December 22, 2021
Hy-Vee recently outlined plans to expand into four new states and build its third distribution center in Nashville, TN, to support the opening of more of than 20 new stores over the next four years. The Tennessee DC will initially service seven new stores in Indiana, Tennessee, Alabama and Kentucky in 2023; the facility is also slated to supply Hy-Vee's stores in southern Missouri. While this move would be Hy-Vee’s first venture outside the Midwest and its first expansion into a new state since 2009, when it entered Wisconsin, the Company will find itself competing with Walmart, K-VA-T, Kroger and Publix in the region, among others. Click here to request more information.
Rite Aid’s 3Q22 revenue increased 1.8% to $6.23 billion, driven by growth in the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment. Retail Pharmacy Segment sales increased 7.9% to $4.43 billion, driven by a 2.6% increase in same-store sales and the Bartell Drugs acquisition in December 2020. Pharmacy comps grew 4.4%, consisting of a 5.9% increase in pharmacy sales and a 0.4% increase in front-end sales.
Rite Aid announced that it is conducting a rigorous assessment of its store base and has implemented a store closure program. Based on an ongoing review, the Company identified 63 stores for closure, which management expects to provide an annual EBITDA benefit of approximately $25 million. The closures began last month. The review will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months.
Raley’s completed its acquisition of Bashas’ last week. Bashas’ will join newly formed enterprise The Raley’s Companies. Management indicated that all Bashas’ banners will be maintained. The deal combines Bashas’ with a larger portfolio of retail and technology holdings controlled and managed by The Raley’s Companies. The Company now has more than 235 locations.
Casey’s General Stores announced the closing of its acquisition of 40 stores in Tennessee and Kentucky from Pilot Corp. for $220 million; the Company financed the deal with a combination of cash on hand and incremental financing. The acquisition gives Casey’s immediate scale in the Knoxville, TN market and is part of the implementation of a three-year strategic plan outlined in January 2020, when the Company set a goal of adding 345 stores to its chain. Click here to request a sample list of future openings.
A 40,000 square-foot Amazon Go store recently opened in La Habra, CA. It is the Company’s 10th brick-and-mortar location in the state and its second with the fully autonomous checkout service. Click here to request a sample list of future openings.
Retail Business Services (RBS), which provides omnichannel services to Ahold Delhaize’s grocery brands, has introduced frictionless store technology at a new Giant e-commerce fulfillment center in Philadelphia, PA.
Meanwhile, Ahold Delhaize’s Giant opened its fourth Giant Heirloom Market in Philadelphia, PA. Giant restored the 32,000 square-foot space and features a large beer and wine selection, gourmet cheeses, a seating area, and 16 self-checkout registers. Giant now has eight stores in Philadelphia and opened four this year alone. The Company also opened an e-commerce fulfillment center in Southwest Philadelphia and has plans for an additional store in the city.
Nordstrom is reportedly consulting with AlixPartners to review strategic options for its off-price Nordstrom Rack business, including spinning it off as a separate business. Both companies declined comment, and no timetable for a separation was mentioned. Nordstrom Rack, which represents about 34% of the Company’s sales, has been underperforming recently, with 3Q21 revenue down 8% compared to 3Q19. Management attributed Rack’s disappointing sales to several factors, including low inventory levels in premium brands in key categories like women's apparel and shoes, and a merchandise mix that has skewed too far to lower prices. Nordstrom Rack had been the Company’s growth vehicle, but expansion of the banner has slowed to a crawl due to the ongoing pandemic. The potential separation of Rack comes at a time when others in the department store sector are reviewing options to increase shareholder value. Hudson’s Bay separated its Saks’ and OFF 5TH e-commerce businesses earlier this year, and Macy’s and Kohl’s are under pressure from activist investors to do the same. Last week, Neiman Marcus shot down rumors it was considering splitting its store base, its online business, and the Bergdorf Goodman banner into three separate businesses. Click here to request a sample list of future openings.
