate as “The Bay,” while the 86-store fleet will operate as “Hudson’s Bay.” The Bay is responsible for brand direction, marketing, buying, planning, and technology for both businesses. Hudson’s Bay will be led by Wayne Drummond, who was appointed president. The e-commerce business will be led by Iain Nairn, who was appointed president and CEO. In March 2021, HBC spun off the digital business of Saks as a separate entity and in June announced that the digital business of Saks OFF 5th will also be spun off as a separate business.
Meanwhile, Saks Fifth Avenue is partnering with WeWork on an initiative called SaksWorks, which involves converting parts of current and former Saks department stores into co-working spaces. The first SaksWorks offices are slated to open in September in Manhattan, Manhasset, Scarsdale, and Westchester, NY, and Greenwich, CT. The co-working spaces will also open in former Lord & Taylor real estate. Click here to request a list of future openings and closings.
Dick’s Sporting Goods will open its first Golf Galaxy Performance Center in a redesigned Golf Galaxy store at Shoppers World in Framingham, MA on August 28. Described as an experiential format, the store will include hitting bays, custom fittings, golf lessons from certified PGA professionals, equipment, apparel and footwear. The Company has plans to remodel 18 Golf Galaxy locations and is expanding the technology offerings in 64 additional locations this year. Dick’s also opened two new locations under its Going, Going, Gone! clearance banner in Orland Park, Il and Olathe, KS. The stores offer up to 70% off on athletic footwear and apparel brands. Dick’s has recently launched and is testing a number of new formats. In addition to the clearance formats, it has the new Public Lands concept, focused on upscale outdoor merchandise, and large-format Dick’s House of Sports. Meanwhile, Dick’s has also added two new namesake locations in Chicago Ridge, IL and Grand Junction, CO. As of July 31, the Company operated 731 Dick’s locations and 98 Golf Galaxy stores. The Company plans to open 14 stores in FY21. Click here to request a list of future store openings and closings.
Walmart Canada will break ground on its first distribution center in Atlantic Canada later this week. The $56 million facility in Moncton will ship fresh and frozen groceries to the Company’s 43 stores in the region. It is slated to open in fall 2022. Click here to request a list of future openings and closings.
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Walgreens Boots Alliance is expanding its VillageMD clinics in Florida, with three new Village Medical at Walgreens locations in the Orlando area and seven more in the works to open before the end of the year.
Grocery Outlet’s 2Q sales declined 3.5% to $775.5 million. Same-store sales fell 10% but on a two-year stack basis increased 6.7%. The NOSH (Natural, Organic, Specialty, Healthy) category was a top performer during the quarter and remains a driver in the Company’s fresh food expansion. However, Grocery Outlet has faced multiple challenges, including shoppers cutting down on store visits and doing more shopping online, and stimulus checks shifting customers away from Grocery Outlet’s value-focused alternative format and towards more conventional supermarkets.
Grocery Outlet opened 11 new stores during the quarter, bringing its total to 400 units in California, Washington, Oregon, Pennsylvania, Idaho and Nevada, compared with 362 a year earlier. Subsequent to quarter-end, the Company opened a 16,130 square-foot Bargain Market store in Victorville, CA.
After holding off on online shopping, the Company has begun exploring options for e-commerce partners. According to CEO Eric Lindberg, discussions with potential third-party online grocery providers are underway, and Grocery Outlet expects to be piloting one or more solutions within months. Click here to request a list of future store openings.
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PGA Tour Superstore opened its first Virginia location in Fairfax on August 14, bringing its store base to 48. In April, the Company announced plans to open five stores this year, with the other locations slated for White Plains, NY, and Arlington, Houston, and San Antonio, TX. The White Plains store opened in a former Modell’s Sporting Goods site in April, its second location in the state. The Arlington, TX store opened in July and brought the Company’s Texas store base to seven. The other two Texas locations are due to open later this year and will bring PGA’s total store count to 50. Click here to request a list of future store openings.
