September 29, 2021
Dollar General announced its planned expansion into Idaho, marking entry into its 47th state and leaving only Hawaii, Montana and Alaska untapped. Construction is underway on a store in Athol, which is currently scheduled to open by spring 2022. Local retail food competitors include Super 1 Foods, Kroger’s Fred Meyer, and Winco Foods; Dollar Tree also has an area presence. As of July 2021, the Company operated more than 17,600 stores and plans to open over 1,000 stores, remodel 1,750 existing units and relocate 100 stores during the current fiscal year. Click here for a sample list of future openings and closings.
Del Taco announced its newest multi-unit deal with franchise group Feel Good Brands (FGB), which calls for three planned new locations on the Las Vegas Strip and surrounding area. Financial terms of the deal were not disclosed. Del Taco’s SVP of Development Jeff Little commented, “We are well penetrated in Las Vegas with almost 40 restaurants, but for years we’ve been looking for an opportunity to access the tourist sector of the Las Vegas Strip, as we believe it will help us not only locally, but also help us to introduce the brand to customers nationally as they travel in and out of Las Vegas.” FGB already operates 10 iconic food brands throughout Las Vegas, including Popeyes Louisiana Kitchen, Pick up Stix, and Krispy Kreme.Click here for a sample list of future openings.
This whitepaper discusses the pandemic-induced and lingering supply chain constraints, and their impacts on inventory levels, costs, retail pricing and profits, and overall inflation. Click here to request a copy of the full report.
Southern-inspired fast-casual restaurant brand Chicken Salad Chick plans to add 50 locations in the Midwest during the next four years via strategic franchise partnerships. The goals build on Chicken Salad Chick’s recent growth, with 17 signed agreements year-to-date and 40 locations projected to open by year-end. The Company recently opened its 200th location; current projections call for 500 units operating by the end of 2025.
Amazon has opened more than 250 U.S. facilities this year; earlier this month, the Company set a goal of opening 100 additional U.S. facilities in September, ahead of the holiday season (no word on whether they are meeting this goal as of press time). Amazon also plans to hire 125,000 workers for its warehouses and fulfillment centers.
Meanwhile, Amazon acquired a 58.5-acre parcel of undeveloped land in Pleasanton, CA for about $75 million and reportedly has plans to open a distribution warehouse there in the future. Click here to request a sample list of future distribution center openings.
Local reports claim the last Kmart store in Michigan, a 90,000 square-foot unit in Marshall, will close by November 21. The store is more than 100 miles west of Troy, where Kmart’s international headquarters were previously located before the Company was sold to Sears Holdings Corp. in 2005. In March 2019, a federal bankruptcy judge approved the sale of Sears Holdings to Transformco for $5.20 billion; there were 202 remaining Kmart stores. Click here for a sample list of recent and future closures.
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OfficeMax is closing two of its four stores in the Akron, OH area, in Fairlawn and Stow, though closing dates were not disclosed. The other two locations in Wadsworth and Macedonia will remain open. The chain also announced plans to close its Orangeburg, SC store by November 13. The other two locations, in Greenwood and Myrtle Beach, SC, will remain open. OfficeMax is a unit of ODP Corporation, which said it had closed 63 stores so far in 2021, according to its August 4 earnings release for 2Q21. OfficeMax operates more than 300 locations nationwide. Click here to request a sample list of future closings.
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Floor & Décor opened a new, 70,000 square-foot store in Waltham, MA on September 23. This is the Company’s third store in Massachusetts and 153rd store overall. The Company plans to open 27 new stores in FY21, of which 18 have opened so far. Click here for a sample list of future openings.
Earlier today, Casey’s General Stores announced an agreement to acquire 40 Pilot convenience stores from Pilot Corporation for $220 million in cash. The stores will extend Casey’s presence in Tennessee and Kentucky, with well-established locations primarily in the Knoxville market. Casey’s will fund the deal with a combination of cash on hand and bank financing; at July 31, the Company had nearly $675 million in combined cash and revolver availability. Click here for a sample list of future openings.