Kroger has expanded its fulfillment network in the Indianapolis, IN area, with a 48,000 square-foot delivery ‘spoke’ facility that will complement and collaborate with its larger ‘hub’ location in Monroe, OH. The Monroe fulfillment center was built in partnership with Ocado.
Last week, Kroger announced the soft launch of a new 375,000 square-foot automated customer fulfillment center (CFC) in the Atlanta area. It is the fourth and largest of the Company’s CFCs thus far.
Saker ShopRites has extended its reach in Ocean County, NJ with the acquisition of seven ShopRite stores from Perlmart, Inc. Saker now owns 39 ShopRites across New Jersey. The Perlmart stores, formerly owned and operated by Michael Perlmutter, are in Toms River, Lacey, Berkeley, Manchester, Jackson, Waretown and Stafford, NJ.
Fleet Feet completed its acquisition of Running Specialty Group (RSG) subsidiary JackRabbit and its 56 stores last week for an undisclosed amount. Fleet Feet is the largest franchisor of locally owned and operated running stores, now with 248 locations in 40 states. JackRabbit was originally formed in 2011 by The Finish Line and acquired by affiliates of CriticalPoint Capital in 2017.
Our Hot Market Report takes a closer look at the Miami, FL real estate landscape, and provides visual competitive analyses as well as key real estate metrics such as future openings, store count, market share, digital insights, and demographics. Click here to request a copy of the full report.
Alimentation Couche-Tard has acquired Slidell Oil Co.’s 17-unit convenience store chain operating under the Purple Cow banner. The Slidell Oil deal also includes 23 wholesale fuels accounts across Alabama, Mississippi, and Louisiana. According to Couche-Tard, the Slidell assets are large, modern, high-volume facilities that will complement its existing Circle K portfolio in the Southeast region as well as its wholesale fuel business.
The Company also closed on its acquisition of 19 convenience stores and two non-operating properties in New Mexico from Pic Quik last week.
ABC Supply has expanded into East Texas, with its newest location in Lufkin, its 44th in the state. Last month, the Company opened a branch further south in Baytown, TX, in the Houston metro area. The Company’s L&W Supply subsidiary, a commercial building materials distributor, has recently opened branches in Cleveland, OH and New Castle, DE.
Yesterday, ABC Supply announced it has acquired the assets of Siding Sales, including three locations in Bowling Green, Glasgow, and London, KY. The Company now operates 11 locations in Kentucky. The deal strengthens ABC’s relationships with contractors across central and southern Kentucky. These latest moves cap off a year that saw the Company also open new branches in Salt Lake City and St. George, UT; Port St. Lucie, FL; Lihue, HI; Centreville, MD; and Redmond, OR; and acquire Kentucky-based Exterior Supply in June and Oklahoma-based Gutter Source in July. ABC Supply operates more than 800 locations across the U.S.
Demoulas is expected to open a Market Basket in Hanover Crossing, MA early next year. The store’s construction was delayed earlier in the pandemic due to a shortage of building supplies.
Transformco, which acquired Sears and Kmart at a bankruptcy auction in 2019, is considering a sale or a redevelopment of its Sears corporate headquarters in Hoffman Estates, IL, as its retail portfolio continues to shrink. The Company will begin to market the 273-acre property, which includes a 2.3 million square-foot office, to potential buyers in early 2022. It is also reviewing other redevelopments used for the site. Click here to request a sample list of future closings.
