February 9, 2022
ALDI is continuing its aggressive growth strategy with plans to open about 150 new stores this year. This puts it on track to become the third-largest U.S. grocery retailer by store count by the end of 2022. As part of its Southeast expansion, the Company will soon enter its 38th state with a store in Lafayette, LA. Two more Gulf Coast stores are scheduled to open in early March, as well as 20 more stores throughout the region by the end of the year. To support expansion in the Southeast, ALDI will also roll out a new 564,000 square-foot regional distribution center in Loxley, AL later this year. The facility will eventually service as many as 100 new stores throughout Louisiana, Alabama, Mississippi and the Florida Panhandle.
Additionally, ALDI will boost access to online shopping options with the expansion of Curbside Grocery Pickup from 1,200 to 1,500 stores by the end of 2022. Click here to request a sample list of future openings.
Amazon’s 4Q (period ended 12/31/21) sales increased 9% to $137.40 billion, which excludes $1.30 billion unfavorable impact in foreign exchange rates. By segment, Amazon Web Services (AWS) performed the strongest, with revenue increasing 40%. Third-party sellers also performed well, up 11%, while online stores decreased 1% (still up 45% on a two-year stack basis). Lastly, physical store sales increased 17% (physical store results exclude the online component of sales fulfilled in stores like Whole Foods). Operating income was a bit of a mixed bag due to elevated fulfilment, technology and shipping costs, decreasing to $3.46 billion (2.5% margin) compared with $6.87 billion in the prior-year period. However, operating income was negative for all segments except AWS. Meanwhile, net income was favorably impacted by Amazon’s equity stake in Rivian, which went public. Looking forward, Amazon is guiding to a sales gain of 3% - 8% for the 1Q22 period and operating income of $3 billion - $6 billion, down from $8.90 billion in the prior-year period. The balance sheet remains pristine, supported by $96 billion of cash and securities.
Meanwhile, Amazon announced that the annual price of its Prime membership will rise from $119 to $139 as of February 18, the first hike since 2018.
Finally, Amazon workers at a second warehouse on New York’s Staten Island have filed a petition to form a union. They are seeking to be represented by the Amazon Labor Union, a labor group made up of current and former Amazon employees. This move is in addition to the unionization vote that will soon take place at an Amazon warehouse in Bessemer, AL. Click here to request a sample list of recent and future openings.
On February 4, Kohl’s Corporation stated that the current offers to acquire the Company do not adequately reflect the value of its business, given its future growth potential and cash flow generation. The board designated its Finance Committee, consisting of independent directors, to review and pursue opportunities that would maximize shareholder value. Additionally, Kohl’s has engaged Goldman Sachs and PJT Partners as financial advisors. The Company also adopted a shareholder rights plan, effective immediately, which is scheduled to expire in February 2023.
The plan is a defense tactic, also known as a “poison pill,” allowing existing shareholders the right to purchase the Company’s common stock at a 50% discount, should a person or group acquire 10% or more of Kohl’s common stock (excluding the acquiring party, whose rights will not be exercisable). The Company will provide further updates at its investor day on March 7. Click here to request a sample list of future store openings and closings.
In this second white paper on the supply chain, we discuss the current state of the supply chain, how retail has responded, and the longer-term impact and outlook. Click here to request this report.
Riding the wave of historical growth in golf activity, PGA TOUR Superstore opened five stores in 2021, growing its base to 50, with plans to open eight locations in 2022, including its first in Tampa, FL unit last week. After growing nearly 14% in 2020, golf rounds played grew another 5.5% in 2021, to reach a record 525 million. Golf’s trends are being driven by new audiences picking up the sport, including women, millennials and generation Z, contributing to overall growth of the industry. Management reported it achieved more than 80% sales growth since 2019, and that it expects strong apparel trends to continue in 2022, notably women’s wear, reflecting more relaxed lifestyles both on and off course. Click here to request a list of future openings.
Last week, Kroger opened its third Ocado Customer Fulfillment Center (CFC), in Forest Park, GA. The new location joins CFCs in Groveland, FL and Monroe, OH. The Company plans to augment its fulfillment network with additional CFCs in California; Dallas, TX; Frederick, MD; Phoenix, AZ; Pleasant Prairie, WI; Romulus, MI; as well as in South Florida and the Northeast.
We recently reported on Kroger’s plans to open a 50,000 square-foot facility in Louisville, KY, a “delivery spoke facility” that will collaborate with its Monroe, OH customer fulfillment center (CFC), to process online orders of fresh food. The facility is expected to become operational later this year. The Company’s model centrally locates its larger CFCs as hubs that can work in concert with smaller automated facilities and spoke locations like Louisville to reach additional customers.
