April 27, 2022
Amazon opened an Amazon Fresh store in Mission Viejo last week and has two additional openings planned for Southern California, in LaVerne (this Thursday) and Murrietta (May 5). The new locations all measure about 35,000 square feet and feature the Company’s Just Walk Out technology. With the new stores, Amazon will operate 14 Fresh stores in Southern California and 30 overall in Washington, Virginia, Maryland, Pennsylvania and Washington, D.C., all opened in the past two years. Though the representative did not elaborate, a Company representative further indicated that new Fresh units are planned for California, Illinois, New Jersey, Pennsylvania, Virginia and Washington State; we had previously estimated Amazon could open around 30 of these Fresh locations annually. The Company has also begun hiring for an Amazon Fresh store set to open in Oceanside, NY, the banner’s first location in New York, with two other units slated for Long Island in Plainview and East Setauket. Click here to request a sample list of Amazon Fresh future openings.
Amazon Canada opened a new 855,000 square-foot robotics fulfillment center in Hamilton, Ontario last week. The Hamilton location, which has an accompanying 50,000 square-foot delivery station, represents the Company’s most advanced facility to date, with the ability to store 27 million units and the potential to serve about 325,000 customers daily. Hamilton is the first of four Amazon projects slated for Canada in 2022 and 2023; the Company will add another robotics fulfillment center in Ottawa, a traditional fulfillment center in Southwold, and a sortation center in Whitby. Amazon already operates 10 facilities across the Great White North.
Kroger is hiring more than 200 drivers and associates to support Kroger Delivery in the South Florida market this summer. The Company, which has only one physical store in the state, operates the service in the Florida markets of Orlando, Tampa and Jacksonville via its 375,000 square-foot, Ocado-automated customer fulfillment center (CFC) in Groveland, FL and “spoke” facilities in Tampa and Jacksonville. In October, Kroger announced it would build two small CFCs in South Florida — a micro-fulfillment center enabling Kroger Delivery in as quickly as 30 minutes plus a larger facility offering same-day and next-day service — without disclosing locations or timeframes. Last month, management said it expects to open 17 new CFC hubs and spokes over a two-year period; eight have been announced, with three already live (Tampa, Jacksonville, and Indianapolis, IN) and another five planned for Louisville, KY; Oklahoma City, OK; Austin and San Antonio, TX, and Birmingham, AL.
Kroger’s San Antonio facility is a looming threat to H-E-B, which operated 59 stores in the market with a nearly 60% share as of January 2022. Significantly, according to Nielsen, H-E-B has actually lost share in the last two yearsdespite adding a new store in that time. Kroger’s spoke facility will work with its new 350,000 square-foot robotic fulfillment hub opening in Dallas, TX in the coming months; it anticipates delivery service will be up and running by the end of 2022.
Hy-Vee has scrapped plans for stores in West St. Paul, Farmington and three other metro-area cities, saying the sites do not fit into a new Company strategy that centers around building larger stores and putting more distance between future locations. As a result, Hy-Vee's land in West St. Paul, Farmington, Blaine, Maple Grove and Chaska will go up for sale; the Company did not give a timetable for selling them. Hy-Vee bought the five properties over the past six years as part of its planned expansion, but said that they “are not properly situated” for its long-term goal of building stores at 150,000 square feet or more. The grocer said bigger footprints are needed because of new departments and the addition of “Aisles Online” hubs, which require more space for storage and grocery pick up.Click here to request a sample list of future openings.
Publix Super Markets remains one of the 10 largest grocery chains (and the leading employee-owned supermarket chain) in the U.S., with nearly 1,300 retail stores throughout the southeastern states of Florida, Georgia, Tennessee, Virginia, Alabama, North Carolina and South Carolina. More than 800 of the grocery stores are in Florida, Georgia is home to nearly 200, and the other five states each have less than 100. 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.
