July 20, 2022
In addition to a forward-looking analysis of specific retailers at risk by our team of industry experts, the report also includes a breakout of high yield retail bonds, upcoming debt maturities and future store closings.Click here to request a copy of this report.
Macy’s announced it will expand its partnership with WHP Global to bring the Toys“R”Us brand to every Macy’s store this holiday season. Beginning in late July and rolling out through October 15, the in-store shops will range from 1,000 square feet and span up to 10,000 square feet in flagship locations in Atlanta, Chicago, Honolulu, Houston, Los Angeles, Miami, New York and San Francisco. The footprint of stores may flex up an additional 500 to 3,000 square feet during the holiday season to offer an even wider assortment of products. Since last August, Macy’s has offered an assortment of Toys“R”Us products online at macys.com/toysrus and ToysRUs.com. Macy’s reported for 1Q22, toy sales were 15x higher than the comparable period prior to the Toys“R”Us partnership.
Kroger announced the addition of two new spoke facilities in Nashville, TN and Maywood, IL, allowing it to service customers in the Nashville and Chicago metro areas. The roughly 40,000 square-foot Nashville facility will work in conjunction with the Atlanta customer fulfillment center (CFC), increasing its reach to customers up to 200 miles from the hub. The nearly 80,000 square-foot Maywood facility is about 20 miles west of Chicago, and will work with Kroger’s CFC in Pleasant Prairie, WI. Kroger currently operates CFCs in Monroe, OH; Groveland, FL; Forest Park, GA (Atlanta); Pleasant Prairie, WI; and Dallas, TX. Future CFCs are planned for Frederick, MD; Phoenix, AZ; Romulus, MI (Detroit); Cleveland, OH; Charlotte, NC; Aurora, CO (Denver); as well as California, South Florida and the Northeast.
In other news, Kroger opened its third in-store “restaurant hub” through its partnership with Kitchen United MIX at a store in Dallas, TX. The “virtual food court” allows customers to place orders online, and then pick up their meals on-site or have them delivered.
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. Click hereto request a copy of the full report.
In a recent interview, Rouses Market CEO Donny Rouse said the Company made it through the pandemic with an increase in sales and a shift to e-commerce. Rouse said its success was driven by the team, suppliers and vendor programs it had in place, as well as its ability to quickly adapt. Nevertheless, he said the Company has not fully recovered due to supply chain disruptions and inflation, as well as labor shortages. In order to overcome challenges, the Company is promoting its private-label brands. While its e-commerce program “grew significantly” during the pandemic, it has declined a bit, as the in-store customer count goes up, and there is more foot traffic in the stores. Rouse’s currently has 64 locations in Louisiana, Mississippi and Alabama. It will break ground on three new stores this year, and five stores will be remodeled.
Costco recently raised the price of some of its products and increased the cost of some food court offerings, leading to concerns that membership fees might go up too. However, despite inflation, CEO Craig Jelinek recently said that raising membership costs is not on the table right now. In the past, Costco has historically raised its membership fees every five to six years with its last increase in June 2017 when fees went from $55 to $60 for a regular membership and $110 to $120 for the Gold Star Executive membership. Click hereto request a sample list of future openings.
Amazon announced the launch of its revamped Dash Cart in select Whole Foods stores, beginning with its Westford, MA location. Updates include lighter overall weight, larger capacity, extended battery life, weather resistance, changes to the touchscreen software, a shelf for delicate items, a lower shelf for larger items, and the ability to wheel the cart out to the parking lot. Once the customer is finished shopping, they exit through the Amazon Dash Cart lane, and the credit card associated with their Amazon account is charged. The Dash Cart’s screen shows a real-time receipt, which is emailed to them after they leave. In the months ahead, the Company will add the new carts to additional Whole Foods and Amazon Fresh stores across the U.S.