Brookshire Brothers announced plans for a new supermarket in Huntington, TX, which will feature a convenience store and fuel center. Construction will begin in early 2023, with a targeted opening date in spring 2024. Brookshire also acquired substantial real estate in its own hometown of Lufkin, consisting of 26 acres, and is evaluating options for its use. Meanwhile, the Company will open a new 42,000 square-foot store in Cuero, TX on March 2. According to management, the Company remains focused on investing millions of dollars into enhancing many existing locations, including stores in Smithville, Lumberton, Rusk, Jacksonville, Katy and Lufkin. Renovations included major exterior facelifts, interior paint and flooring, updated signage and build-outs to host curbside pickup and the Brookshire Brothers Anywhere delivery service. The Company currently has more than 100 grocery stores, 16 express stores, a central distribution center, 72 pharmacies, 87 fueling stations, 4 coffee shops and 2 event venues.
In this special analysis, our analyst team takes a look at industry trends to watch out for in 2022 along with predicted winners, losers, and question markets for each segment. Click here to request this report.
Kum & Go is planning a set of stores in the Boise, ID metro area that will open in 2023. The news follows Kum & Go’s previously announced planned expansion into Utah and Michigan later this year. Kum & Go is also growing its in-store offerings and recently launched a new made-to-order fresh menu at select locations. Des Moines-based Kum & Go is a family-owned convenience store chain that operates more than 400 convenience stores in 11 states.
Georgia retail startup Nourish + Bloom Market has partnered with frictionless checkout technology provider UST to launch an autonomous grocery store concept whose founders hope to eventually open more than 500 locations. The first Nourish + Bloom, an approximately 1,500 square-foot store equipped with computer vision cameras and robotic delivery vehicles, opened on January 21 in Fayetteville, GA.
For 2Q22, Regis Corporation reported system-wide comps up 22.1%, compared to 2Q21 driven by comp growth of 31% at Supercuts. However, on a two-year basis, system-wide comps remained down 17%. During the quarter, Regis continued to exit Company-owned salons, and as a result, 2Q22 revenue fell 32.7%. However, increased salon sales and lower SG&A drove Company-wide adjusted EBITDA from a loss of $17.5 million in the prior year to positive $2.4 million in 2Q22.
The Company commented that its sales recovery continues to be challenged by lower active stylists and customer counts compared to pre-COVID levels. In the TTM period, 560 salons were sold to franchisees, while 628 and 25 system-wide salons were closed and constructed, respectively. During the same period, franchisees constructed and closed 23 and 299 franchise salons, respectively. With over 97% of the Company’s salons now franchise-only, Regis’ franchise segment represents roughly 93% of sales. 2Q22 franchise-only sales fell 2%, while comps were up 22.4%. The decline in sales was primarily due to the decrease in product sales to franchisees, as the Company transitions to a third-party distribution model. Turning to the balance sheet, Regis’ cash levels fell from $51 million in 2Q21 to $35 million in 2Q22, driven by sustained net losses from the franchise transition, slightly offset by $37 million raised YTD from the issuance of common stock. Compared to the 2Q21 period, total debt rose 9.4% to $194 million.
Bath & Body Works reported 4Q21 sales of $3.03 billion, an 11.4% increase from the prior-year period and a 35.7% increase from 4Q19. Sales during the quarter were driven by a 15.1% jump in domestic in-store sales, while e-commerce sales rose a modest 1.9% year-over-year. Prior-year in-store sales were impacted by temporary pandemic closures. However, when compared to 4Q19, in-store sales rose 25.6%, and e-commerce sales jumped 77.4%. Click here to request a sample list of future openings.
Despite operating 136 fewer stores compared to 1Q21, Sally Beauty’s sales grew 4.7% in 1Q22, driven by comps of 6.1%. Additionally, global e-commerce sales were up 23% YOY, representing 8.3% of sales. During the quarter, the Company closed 20 Sally Beauty stores and opened two Beauty Systems Group locations, ending the quarter with 4,893 locations (3,529 Sally Beauty and 1,364 Beauty Systems Group).
Starbucks Workers United has now announced public union campaigns in 60 stores in 19 states. Last week, 14 Starbucks stores went public with their organizing. All of these stores are corporate owned. Workers at Starbucks stores in New York, Arizona, Massachusetts, Washington, Colorado, Tennessee, Illinois, Oregon, Ohio, Florida, New Jersey, Maryland, Virginia, California, Georgia, Pennsylvania, Michigan, Kansas and Missouri have announced public union drives. Starbucksstill opposes the union. The Company is slowing the voting process by requesting regional NLRB offices to refuse elections on a store-by-store basis. Starbucks has argued the appropriate electoral unit is the regional market, rather than a single store.
Starbucks’ 1Q22 consolidated sales rose 19% to $8.05 billion, primarily driven by 13% global comp growth and 4% year-over-year net unit growth. U.S. comps were stronger than the global average at 18%, consisting of a 12% increase in transactions and a 6% increase in average ticket. Consolidated operating margin improved 110 bps to 14.6% in 1Q, reflecting menu price increases and the lapping of certain costs related to the North America system re-optimization in FY21, partially offset by inflationary pressures and increased supply chain costs. These headwinds are expected to persist for at least the short-term, and the Company already implemented a menu price increase in January to mitigate the negative impact.