Wegmans will open its first store on Long Island in Lake Grove, NY. Wegmans says it has entered into an agreement to purchase 8.5 acres of an existing 28-acre plaza for the 100,000 square-foot store. There is no timeline for the store's construction or opening. A second NYC location is already in the works, with plans announced last year to open a Wegmans in Manhattan in 2023. Wegmans now operates more than 105 stores in seven states with plans for additional stores in Virginia, Delaware, and Manhattan for the next two years. Click here to request a sample list of future openings.
Kohl’s stock was up over 5% yesterday, closing at $60.39, following an unconfirmed published report claiming that Simon Property and Brookfield (which own JCPenney) made an offer of $68 per share, or $8.60 billion. Reports indicate the plan is to maintain both the standalone Kohl’s stores and mall-based JCPenney stores as two separate brands, while cutting costs by $1 billion by streamlining IT and other operations, and combining private-label manufacturing teams. Our Store Overlap Analysis shows there are 558 Kohl’s stores within five miles of 505 JCPenney stores. Click here to request this list. Kohl’s rejected a reported $9 billion offer from Sycamore Partners and Acacia Research in February 2022. The companies reportedly bidding for Kohl’s also include Hudson’s Bay, Starboard Value, and Franchise Group.
In an investor presentation last week, Kohl’s supported maintaining its current management and board. The Company also said that Goldman Sachs, which it hired to explore strategic alternatives, has engaged with more than 25 parties and that “select bidders have been invited to a data room containing over 550,000 pages across over 55,000 documents, as well as meetings with management…. While preliminary, non-binding proposals have been received, further diligence is ongoing, with requests for proposals including committed financing and binding documentation.”
Following this announcement, activist investor Macellum issued a rebuttal to Kohl’s release, stating that the incumbent board is misleading shareholders about its historical performance and Macellum’s ideas. The Company is in a proxy battle with Macellum, which has proposed its own set of directors ahead of the upcoming annual meeting in May.
T. Rowe Price Associates, which owns more than 5% of Kohl’s, announced it will be voting to reinstate the current Kohl’s board of directors and will not be voting for any of Macellum’s nominees.
Grupo Comercial Chedraui is in integration mode after closing on its acquisition of Smart & Final from Apollo Global Management in July 2021; Smart & Final now operates as a division of Bodega Latina, the Company’s U.S. subsidiary, along with the El Super and Fiesta Mart chains. In late December 2021, Bodega Latina announced a name change to Chedraui USA to more closely align it with Grupo Comercial Chedraui. Altogether, Bodega now has 377 locations across California, Nevada, Arizona, New Mexico and Texas. 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.
L.L.Bean announced plans to open five stores in Canada in 2022, part of its continued expansion in the Great White North, in partnership with outdoor apparel licensor Jaytex Group. The new stores will open in Moncton, NB (its first in the province) in August 2022; Kitchener, ON in September 2022; Kingston, ON in October 2022; Edmonton, AB in Fall 2022; and Niagara Falls, ON in Fall 2022. L.L.Bean entered the country in 2018 with the launch of its Canadian e-commerce site; opened its first brick-and-mortar store in Oakville, ON in 2019; and opened four stores in Victoria and Vancouver, BC; Calgary, AB; and Dartmouth, NS last year, bringing its total count to 13. The Company also operates 56 stores in 19 states in the U.S. and 24 stores in Japan. The announcement comes on the heels of L.L.Bean’s most successful fiscal year in Company history, with a 14% annual increase in system-wide revenue and 20% growth in e-commerce sales in Canada. Click here to request a sample list of future openings.
Rite Aid said it rejected a $14.60 per share buyout offer from private equity firm Spear Point Capital, which valued the chain at about $3.60 billion including debt. The Company’s board said the bid was not credible for reasons that included no evidence of financing; it required multiple months of exclusivity and then called for it to spend months soliciting competing offers. In addition, Spear Point’s proposal was conditioned on none of the Company’s debt becoming due and payable upon a change in control, which contradicts the terms of nearly all of Rite Aid’s debt instruments. However, it is possible this bid could spark interest from other potential suitors. Spear Point said it plans to discuss with the Company's shareholders and management about how Rite Aid is "significantly undervalued and explore management's inability to unlock that value." The Company reported better-than-expected 4Q22 results and FY23 earnings outlook. However, the FY23 guidance assumes sales and EBITDA will decline, reflecting the need to offset lost Covid vaccine revenue with cost cuts and new business. Rite Aid’s shares spiked to near $10 last week, before closing down at $7.42 on Friday; the share price is down about 50% in the year-to-date period. Click here to request a sample list of recent and future closings.