In other news, last week Amazon held its Prime Day two-day event. While the Company did not release a total sales amount, it said Prime members saved over $1.70 billion and that sales growth by its third-party selling partners outpaced growth of its own retail business, with shoppers spending over $3 billion on more than 100 million small business items. Adobe Digital Economy Index data indicates total U.S. online spend across retailers reached $11.90 billion (including $6 billion on day one and $5.90 billion on day two), representing 8.5% growth compared to $11 billion in Prime Day revenue in 2021. The best-selling categories were consumer electronics, household essentials, and home goods.
On June 3, 2022, we announced Antero Brands was closing 22 Olympia Sports stores, leaving it with approximately 40 locations. Recent reports indicate the Company continues to close locations, including stores in Massena, Potsdam and Ogdensburg, NY, and Bennington, VT. The Company’s website currently lists 30 store locations, including these four slated for closure. As we have been reporting, payment trends for the Company have remained significantly slow for most of the past year, despite receiving proceeds from the sale of JackRabbit to Fleet Feet (November 2021) and the shoes.com trade name to Designer Brands (April 2022).
Last Wednesday, according to published reports, The Fresh Market (TFM) submitted a request to the SEC to withdraw its filing for an IPO. The Company did not provide a reason, but the reports noted the current market climate is challenging due to recession fears and the Russia-Ukraine war. Apollo Global Management took TFM private in 2016. The Company filed a confidential draft registration statement for an IPO in March 2021 and has updated the filing every few months. In May, South American retailer Cencosud acquired a 67% stake in TFM for $676 million and has the option of eventually purchasing 100%. Click here for more info.
Fareway Stores opened a new unit under its Fareway Meat Market banner in Olathe, KS, marking the Company’s entry into its seventh state. The approximately 7,400 square-foot store has fresh-cut produce, dairy, and locally sourced items; a full-service butcher counter and an adjoining Wine & Spirits store; online ordering with curbside pickup; and to-go barbecue meal options through McGonigle’s Kitchen and Catering. Last month, Fareway opened a 7,760 square-foot Meat Market in Des Moines, IA and revealed plans to construct a roughly 21,000 square-foot grocery store in Brandon, SD. The Company currently operates more than 20 stores in Iowa, Illinois, Minnesota, Missouri, Nebraska, South Dakota, and Kansas. Click hereto request a sample list of future openings.
Starbucks Corporation is exploring a potential sale of its operations in the U.K. The chain has asked Houlihan Lokey to gauge interest for the business, which includes more than 1,000 coffee shops (70% franchised, 30% Company-run). Starbucks has faced increased competition in the U.K. from thousands of new independent operators, as well as Costa Coffee, Pret A Manger, and Tim Hortons. Rising costs in the country and a slow return of workers to offices in metro centers has also hurt the business. Last year, Starbucks sold its South Korean operations to its local partner and the Singaporean sovereign wealth group GIC. Click hereto request a sample list of U.S. future store openings and closings.
Lululemon is on track to make China its second-largest market by 2026, growing from its current 87 units to 220 over the next few years. CEO Calvin McDonald stated, “Our new goal is to quadruple our international business again by 2026. The Chinese mainland will be a big part of that opportunity as we continue to invest in the market, in stores, in digital, and build a community.”
Chick-fil-A has signed a 20-year lease on a 6,000 square-foot lot in the Midwood section of Brooklyn, where it will build its first ground-up, stand-alone location in New York City. Click here to request a sample list of future store openings.
Natural Grocers will open its newest location in Sioux Falls, SD, its first in the state, on July 27. The Company also announced last week it is holding a national hiring initiative for nearly 500 positions, primarily in Dallas, TX; Portland, OR; Denver, CO; and the Kansas City, MO area. Natural Grocers has 162 locations in 20 states. Click here to request a sample list of future store openings.
Last week, Publix opened a new 48,400 square-foot location in Beaufort, SC. The store offers dairy, frozen food, seafood, meat and fresh produce departments, as well as a full-service bakery, deli and pharmacy with drive-thru. Click here to request a sample list of future store openings.
The below retailers recently released their earnings reports. To request more information on these companies, or to discuss the financial performance with a retail industry expert, please click here.
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