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Ahold Delhaize USA’s Stop & Shop banner announced plans to close 19 of its in-store pharmacies on the East Coast in stages by early November due to “steadily declining prescription reimbursements by private and government third-party payors.” Technicians at the pharmacies will be transferred to other locations. A spokesperson commented, “Stop & Shop will continue to operate a strong core of more than 200 retail pharmacy locations across the Northeast. Click here to request a complementary list of store locations.
On September 22, convenience store operator Yesway filed a statement with the SEC for a proposed IPO. The Company has applied to list on the Nasdaq under the ticker symbol “YSWY.” The number of shares to be offered and pricing have not yet been determined. Yesway had $1.60 billion in sales for the 12 months ended June 30. The Company has been on the fast track, expanding operations through acquisitions since its founding in 2015.
In November 2019, Yesway acquired the 304-store Allsup’s Convenience Stores chain. The Company currently operates 403 convenience stores throughout Texas, New Mexico, South Dakota, Iowa, Kansas, Missouri, Wyoming, Oklahoma and Nebraska. Click here to request more information.
Madewell, a subsidiary of J. Crew, has partnered with the online fashion resale site ThredUp to open a store in the Williamsburg neighborhood of Brooklyn, NY, selling used Madewell merchandise. The pop-up location will be open until the end of October and merchandise will be priced from $10 – $40. This follows the launch earlier this year of Madewell Forever, which is the chain’s resale platform powered by ThredUP’s resale-as-a-service offering.
Party City plans to invest more than $32 million to lease a 209,000 square-foot office building in Woodcliff Lake, NJ, which will function as its new headquarters. As part of the deal, the Company will consolidate its Rockaway, NJ and Elmsford, NY locations, create 357 new full-time positions, and retain 338 full-time jobs in New Jersey. Party City received a seven-year, $10 million tax incentive from the board of the New Jersey Economic Development Authority to stay in New Jersey.
Published reports claim ALDI will “invest £1.30 billion (US$1.80 billion) in Britain over the next two years, opening a new store every week to try to accelerate its rapid growth in market share.” The story also noted that the Company plans to create 2,000 jobs and open an additional 100 stores across the U.K. over the next two years as part of a plan to take a larger share of the British grocery market.”
In connection, ALDI confirmed it has begun testing its first fully autonomous, checkout-free store in Greenwich, London, which uses a mix of cameras, sensors and artificial intelligence. While the opening date has not been released, the store cost a reported £1.8 million and will operate under the smaller-format and urban-based ALDI Local banner. Click here for a sample list of future openings.
Hy-Vee opened a new 92,000 square-foot store in Eau Claire, WI yesterday, marking the Company’s fourth location in the state. The store features a Market Grille Express and an adjacent Hy-Vee Fast & Fresh convenience store in the parking lot, which opened in May. Employee-owned Hy-Vee has more than 280 locations in eight Midwestern states. Click here for a sample list of future openings.
Woodman’s Market recently opened a store in Bloomingdale, IL, in the Stratford Square Mall. The 243,000 square-foot location operates 24 hours a day, seven days a week, and has an attached 2,300 square-foot carwash and gas station. The space had previously housed a Macy’s, which closed in March 2017. Woodman’s operates 19 stores spanning from northern Wisconsin to the greater Chicago area. Click here to request a complementary list of store locations.
Tilly’s reported record sales in 2Q21 as its target demographic of teens and young adults returned to stores for in-person shopping. The e-commerce channel, which more than doubled during the pandemic to 38% of 2Q20 sales, moderated to 19% of 2Q sales from the shift to in-store shopping. 2Q21 sales were up 49% to $202 million, driven by an 11% increase in comps, and six net new stores. Overall, EBITDA was up 124% to $31 million, or 15.6% on a margin basis. For the YTD period, Tilly’s sales and EBITDA recovered to $365 million and $51 million, respectively, due to a 9% increase in comps and the additional stores. In 1H21, the Company generated $15 million in free cash flow on stronger operations, which along with cash was used to pay a $30 million special dividend. As of July 31, 2021, liquidity was $212 million, including $63 million of revolver availability. The 3Q, which includes the back to school rush, is off to a strong start with August sales up 94% and also up 20% over 2Q19, due to the additional stores and normalizing operations as schools returned to in-class learning.