Last week, Popeyes announced it will open more than 200 locations in the U.S. and Canada in 2022, bringing its total count to approximately 3,000 domestic units. The new locations include a New York City flagship in Times Square, slated to open in June, featuring a modern design, self-order kiosks, a two-story food transporter for upstairs dining, digital order-ready boards and a merchandise store. More than 50% of Popeyes’ new construction will feature a double drive-thru. The Company also indicated plans to launch in South Korea, France, India and Romania, and to expand in China, Spain, Brazil and Saudi Arabia. Click here to request a sample list of future U.S. openings.
Academy Sports + Outdoors leased 58,075 square feet in a Richmond, VA shopping center to open its first store in the state this fall, in a former Toys “R” Us location. Academy operates 259 stores in 16 southern and Midwestern states; the closest to the newly leased site are its 14 units in North Carolina. The Company plans to open eight locations in 2022, and enter West Virginia with its first store in that state.
In other news, Seoul, South Korea-based Mirae Asset Global Investments has purchased Academy’s headquarters in Katy, TX from Phoenix-based Tratt Properties for $190 million. The 1.5 million square-foot campus, which is triple-net leased to Academy on a long-term lease, includes 1.2 million square feet of warehouse space, 250,000 square feet of office space, and about 800,000 square feet of mezzanine space.Click here to request a sample list of future openings.
Lowe’s has expanded its logistics facility footprint, as supply chain snags and an increase in e-commerce sales have pressured the industry. The Company’s supply chain includes a mix of 15 regional DCs (moves products from vendors to stores or directly to customers) and 15 flatbed DCs (distributes products that require special handling like lumber, siding and ladders), each serving approximately 115 stores. Lowe’s purchased about 65% of its merchandise, in dollars, shipped through its distribution network in FY21, with the remainder shipped directly from vendors. In FY21, the Company added six cross-dock delivery terminals for last-mile deliveries and four bulk DCs to handle large products like appliances. Lowe’s also uses its five coastal holding facilities (which opened in 4Q21) to carry imported products upstream, allowing it to secure products from vendors earlier and deliver them to DCs and stores as needed. Coastal holding facilities range from 420,000 square feet to 750,000 square feet. Click here to request a sample list of future openings.
Tractor Supply’s 1Q22 results were impressive considering the Company was lapping the stimulus from last year and a 38% comp in 1Q21. Tractor Supply posted an 8.3% sales increase with a 5.2% comp. Like most of Creditntell’s monitored retailers, average ticket drove the comp, growing 6.7%, while transactions fell 1.4%. January and February were the best months of the quarter, as the Company reports the spring season got off to a slow start in March. Winter seasonal was a strong performer, and the CUE segment (consumables, usables, edibles) grew at 3x the overall sales rate. The Company did not open any new Tractor Supply stores during the quarter, meaning they will have to hit their target of 80 new stores in just three-quarters of the year. The Orscheln Farms acquisition has not been completed and remains in limbo as the Company deals with the FTC. Click here to request a sample list of future openings.
Luxury home brand Brooklinen is looking to triple its brick-and-mortar retail presence, adding four stores in new markets in 2022, with plans to reach 25 to 30 locations by the end of 2024. The four new stores will open in Los Angeles, CA; Philadelphia, PA; Portland, OR; and San Francisco, CA between now and the end of June. The expansion was inspired by 227% year-over-year sales growth at its stores in Brooklyn and Manhattan. The Company is also planning to open a warehouse in Canada; it already does business in that country but is looking to reduce shipping costs and expedite delivery. Finally, Brooklinen also plans to release a hospitality-grade collection for hotels and bed and breakfasts.