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PGA Tour Superstore signed a lease for a 35,640 square-foot location in south Charlotte, NC, roughly a month after signing a lease for 37,680 square feet in Kensington, MD. Both stores are slated to open in Spring 2022. The Kensington unit will be the second in the Washington, D.C. metro area; a 36,144 square-foot location opened in Fairfax, VA in August. In public comments last month, President and CEO Dick Sullivan called the Rockville-Bethesda area, where Kensington is situated, “a great market north of the Potomac River” and acknowledged customer demand for the brand there. Other planned openings for 1Q22 are Plymouth Meeting, PA (Philadelphia metro) and Tampa, FL. In April, the Company announced it would add at least five new locations in 2021, and between July and December, it opened stores in Arlington, Houston and San Antonio, TX; White Plains, NY; and the Fairfax, VA location. With the opening of the San Antonio store earlier this month, the Company reached a previously expressed milestone of 50 locations by the end of 2021. PGA Tour Superstore is operated by Golf & Tennis Pro Shop Inc., a subsidiary of Atlanta’s AMB Sports & Entertainment. Click here to request a sample list of future openings.
Last week, LL Flooring opened two new locations, one each in Visalia, CA and Yakima, WA. Including these units, the Company has opened 15 new stores in 2021, for a total of more than 420 locations nationwide.
Secondhand clothing and accessories retailer Rebag has raised $33 million in Series E funding, led by private equity firm Novator; the Company has raised a total of $101 million including the new round. Rebag said it will use the funding to grow its tech-enabled physical stores and improve its tech-based tools, including its Clair Technology Suite for pricing and trading in luxury items, and Clair AI, a tool launched in February 2021 that uses image recognition to price luxury purses. Charles Gorra, founder and CEO of Rebag, said in a statement, “Since the Company’s inception, our vision has been to fuel the circular economy and create further transparency in the resale market. This latest round of funding will allow us to further develop our technology and launch features that democratize access to information and create an ecosystem that benefits consumers and retailers alike.”
Launched in 2014 as a digital brand, Rebag now operates eight brick-and-mortar stores in New York City (4), California (2), Connecticut (1) and Florida (1); the Company plans to open an undisclosed number of additional stores in 2022. Its stores serve as drop-off locations, are staffed with stylists, and offer access to more than 30,000 items. The Company’s newer categories, like fine jewelry and watches, have quadrupled in growth from the prior year. In 2019, Rebag launched Clair, or the Comprehensive Luxury Appraisal Index for Resale, which assesses the value of a handbag from one of 50 brands. In August 2020, the Company opened its first Connecticut location, a 1,200 square-foot unit in Greenwich; in December 2020, it opened Rebag Bar, a 180 square-foot “micro-store” in New York City inside The Shops at Columbus Circle; and in November 2021, Rebag opened a new location in Beverly Hills, CA.
In its earnings call last month, management at competitor The RealReal indicated the Company is testing a mini-store concept of 2,000 - 3,000 square feet with “about 400 to 500 SKUs max in the front and then luxury consignment offices in the back.” Secondhand luxury reseller The RealReal operates 18 retail locations, overlapping with Rebag in the New York City, Miami, Los Angeles, and Greenwich, CT markets.
Custom apparel retailer INDOCHINO announced plans to expand into women’s apparel, surpass 100 locations, and “significantly increase” its share of the men’s wedding apparel market in 2022. The Company plans to add stores in new markets like New Mexico, Kentucky and Alabama, while continuing to increase its presence in prominent existing markets like New York and California. The new stores will be both standalone showrooms as well as shops within Nordstrom department stores under a partnership deal. INDOCHINO currently has 79 locations across North America, which offer a personalized service to professionally measure customers and design custom suits, shirts, casual wear and outerwear for men.
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Walgreens Boots Alliance and VillageMD are expanding into San Antonio, TX with the opening of nine Village Medical at Walgreens primary care practices set to open over the next year. This will represent the Company’s fifth major market in Texas, following Houston, El Paso, Austin and Dallas. Walgreens recently announced an increased investment in VillageMD to advance its position in primary care, which will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025 and 1,000 by 2027, more than half of which will be in medically underserved communities. Click here to request a sample list of future openings.
