Openings, Closings, & Other Key Industry Highlights

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November 2, 2022


The fight against the Albertsons and Kroger merger continued last week, as a number of state attorneys general have “asked” Albertsons to not pay the special $4 billion dividend until the regulatory review is complete, and argued that paying a dividend of this size will hamper Albertsons’ ability to meaningfully compete. In response, Albertsons management said, “Following the dividend payment, Albertsons will continue to be well capitalized with a low debt profile and strong free cash flow.” The Company went on to say the payment is independent of the merger and part of a plan to return capital to shareholders. They went on to say the potential liability from canceling the payout means it cannot comply with the states’ request. Management noted that canceling the dividend “would expose Albertsons to significant legal and financial liability,” as trading in the stock ex-dividend is ongoing and “investors of all sorts are acting in reliance” on the plans. “Accordingly, Albertsons cannot comply with the states’ request to delay payment of the special dividend.” The Company plans to finance the dividend using $2.50 billion in cash and tap its $4 billion revolver for the remainder. As of its 2Q22 ended September 10, the Company had $3.40 billion in cash and $3.76 billion available under the revolver. Pro forma for the dividend, which is scheduled to be paid on November 7, debt to EBITDA would remain strong at just over 2x. The Company also generated nearly $600 million in free cash flow during 1H22. A Senate antitrust panel is planning an upcoming meeting to examine the competitive impact of the merger, and several union groups have come out against the merger and dividend, arguing the money should instead be used to lower food prices, increase pay or invest in improving employee working conditions. The companies are attempting to position the merger as necessary to better compete against nonunionized Walmart and Amazon, both of whom also have strong and growing digital businesses. A key driver of this merger is building scale in not only brick-and-mortar sales but also e-commerce, customer data and the growing retail media platforms, which compete for supplier advertising money. However, as they seem to have done in past abandoned transaction attempts, regulators may have a more narrow focus on the competitive impact on smaller independent and regional grocers as a result of combining the two largest traditional grocery chains.

In what could be seen as a potential threat to the Albertsons and Kroger merger, a federal judge blocked on Monday a bid by Penguin Random House, the biggest book publisher in the U.S., to buy one of its main rivals, Simon & Schuster. An argument for supporting the merger was so the publishers could lower costs and better compete against Amazon, similar to Albertsons and Kroger’s argument. However, the judge said in an order that the Justice Department had demonstrated that the merger might 'substantially' harm competition in the market for U.S. publishing rights to anticipated top-selling books. 


Amazon reported mixed 3Q results, as sales impressed due to an extra Prime Day in the period, though guidance fell short of expectations. 3Q sales increased 19%, excluding foreign exchange impacts, led by AWS (up 27%). Physical store sales advanced 10%, and online stores advanced 7%. Operating income held up relatively well at $2.53 billion (2% margin); however, consistent with recent results, operating income was negative for all segments except AWS. Meanwhile, the Company’s stock took a beating after hours, falling by more than 10% with the Company having issued conservative 4Q guidance, including sales advancing between 2% and 8%; operating income is expected to be between nil and $4 billion.


Unconfirmed reports indicate that VillageMD, which is majority owned by Walgreens Boots Alliance, is exploring a deal to merge with Warburg Pincus-backed Summit Health, a health care network and the parent of CityMD. In 2020, Walgreens acquired a 30% interest in VillageMD for approximately $1 billion, and last November invested another $5.20 billion to increase its stake to 63%. At its FYE August 31, 2022, Walgreens operated 334 VillageMD clinics, with plans to grow to 600 by CY25 and 1,000 by CY27. Summit Health, formed in 2019 by the merger of Summit Medical Group, an independent physician-governed multispecialty medical group, and CityMD, a leading urgent care provider in the New York metro area, has more than 370 locations in New Jersey, New York, Connecticut, Pennsylvania and Oregon. The report said that an agreement could be reached in the coming weeks, though talks could still fall apart.