RH opened a 60,000 square-foot, three-level store at Oakbrook Center, in Oak Brook, IL; this is the chain’s fourth location in Illinois and 104th overall. RH at Oak Brook features luxury home furnishings displayed in a gallery setting, with spaces for RH Interiors, RH Modern, and RH Outdoor; it also offers professional design services. The location also has a rooftop restaurant and wine bar.
Citi Trends’ top-line growth continued into 2Q21, with sales rising 10% and 30% compared to 2Q20 and 2Q19, respectively. The addition of 10 net new stores and a 9% increase in comps raised sales to $237 million. Gross margin contracted 40 bps on higher freight costs related to supply chain headwinds, and SG&A margin deteriorated 500 bps. Overall, EBITDA reached $22 million or 9% on a margin basis, compared to $5.6 million in 2Q19. At quarter-end, the Company had $101 million in cash and no loans outstanding under its $75 million revolver. Based on its strong 1H21 performance, management raised sales guidance from a previous range of $970 million – $990 million to an adjusted range of $990 million – $1 billion. The Company expects to open 25 stores in 2H21, in line with its expansion plans to add 100 locations by 2023.
Family-owned Pay and Save, dba Lowe's Market, which operates about 145 supermarkets in five Southwestern states, has experienced minor unit growth in recent years, with store count and annual sales remaining relatively flat. The Company’s top line received a boost in 2020 on increased demand related to COVID-19, but higher costs for labor and safety measures during this period may have mitigated the positive impact on profitability. Pay and Save’s stores generally cater to Hispanic customers and are predominantly located in small to medium-sized towns. The Company competes with Fiesta Mart, Albertsons, Kroger’s Smiths, Brookshire Grocery, and ALDI, which now has about 130 stores in Texas. The Company is also facing increasing pressure from dollar formats. While management has not indicated plans to accelerate expansion, it is slowly embracing omnichannel trends, having partnered with Instacart to offer delivery. Click here to request a complementary list of store locations.
Costco reported 4Q21 and FY21 results last week. Revenue was up 17.5% for the quarter and 17.7% for the year. While the Company ended its four-quarter streak of double-digit comp increases, comps still improved a healthy 9.4% and finished the year up double digits at 13.4%. During the quarter, jewelry (including several pieces priced over $100K), home furnishings, and sporting goods were the top performers. E-commerce cooled during the quarter, up just 9%, after generating some impressive double-digit growth in quarters one through three. Membership revenue continued its steady march forward, up more than 11%. Costco added 22 new clubs in FY21 and is targeting another 25 for FY22, including its first club in New Zealand. The balance sheet remains healthy in a net cash position, with no debt maturities until May 2022. Click here to request a list of future store openings and closings.
Mattress Firm, owned by Steinhoff International, confidentially filed paperwork for a potential U.S. IPO. The offering size and pricing have not yet been determined. The Company’s operating performance and balance sheet have remained solid during the pandemic. Revenue for the first nine months of FY21 was up 29%, despite a 4% reduction in store base to about 2,360 locations, due to 46.2% comp growth and a 24.5% increase in e-commerce sales (7.1% of total sales). According to reports, the Company is pitching a $1.10 billion Senior Secured Term Loan due 2028, to fund a special $1.10 billion dividend to shareholders and management.
Macy’s plans to hire about 76,000 full and part time employees at its Macy’s, Bloomingdale’s, and Bluemercury stores, call centers, and distribution and fulfillment centers. Approximately 48,000 of the positions are for the holiday season. The remaining 28,000 roles are permanent opportunities. The vast majority of hires will be for the Company’s retail stores (54,300). Approximately 21,200 positions are in fulfillment centers, 300 are in Macy’s credit and customer service, and 200 are in Macy’s Johns Creek campus in Atlanta, GA.