The Buckle’s January sales increased 2.9% to $64.9 million, and comps were up 4.2%. Sales for the 13-week period ended January 29 rose 19.5% to $380.9 million, and comps were up 20%. For the 52-week period, sales increased 43.6% to $1.295 billion, and comps were up 43.8%. Buckle operates 439 stores in 42 states, having closed one underperforming store at the end of January.
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.
Peter Piper Pizza, a subsidiary of CEC Entertainment, will introduce its new off-premise-only concept in Phoenix, AZ. The first of three Peter Piper Express locations is set to open on March 1. The brand said that off-premise sales now account for more than 40% of sales at its corporate-owned, full-service locations. Peter Piper Pizza projects its ‘Express’ locations will be 15% of the size of the brand’s traditional restaurant, leading to lower operational costs.
Citing a decline in the number of customers using counters on a regular basis in some stores, Tesco said that it will close its meat, fish or hot deli counters in 317 stores where it is seeing the lowest demand and repurpose the space to better reflect customers’ needs. Tesco added that it will continue to offer meat, fish or hot deli counters in 279 stores where it is seeing demand continue. The announcement affects U.K. stores only. Tesco also announced on January 31 that it will no longer operate stores under the Jack’s brand. Jack’s, launched in 2018 as a low-cost operation model, will be absorbed into Tesco, as the Company focuses on its core business. Of the 13 Jack’s stores, six will be converted to Tesco superstores, with the remaining seven Jack’s stores to close in the coming months.
Coborn’s announced the grand reopening of the Cash Wise Foods in Willmar, MN. With this store completed, the Company has built or updated more than two dozen of its Cash Wise locations to its “next-generation” format. Coborn’s has built or remodeled several other locations in Minnesota and North Dakota.
US Foods plans to open two new Chef’Store locations, in Visalia, CA and Lynchburg, VA. The new stores will feature a range of restaurant-quality products at wholesale prices, including fresh meat, produce, dairy and deli items. The new 30,000 square-foot store in Visalia will join 14 existing Chef’Store locations across California and is set to open on February 19. The 24,000 square-foot store in Lynchburg will be the first Chef’Store in Virginia and will open in spring 2022.
Giant Eagle is bringing groceries to food-insecure communities, as the Giant Eagle Mobile Market rolls into neighborhoods in Pennsylvania. Stocked with nearly 250 items for purchase, including fresh meat, dairy and produce, Giant Eagle’s trailer made its first rounds last week.
Panera Bread announced a nationwide launch of contactless dine-in, a new feature in the Panera Mobile App that allows guests to order meals on their own devices for plated dine-in service. Now available in most Panera bakery-cafes, contactless dine-in joins the curbside, drive-thru, ‘Rapid Pick-Up’ and delivery options. Click here to request a sample list of future openings.
Camping World inked a deal to acquire Big Daddy RV’s in London, KY. The deal is expected to close in late February and will be the Company’s third location in Kentucky. Upon closing, the location will transition to the Camping World brand.
AMC Theatres reached lease agreements with Unibail-Rodamco-Westfield to acquire and open two currently closed locations, one on February 10 in La Jolla, CA (San Diego market) and the other in March in Bethesda, MD (Washington D.C. market). Both are former ArcLight locations; these locations bring the number up to six former ArcLight/Pacific theatres that AMC has acquired. AMC remains in active discussions regarding additional currently closed locations.
Brinker International’s 2Q Company sales increased 21.2% to $904.5 million. Year-over-year comps increased 17% at Brinker, 12.1% at Chili’s and 78.1% at Maggiano’s. On a two-year basis, comps rose 3.5%, 5%, and fell 5.6%, respectively. Chili’s sales increased primarily due to higher dining room sales, partially offset by a decrease in off-premise sales, while Maggiano’s Company sales increased primarily due to higher dining and banquet room sales. Operating income increased to $39.8 million, compared to $22.1 million last year. During 2Q, Brinker acquired 37 restaurants from its franchisee Quality Dining Inc. in six states (MI, IN, OH, PA, NJ, and DE); this came on the heels of its acquisition of 23 restaurants from franchisee Chesapeake Foods in September. Following these deals, the Chili’s banner is approximately 91% Company-operated (1,125 Company, 109 franchised).
Wingstop is opening a cashless, digital-focused prototype in Dallas, TX that will serve as an innovation lab to test new equipment and restaurant configurations. The 1,300 square-foot restaurant (about 400 square feet smaller than the average Wingstop unit)offers no dining tables in its lobby. The concept builds toward Wingstop’s goal of reaching 100% digital transactions, with a focus on delivery and to-go orders. Click here to request a sample list of future openings.
Inspire Brand’s Jimmy John’s chain, which has more than 2,600 locations across 43 states, opened its first-ever drive-thru and pick-up only site, in Bartow, FL. The new format features dual-sided pick-up windows, with one lane designated for online and mobile orders. Customers also have the option to pick up their mobile and online orders at dedicated carryout lockers, allowing for an entirely contactless experience.
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.