On April 19, Buc-ee’s opened its first travel center in Kentucky located in Richmond. The 53,000 square-foot convenience store offers 120 fuel positions as well as an expanded array of foodservice offerings. Buc-ee’s, which mostly operates in Texas with 35 stores, began its multi-state expansion in 2019. It has plans to open stores in South Carolina, Tennessee, Alabama, Colorado, Mississippi and Missouri.
Wawa announced it will expand the number of its convenience stores that sell alcohol in Pennsylvania with the addition of up to 10 new beer-selling stores this year. Wawa only operates a handful of stores with liquor licenses in the state, compared to Virginia and Florida, where all of its locations sell beer. Pennsylvania requires c-stores to purchase a restaurant liquor license and then provide seating; prices for these licenses start at approximately $100,000, vary significantly from county to county, and can go for several times higher, with the cost also driven up by area retailers looking to sell alcohol. In other markets, liquor licenses cost hundreds of dollars. CEO Chris Gheysens indicated in an interview that the new beer-selling Wawa stores are part of a strategy that is “just beyond test” in maturity. Click here to request a sample list of future openings.
UFCW 8-Golden State has arrived at tentative contract agreements covering about 8,000 members at Save Mart banner locations throughout Southern, Central and Northern California. The agreements include substantial wage increases, maintained-successor language regarding the recent change in ownership (Save Mart was acquired by Kingswood Capital Management LP in March), medical benefit improvements, better wage progressions, and the creation of an additional Lifetime Income Security Accrual Account (LISA) retirement plan for current and future members. The tentative agreements will be submitted to members for voting in the coming weeks.
Meanwhile, Stater Bros, Kroger’s Ralphs, and Albertsons Cos.’ namesake, Vons and Pavilions banners have all ratified new three-year contracts in California.
This Special Analysis includes a breakdown of M&A activity across all retail sectors over the past year. Click here to request this report.
Last week, private equity firm Apollo announced that funds managed by its affiliates acquired family-owned specialty grocer Tony’s Fresh Market. Financial terms of the deal were not disclosed. Tony’s currently operates 18 stores across the Chicago metro area and has several more in development. The founding family will partner with Apollo in management roles and as shareholders. Apollo’s previous and current grocery investment portfolio includes The Fresh Market, Sprouts Farmers Market, Smart & Final and Albertsons.
Natural Grocers by Vitamin Cottage is entering a new state this summer with a new opening in South Dakota in Sioux Falls, as well as its fifth unit in Idaho in McCall. The Company already operates stores in Boise, Idaho Falls, Coeur d’Alene and Hailey. Natural Grocers operates more than 162 stores in 20 states. Click here to request a sample list of future openings.
Walmart announced the opening of its $220 million import distribution center in Ridgeville, SC. The new DC will store and sort imported goods that arrive through the nearby Port of Charleston, the eighth largest port in the U.S., for delivery to 850 regional Walmart and Sam’s Club locations across the Southeast. According to the Company, once fully operational, the facility is expected to increase local port volumes by approximately 5%.
Metro’s sales remained strong in 2Q22, rising 1.9%, year to year. Food same-store sales were up 0.8% versus the same quarter last year and were up 11.5% for the first eight weeks of 2Q22 compared to FY20 (pre-COVID period). Online food sales increased 6% versus last year (up 240% in 2021). Food basket inflation was slightly below 5% (3.5% in the previous quarter). During 1H22, the Company opened four stores, completed major expansions and renovations of six stores and relocated one store for a net increase of 115,000 square feet or 0.5%.
On April 22, Casey’s opened its first convenience store without gas pumps in Des Moines, IA. The 3,380 square-foot store focuses on food, beverages and typical convenience items and could serve as a new prototype if successful. Click here to request a sample list of future openings.
On April 22, Foot Locker banner Champs Sports launched its new Homefield retail concept in Pembroke Pines, FL, a concept “designed to close the gap between sport performance, wellness and sportswear.” The more than 35,000 square-foot store is the largest of any Foot Locker subsidiary and houses a full-sized basketball court, a multisport court, a digital virtual reality (VR) system, a performance-footwear customization station, and a gaming lounge. The store sells apparel, sneakers, equipment, and nutritional and recovery products. Click here to request a sample list of future openings.