Starbucks said in a letter to its U.S. employees that it will negotiate in “good faith” with workers at a store in Buffalo, NY that voted to unionize. The letter comes days after the employees’ votes to form the Company’s first U.S. union were certified. The employees will join Workers United, affiliated with the Service Employees International Union (SEIU). The push to unionize at Starbucks is spreading and now reportedly includes two Starbucks in Boston that have filed for union election, additional locations in Buffalo, and stores in Mesa, AZ. Click here to request a sample list of future U.S. openings.
On Sunday, Toys “R” Us opened its two-level, 20,000 square-foot global flagship at American Dream, the entertainment and retail center in East Rutherford, NJ. The new store has 10,000 items merchandised by brand or play pattern. It combines the brand’s signature elements like its Geoffrey the Giraffe mascot with new elements like Geoffrey’s Café and ice cream parlor as well as a two-story slide (both of which will open in 2022), and has stations for interactive experiences and product demonstrations. The store is Toys “R” Us’ only confirmed U.S. location to date; the brand plans to add in-store shops at approximately 400 Macy’s stores next year. In March 2021, WHP Global acquired Tru Kids Inc., parent to the Toys “R” Us, Babies “R” Us, Geoffrey the Giraffe brands, and more than 20 related consumer toy and baby brands.
Darden announced its results for 2Q22 ended November 28. Consolidated sales rose 37% to $2.27 billion, driven by 34.4% combined comp growth and the opening of 34 net new restaurants over the past year. The Company’s fine dining brands reported strong 61.6% comp growth, outpacing the 29.3% and 31.2% increases at Olive Garden and LongHorn Steakhouse, respectively, though the difference was partly due to easier comparisons.
FAT Brands completed its for $20 million acquisition of Native Grill & Wings from Wingtime, LLC, a subsidiary of Cybeck Capital Partners, LLC. The acquisition is expected to further increase FAT Brands’ growing market share in the chicken wing category. With the acquisition of Native Grill & Wings, FAT Brands will have more than 2,300 franchised and corporate-owned stores globally, with annual system-wide combined sales of approximately $2.20 billion. The Native Grill & Wings transaction follows three other acquisitions this year: Fazoli’s (completed last week), Twin Peaks (completed in October), and Global Franchise Group (completed in July).
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Chipotle Mexican Grill is opening a new prototype of its Chipotlane Digital Kitchen concept in Cuyahoga Falls, OH this month. The Company opened its first digital kitchen in Highland Falls, NY in November 2020, but the new prototype differs from that location in that it will not have any dining room access and will only serve customers through its drive-thru or pick-up window. As a result, the new store will only take digital orders placed through the Chipotle app or website, meaning no drive-up orders are possible. Of Chipotle’s nearly 2,900 units, only about 300 currently have Chipotlane drive-thrus. New restaurants with Chipotlanes are generating approximately 15% higher sales compared to non-Chipotlane stores. Given the strong performance, the Company plans to focus on emphasize the feature in its new store expansion and renovate a number of existing stores to include a drive-thru. Click here to request a sample list of future U.S. openings.
Walmart is building a one million square-foot fulfillment center in Salt Lake City, UT for online orders, expected to open next summer. Last week, the Company unveiled plans to build a 925,000 square-foot automated fulfillment center in Lebanon, TN, slated to begin service in the fall of 2022. The Salt Lake City facility will not be automated. Walmart operates three distribution centers and 59 stores in Utah. Click here to request a list of future openings.
Meijer plans to open a small-format store in Cleveland, OH. The 40,000 square-foot Fairfax Market will be its first small-format location outside of Michigan. Click here for a list of future openings.
Neiman Marcus postponed plans to close its Natick, MA store to September 2022, after an affiliate of developer Bulfinch Companies and investment firm Harrison Street acquired the 94,000 square-foot unit at the Natick Mall. Bullfinch and Harrison have not yet revealed their plans for the property. As noted above, last week Neiman Marcus quashed rumors it would consider spinning off its e-commerce operations and Bergdorf Goodman banner.