As we have been reporting, Walgreens and other retail businesses including Walmart, CVS and Amazon have been expanding into primary care, attempting to position themselves as entry points to the health care system. Walgreens has been adding standalone and co-located primary-care centers to its U.S. retail business, partnering with health insurers and recently bought out the remaining equity stakes in CareCentrix and Shields Health Solutions. In October, it appointed John Driscoll, CareCentrix’s CEO, as president of Walgreens’ new US Healthcare unit. The Company has also launched an initiative to enroll patients in clinical trials.


Walmart announced the completion of the renovations made to its retrofitted regional distribution center (RDC) in Palestine, TX, transforming it into a high-tech automation center. This multimillion-dollar investment to the 1.2 million square-foot facility is part of a broader initiative the Company announced last year to renovate all 42 RDCs with automated technology. The digital transformation is aimed at ensuring customers get the items they want, when and how they want them.

In other news, Walmart is partnering with Popable, a pop-up shop marketplace platform that connects brands and physical spaces for short-term retail leasing. Under the deal, small businesses will be able to rent retail space in designated Walmart stores across the country for short-term leasing.

Meanwhile, Walmart and Netflix are expanding their digital Netflix merch shop to physical stores. The shop, called The Netflix Hub, will be launched at more than 2,400 Walmart locations and will offer music, apparel, collectibles, games, and seasonal items from big Netflix franchises.

Walmart Health plans to open 16 new health centers in Florida, in Jacksonville, Orlando and Tampa. The stores are expected to open by fall 2023, bringing the total footprint to 22 centers across the state. The new state-of-the-art facilities, located beside Walmart Supercenters, will provide a range of healthcare services seven days a week. Walmart Health’s first six locations in Florida opened in 2022. 


Kohl’s opened a new 35,000 square-foot store in Tacoma, WA, which is much smaller than the average Kohl’s at 80,000 square feet. The location has a Sephora, self-checkout/self-pickup, and features new and diverse private label brands. The Company intends to use the location to test ideas and store experiences that may be implemented in new or existing locations in the future. This comes after Kohl’s revealed plans in May 2022 to open about 100 small-format stores over the next five years in new markets, following a successful pilot of more than 20 smaller stores. Three additional small-format stores are set to open this fall in San Angelo, TX; Morgantown, WV; and Lenox, MA. Click here to request a sample list of future store openings.


Ross Stores has completed its 2022 expansion plans, which called for the opening of 100 stores (75 Ross Dress for Less and 25 dd’s Discounts). During September and October, the Company opened 28 Ross and 13 dd’s Discounts stores across 21 states. The Company currently operates 2,019 stores in 40 states, Washington D.C., and Guam, including 1,696 Ross stores and 323 dd’s stores. Ross continues to target growing to at least 2,900 Dress for Less stores and 700 dd’s locations over time. Click here to request a sample list of future store openings.


Harps Food Stores announced a deal to purchase The Markets, an independent grocery retailer with three locations in central Louisiana (Ball, Ferriday and Vidalia) and four in southwestern Mississippi (three in Natchez, one in McComb). The deal, financial terms of which were not released, is expected to close by the end of the year. Those additions will represent Harps’ first Mississippi and Louisiana locations and lift the chain over the 140-store mark. Currently, Harps operates 135 stores under multiple banners, in Arkansas, Oklahoma, Missouri and Kansas. The deal to purchase The Markets comes more than two years after Harps acquired 20 stores in Arkansas and Missouri from Town & Country Grocers. 


Trader Joe’s workers at a store in Brooklyn, NY have voted not to unionize. The vote was 94-66. The decision to reject efforts to unionize follows votes in favor of joining the Trader Joe’s United labor group at locations in Minneapolis and Hadley, MA, earlier this year. Trader Joe’s United vowed to move ahead with its efforts to unionize Trader Joe’s workers despite the outcome of the election at the store. Click here to request a sample list of future store openings.


BJ’s Wholesale Club will open a new club in New Albany, OH on November 4. A BJ’s gas location will be onsite, and the warehouse will offer curbside/store pickup and same-day delivery. The Company has opened three new locations and moved to a new headquarters in the past few months. BJ’s operates more than 230 clubs, 160-plus BJ’s Gas locations and seven distribution centers in 18 states. Click here to request a sample list of future store openings.