Walmart is partnering with health records system company Epic to create and implement a unified portal in four new Walmart Health Centers opening in Florida in early 2022. The portal allows patients to securely access health information, communicate with providers, schedule appointments, and pay bills. The partnership continues Walmart’s expansion of its healthcare offerings. In June 2021, the Company acquired the technology platform, patents and intellectual property of CareZone, which operates an online pharmacy that puts medications into pill packs for mail delivery and offers an app that helps people manage health information and medications. CareZone will remain a separate company unrelated to Walmart. In May 2021, Walmart agreed to acquire MeMD, a telehealth provider to complement its in-person Walmart Health store offering. Click here for a sample list of recent and future openings/closings.
Neiman Marcus is partnering with digital media platform Hypebeast to promote exclusive footwear from 11 luxury brands. As part of its “Re-Introduce Yourself” campaign, the Company is launching a virtual shopping showroom to feature these products. Customers can enter the virtual space and use the interactive navigation to shop the brands. The 11 brands will be available exclusively on Neiman Marcus’ e-commerce site, and select styles will be available at all 37 Neiman Marcus stores.
Nordstrom opened a 5,500 square-foot Nordstrom Home shop inside its 320,000 square-foot flagship store in Manhattan, NY. Nordstrom Home sells kitchen and tabletop, home textiles, and home décor products, and serves as a physical touchpoint for direct-to-consumer brands such as Bearaby, Casper, Great Jones, and Open Spaces. Reports say the Company is not planning to roll out in-store Nordstrom Home shops at all locations, but many of the brands will be rolled out to other Nordstrom locations.
Portland, OR-based New Seasons Market and its New Leaf Community Markets division announced an increase to their hourly starting wage to $16.25, beginning October 6 for all hourly staff. The Company operates 19 New Seasons stores primarily in Oregon and Washington (with one unit in Northern California), as well as five New Leaf Community Market stores in California’s Central Coast region. According to New Seasons’ website, the Company plans to open a Lake Oswego, OR store in spring 2022 and a downtown Vancouver, WA location in fall 2023.
Parent company Good Food Holdings also operates the Bristol Farms and Lazy Acres Natural Market in Southern California, and Metropolitan Market in Seattle. Emart, part of global retailer The Shinsegae Group and operating about 200 stores in South Korea, acquired Good Food Holdings in 2018.
Weis Markets and DoorDash have partnered to offer on-demand grocery delivery from over 170 Weis Markets stores across New Jersey, New York, Pennsylvania, West Virginia, Maryland, and Delaware. DoorDash will offer more than 47,000 items from Weis, including fresh meat and seafood, produce, dairy, snacks, and other grocery staples.
Rite Aid has expanded its partnership with Uber Technologies to offer delivery across 17 states through Uber Eats. The partnership will allow customers to order and receive healthcare and grocery items directly to their homes. On-demand delivery is now available for 2,185 Rite Aid locations on the Uber Eats app.
In connection with this announcement, Bartell Drugs (acquired by Rite Aid in 2020) also said it is partnering with Uber Technologies to offer delivery in the Puget Sound region through Uber Eats. On-demand delivery is now available for all 67 Bartell Drugs locations through Uber Eats.
Darden’s 1Q22 sales surged 51% to $2.31 billion, driven by blended same-restaurant sales of 47.5% and the addition of 34 net new units. Same-restaurant sales rose 37.1% at Olive Garden, 47% at LongHorn Steakhouse, 84.6% at Fine Dining, and 65.8% at “Other Business.”
The Company increased its financial outlook for FY22, now expecting sales growth versus pre-COVID of 7% – 9%, same restaurant sales versus FY21 of 27% – 30%, 35 – 40 new restaurant openings, capex spending of $375 million – $425 million, and EBITDA of $1.54 billion – $1.60 billion.