Dillard’s reported a strong second quarter, with revenue increasing 71% from 2Q20 and comps up 14% from 2Q19. The greater sales and significant gross margin expansion lifted quarterly EBITDA more than 700% to $251.1 million. The Company ended the quarter with $1.45 billion availability, including $670 million of cash. Dillard’s closed its Paradise Valley Mall location in Phoenix, AZ during the quarter. In 3Q21, the Company plans to close its clearance center at Valle Vista Mall in Harlingen, TX and open a new store at Mesa Mall in Grand Junction, CO.
The Wendy’s Company and REEF, operator of mobility, logistics hubs, and kitchens, announced a new development commitment to open and operate 700 delivery kitchens over the next five years across the U.S., Canada, and the U.K. Through this initiative, REEF will become the first Wendy’s franchisee in the U.K. Wendy’s and REEF expect to open approximately 50 delivery kitchens in 2021, with the remainder launched by 2025. Click here to request a list of future openings.
Topgolf, a subsidiary of Callaway, outperformed expectations, recording revenue of $325 million in 2Q21 (36% of Callaway’s total sales). During the period, same-venue sales percentage was in the low 90s compared to pre-pandemic 2Q19, up from the low 80s in 1Q21. The improvement was driven by stronger walk-in sales and a recovery in its events business. Momentum is expected to continue into 3Q21 but to slow by 4Q21 due to a lower mix of corporate events. Assuming no major COVID restrictions, the Company expects full-year sales to be approximately 90% of pre-pandemic levels. During 2Q, Topgolf opened four new venues. Subsequent to quarter end, the Company opened a new venue in Holtsville, Long Island on July 30 (its first in New York), and in Colorado Springs, CO on August 13 (its third in Colorado). Overall, management plans to open nine venues in FY21 and end the period with 70 owned locations. Callaway expects consolidated FY21 revenue of $3.03 billion – $3.06 billion, with adjusted EBITDA of $345 million – $360 million. Click here to request a list of future store openings.
Home Depot’s 2Q21 sales increased 8.1% to $41.12 billion, its first quarterly sales of over $40 billion in its history. Comps were up 4.5%, with U.S. comps up 3.4%. Customer transactions were down 5.8%, but average ticket rose 11.3% to $82.48. Operating income increased 9.4% to $6.64 billion. The Company ended the quarter with 2,298 locations in North America. Click here to request a list of future store openings.
Cineworld’s 1H21 sales for the period ended June 30 remained pressured, down 59% over 1H20, as theaters were closed throughout half the period. The Company began reopening its Regal locations in the U.S. in April 2021, and by June 30 had reopened 98% or 508 domestic locations. U.S. admissions fell 69% to 8.8 million, compared to 28.4 million in the prior-year period. Partially offsetting this was a 16% increase in average U.S. ticket price. We note that the U.S. box office declined 42% in 1H21; Cineworld’s relatively worse performance was due to management’s decision to not reopen in early 2021 as many of its peers did. Overall, the Company reported an adjusted EBITDA loss (under IFRS 16, which excludes $82.3 million in lease payments) of $21 million, compared to EBITDA of $53 million in 1H20. Cash burn during the period totaled $271 million, averaging $45 million per month (down from $60 million per month while theaters were closed). During the period, Cineworld secured $213 million in convertible bonds and received a $203 million tax refund under the U.S. Cares Act. As of June 30, the Company had cash of $436.5 million (excluding restricted cash of $16 million). Subsequently, in July 2021, Cineworld secured a $200 million Term Loan due May 2024. While the Company obtained a waiver for certain credit covenants through the near-term, it will be required to maintain a net debt to EBITDA ratio of under 5x for the June 30, 2022 covenant test-date, which remains uncertain; if Cineworld is not able to generate sufficient cash flow over the next 12 months and deleverage its balance sheet, or obtain another waiver, this could result in an event of default. Click here to request a list of future openings.
Dine Brands Global announced expansion plans for new non-traditional restaurants across Ontario, Canada. Through an agreement with Kailash Kasal, president of Toronto-based investment company K2 Group, a minimum of five IHOP restaurants will open in Ontario over the next five years. The first restaurant is scheduled to open in a truck stop in Belleville at the beginning of 2022. Restaurants in Hamilton, Waterloo and London will follow. Click here to request a list of future store openings and closing.