Kohl’s is closing its Ridgefield, CT store next month. The store has been open since 2000; it was reported in July 2020 that the Company would downsize its footprint in the shopping center. A HomeGoods store will occupy 24,173 square feet of Kohl’s current footprint, leaving 65,400 of available space. Click here to request a sample list of future openings and closings.
Yesterday, Authentic Brands Group (ABG) announced a non-exclusive agreement with JD Group to distribute Reebok apparel and footwear across more than 2,850 stores owned by JD, including JD, Finish Line, DTLR, Shoe Palace, Size?, Sprinter and SportZone as well as associated e-commerce platforms, in North America and Europe. The deal is slated to close in 1Q22, with products expected to roll out to JD’s stores in Fall 2022. Last month, SPARC Group, a joint venture between Simon Property Group and ABG, was named the official licensee and operating partner for Reebok in the U.S., including sourcing, manufacturing, and overseeing retail and e-commerce operations. Earlier this month, ABG signed a long-term licensing deal with Aditya Birla Fashion and Retail Limited (ABFRL), granting ABFRL exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok-branded retail stores in India and other ASEAN countries. ASEAN includes ten Southeast Asian countries — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Germany’s Adidas purchased Reebok in 2006, when Reebok was a sportswear leader in India. After years of waning popularity, Adidas announced the sale of the brand to ABG; the transaction is expected to close in 1Q22.
Authentic Brands Group is behind a number of recent high-profile brand and retailer acquisitions, including Forever 21, Barneys New York and JCPenney. ABG Founder, Chairman and CEO Jamie Salter previously said that Reebok will see global retail sales of more than $5 billion in 2022, and the goal for the next five years is $10 billion in global annual retail sales, to grow the digital business, and “lean into the footwear and apparel designs that have made Reebok unique.”
Finally, ABG’s Forever 21 announced an exclusive deal with Virtual Brand Group, a metaverse creation company, to build a fashion retail experience on Roblox, a metaverse platform with 49.4 million daily active users. Users can own and manage custom virtual fashion stores, including buying and selling Forever 21 merchandise, inside the Roblox platform.
Online secondhand marketplace Mercari announced its first-ever pop-up shop, opening on December 29 in a San Francisco shopping center and remaining open through February 12, 2022. The shop will feature “experiential zones,” where customers can buy and sell products, with onsite experts assessing the value of items (to a $30 maximum). Categories accepted include clothing, toys and games, kitchenware, sports gear, and home decor items.
Pep Boys has eliminated the retail side of its sales-and-service operation at 123 Florida stores, to focus on expanding its services and tire sales. More than half of those stores transitioned as of December 15. A spokesperson indicated the business model shift came as vehicles have become too complex for owners to repair on their own, adding, “We’re seeing a huge shift in demand for ‘do it for me’ service versus ‘do it yourself.’” Click here for a list of future openings and closings.
At least six CVS Health locations in San Francisco are set to close in January 2022. The Company announced its plan to shutter 900 stores nationwide in November, in a move to refocus its in-person retail experience and consolidate existing stores. Click here for a sample list of future openings and closings.
Pizza Inn, a portfolio company of RAVE Restaurant Group, has executed a multi-unit development agreement with the Company’s franchise business consultant, Dion Firooznia. Operating under the name D2 Restaurant Group, Firooznia will open six Pizza Inn buffet restaurants in Tennessee and North Carolina. The first opening is anticipated in Elizabethton, TN by the end of this month, with a second North Carolina store planned for Spring 2022.
Qdoba is planning to open its first Puerto Rico location in April 2022 in Guaynabo. It will be the first of 12 Qdoba restaurants planned for Puerto Rico over the next five years. The 3,500 square-foot restaurant will feature a drive-thru, streamlined kitchen layout designed for custom orders, and dedicated curbside pick-up areas. Click here for a list of future openings.
RBI’s Popeyes chain has entered into an exclusive master franchise and development agreement with French restaurant group Napaqaro to open hundreds restaurants in France and Monaco across multiple formats over the coming years. The first Popeyes in France is set to open in 2022.