Bass Pro Shops announced plans to open a Family Health Center adjacent to its headquarters in Springfield, MO this fall, which will provide health care services for its employees and their families in the region. The center will offer primary care, preventative wellness, and treatment of acute and chronic conditions, with a drive-thru for prescription pickup. Bass Pro is partnering with Premise Health, which runs more than 600 clinics in 44 states. Click here to request a sample list of future openings.
According to a filing late last week. U.S. labor officials are petitioning a federal court to force Starbucks to bring back activist employees who they say were removed for their union campaigning. The filing marks the latest in what’s expected to be a lengthy and expensive legal battle between a union campaign and the Company. Since August, more than 200 Starbucks locations have filed paperwork to unionize under Workers United, an affiliate of the Service Employees International Union. So far, 24 stores have voted to unionize, with only two locations so far voting against.
Shoe Carnival’s sales surged in FY21, as high demand amid the return of in-store shopping drove revenues to record highs. 4Q sales rose 23.4% to $313.4 million, including an approximate 650 bps boost from the recently acquired Shoe Station banner. The acquisition of Shoe Station in December provides a second growth banner and plays into the Company’s plan to turn the corner on the pandemic and shift back into store expansion. Having closed a number of underperforming stores over the past few years, Shoe Carnival now expects to add 10 new stores in FY22, before accelerating to 20 and 25 new stores in FY23 and FY24, respectively. It also plans to remodel 100 stores by the end of FY22 and complete modernizations at all stores by the end of FY24.
Fast Retailing, parent of UNIQLO, revealed major global expansion plans that include the opening of at least 300 new stores in its FY23 ending in July 2023. CEO of UNIQLO USA Daisuke Tsukagoshi said that to take advantage of the booming North America market, the Company plans 30 new stores per year and to increase its total count to 200 within five years in the region. Management commented, “We are pursuing more determined new store openings on a global scale. We opened the UNIQLO Rivoli Store in Paris in September 2021 and our first global flagship store in Beijing, the UNIQLO Beijing Sanlitun Store, in November 2021. We are set to open our new UNIQLO Regent Street Store in London in April 2022. We intend to showcase the UNIQLO brand to the world from prime locations in major global cities.”
For the six months ended in February 2022, revenues for the UNIQLO International business increased 13.7% year over year, and operating profit jumped 49.7% annually, with the North America and Europe markets comprising roughly 20% of system-wide operating profit. As of February 28, 2022, Fast Retailing operated 3,528 stores, including 2,347 UNIQLO branded — 802 UNIQLO Japan shops and 1,545 UNIQLO International. The Company anticipates expanding to 3,595 stores by the end of August, comprised of 810 UNIQLO Japan stores (including franchise stores), 1,607 UNIQLO International units, 452 GU stores and 726 Global Brands stores.
A published report claims Authentic Brands Group (ABG) is considering a bid to acquire London-based fashion brand Ted Baker, which operates nearly 400 stores. It is unclear if ABG, with a portfolio that includes Forever 21, Barneys New York, JCPenney, and Reebok, has submitted a formal offer for Ted Baker, but it is reportedly among the interested parties. ABG filed for an IPO in July but delayed plans to go public after receiving new investments from CVC Capital Partners and HPS Investment Partners in November.
Japanese grocer Mitsuwa Marketplace signed a 10-year lease in Northridge, CA to open its 12th location in the North San Fernando Valley, a 9,600 square-foot store expected to open this fall. The new unit will feature food courts, fast food stalls, bakeries, matcha shops, sushi and sashimi, and a full line of Japanese groceries. Founded in 1998 and based in Torrance, CA, the Company operates stores in California, Illinois, Texas, Hawaii and New Jersey.
ShopRite operator Zallie-Somerset Inc. will break ground on the newest and one of the largest stores in New Jersey’s Gloucester County on April 26. The future ShopRite will be more than 75,000 square feet and is slated to open in March 2023. Zallie-Somerset currently owns and operates 11 ShopRite stores, 10 in South Jersey and one in Philadelphia.
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