Aritzia announced its FY27 strategic and financial plan, Powering Stronger. The plan includes opening eight to ten new stores and expand three to five existing stores per year through FY27, resulting in annual square footage growth in the low double digits. Meanwhile, Aritzia will continue growing its e-commerce business, which expanded 150% from FY20 to FY22, including creating new digital platforms such as a client app. The Company also plans to build on its “everyday luxury” experience through increased brand awareness, new client acquisition, and loyalty.


Abercrombie & Fitch has expanded its fulfillment capabilities by adding alternate pickup locations as an additional e-commerce delivery option for its U.S. customers. At launch, A&F is partnering with 12,000 locations nationwide, with pickup available at FedEx, Office Depot, and Walgreens locations. The Company also partners with Uber, Shipt, Postmates, Roader, and software provider Delivery Solutions to provide same-day delivery at more than 540 A&F, Abercrombie Kids, Hollister, and Gilly Hicks stores. 


Skechers3Q22 sales increased 20.5%, reflecting a 14.9% improvement domestically and a 24.6% increase internationally. Growth was primarily driven by strength in wholesale sales, which grew 26.2%, and direct-to-consumer sales growth of 11.9%. Gross margin was 47.1%, a decrease of 280 bps, primarily due to increased freight and logistics costs, and a higher proportion of distributor sales, partially offset by average selling price increases. As a result, operating income fell 11.1% to $140 million. Year-to-date, the Company has opened 529 domestic (36), international (117), and licensed (376) stores, while closing 377 underperforming domestic (19), international (90), and licensed (268 stores). Click here to request a sample list of future store openings.


Ace Hardware has opened 130 new stores so far this year (43 in 1Q22, 34 in 2Q22, and more than 50 in 3Q22), and it plans to open another 40 locations in 4Q22. Currently, there are roughly 5,700 Ace hardware stores nationwide and in 65 countries, including 4,362 in the U.S. Management indicated that 70% of online orders are fulfilled in store, and 20% are delivered by Ace employees. Globally, the Company has opened more than 900 stores in the past five years. See our Retail Openings & Closings below for future store activity. Click here to request a sample list of future store openings.


Sleep Number’s 2Q23 sales decreased 16% to $541 million. Retail comps dropped 21%, compared to a 19% increase last year; online sales were flat and represented 13.7% of total sales. Year-to-date, the Company has opened 35 stores (12 during 2Q23) and closed 21 underperforming stores (nine during 2Q23), ending with 662 stores in operation. Click here to request a sample list of future store openings.


Regis Corporation reported 1Q23 adjusted EBITDA of $3.8 million, compared to a loss of $5 million in the prior-year period, driven by an increase in average royalty revenues, lower general and administrative expense, and the wind-down of loss-generating Company-owned salons over the last year. Consolidated revenue was down 20% to $61.9 million due to the aforementioned exit of Company-owned salons. System-wide revenue was roughly flat at $316 million, and comps were up 4.5%. The Company ended the quarter with 5,323 franchise salons, down 264 from the prior year but representing 98.2% of total salons, up from 96.9% a year ago. It also owned and operated 95 salons, down from 179 a year ago and representing 1.8% of total salons, down from 3.1%. 


Chipotle’s 3Q sales and comp growth remained strong, at 13.7% and 7.6%, respectively. Chipotle improved its restaurant-level operating margin 180 bps to 25.3% on the back of menu price increases that more than offset commodity inflation. A shift-back toward dine-in ordering (digital orders accounted for 37% of sales versus 43% last year) also reduced delivery costs. The Company will need to pick up the pace substantially to meet its FY22 store-expansion target, having only opened 136 new stores YTD out of a planned 235 to 250, barring further construction and material supply delays. That said, management is committed to expansion going forward and set a target of opening 255 to 285 new restaurants in FY23. Click here to request a sample list of future store openings.


Save Mart Companies opened a small-format, full-service grocery store in San Francisco’s Bayview neighborhood under its Lucky banner. According to the Company, the 9,550 square-foot store will offer shoppers fresh groceries and meal solutions as a “low-price leader.” It also offers online shopping and home delivery in partnership with Instacart.


O’Reilly Automotive’s 3Q22 sales increased 9% to $3.80 billion, and comps were up 7.6%; three-year stacked comps increased 31.2%. The Company delivered double-digit growth in its professional business, while also driving low single-digit DIY sales growth. Despite gross margin erosion, operating income increased 7% to $804 million. Year-to-date, the Company has opened 154 net new stores across 38 U.S. states and Mexico, and it remains on track to reach its target of 180 net openings in 2022. Looking to FY23, the Company anticipates opening 180 – 190 net new stores. 


Wegmans plans to open an 85,000 square-foot store in Reston, VA on February 1, 2023. The location will include an in-store coffee shop, Market Café and Burger Bar. It is the Company’s 15th store in the state. Click here to request a sample list of future store openings.


PriceSmart’s 4Q22 revenues increased 12.3% to $1.02 billion. Net merchandise sales jumped 13.6% to $989.9 million, including a $24.8 million or 2.9% negative impact from currency exchange. Comps increased 9.2%. Operating income was $39 million, compared to $32.5 million in the prior-year period. PriceSmart opened three new warehouse clubs over the past year, bringing its total count to 50.


At Home opened three new stores in October, bringing its total store count to 258. The new stores are in St. Petersburg, FL; Fayetteville, GA; and East Northport, NY. The Company now has 12 stores in Florida, 13 in Georgia, and 12 in New York. See the Retail Openings & Closings map below for the Company’s other future openings. Click here to request a sample list of future store openings.


On November 4, Academy Sports + Outdoors will open a 50,000 square-foot store in Houston, TX, becoming its 33rd in the greater Houston area, and its 107th store in Texas. This marks the seventh store the Company will open this year, out of nine planned. The other two stores expected to open over the next two months will be in Barboursville, WV and Pinellas Park, FL. Academy aims to open 80 to 100 new stores over the next five years. Click here to request a sample list of future store openings.


Starbucks workers at one of the chain’s two co-branded Starbucks Pickup / Amazon Go locations, both of which are located in New York City, have filed for a National Labor Relations Board union election with Starbucks Workers United. 


Wingstop bounced back from a 3.3% comp decline in 2Q to a 6.9% increase in 3Q, driven by a combination of menu price increases and improved traffic trends. The Company still expects low single-digit comps for the full year, and narrowed its store expansion guidance to 225 to 235 new units, mostly from franchisees. As a chicken-wing focused chain, store-level margins have benefited from deflation in bone-in wing prices (43% y-o-y). Click here to request a sample list of future store openings.


Tropical Smoothie Cafe opened its first double drive-thru in Oklahoma City, OK on Thursday. Franchisee Rohit Patel of Hero Hospitality operates the cafe, his 14th with the brand, with a standard drive-thru lane and one for mobile orders, third-party delivery and curbside order pickup. Tropical Smoothie Cafe opened 35 new cafes in its 3Q. The Company has signed 186 franchises agreements so far this year and opened 119 new units.


Tops Friendly Markets reopened a renovated store in Greece, NY last week. This renovation marks the 27th location recently updated with a new look and a renewed focus on fresh departments.


GPM Investments LLC, a wholly owned subsidiary of ARKO Corp., is acquiring Pride Convenience Holdings LLC, which operates 31 convenience stores in New England. The acquisition will expand ARKO’s c-store footprint into Massachusetts, marking its 34th operating state. Pride operates many large-format stores, including two high-volume travel centers for long-haul truckers and two modern City Stop locations that cater to short-haul truckers. Additionally, it operates a centralized kitchen that provides fresh baked goods and food daily to all its stores. The total purchase price for Pride is approximately $230 million plus inventory.


Chick-fil-A will open a new restaurant in Watertown, NY on November 9. Competitive activity in the city includes a replacement Panera Bread, a Popeyes Louisiana Chicken and a Taco Bell


For more information on AggData contact Josh Suffin@ (800) 789-0123 x172