February 23, 2022
Amazon will face a union election at one of its warehouses on New York’s Staten Island next month, Workers at the Staten Island warehouse, known as JFK8, will cast their ballots between March 25 and 30, according to the Amazon Labor Union, a labor group that is seeking to represent JFK8 workers. Amazon says that it remains skeptical that there are a sufficient number of legitimate signatures to support this election petition. However, since the NLRB has decided the election will proceed, it wants its employees to have their voices heard as soon as possible.
Travel retailer WHSmith announced that Amazon’s Just Walk Out technology that allows customers to bypass the checkout line to pay for items is now available at its NYC location in LaGuardia Airport. Customers traveling out of the airport's new terminal can tap a payment card upon entry to the WHSmith and leave without stopping at the cash register. The payment card will be charged for the items purchased.
Amazon’s Whole Foods Market is expanding its footprint in the San Francisco, CA Bay Area. The Company will open a 64,740 square-foot flagship on March 10. It will be Whole Foods’ ninth location in the San Francisco area. It follows the January opening of a nearby 50,780 square-foot outpostatStonestown Galleria Mall.
Kohl’s announced that 400 stores across 36 states that will be adding a Sephora shop in 2022. The addition of Sephora shops at these stores brings the Sephora shop-in-shop total to 600. The Company remains on track to meet its 850 store goal by 2023. Click here to request a sample list of future openings.
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.
A Family Dollar facility in West Memphis, AR found hundreds of rodents inside after a consumer complaint, which prompted an investigation into the facility that concluded earlier this month and forced the Company to cease distribution from the facility. Family Dollar also issued a news release last week that listed 404 stores in Alabama, Arkansas, Louisiana, Mississippi, Missouri, and Tennessee that may have sold products from the contaminated facility. It had temporarily closed those stores as it works with the FDA to begin a voluntary recall of affected products. The recall concerns purchased made in January and February impact products such as human food, pet food, dietary supplements, cosmetics, medical devices, and over-the-counter medications. The Company is working to reopen these stores as soon as possible. Click here to request a list of future openings.
As we have been reporting, soon after its emergence from Chapter 11 in December 2020, Tailored Brands faced significant pandemic headwinds which pushed sales down 50% to 60% in FY20, with sales continuing to underperform in the first two months of 2021. Facing another liquidity crunch, in March 2021 the Company was forced to raise an additional $75 million in new debt financing from Silver Point Capital, its largest equity owner. However, reports now indicate that the Company experienced improved operating trends throughout the rest of FY21 (ended January 2022), as revenue benefited from reduced COVID related restrictions. Click here for more info.
The Cheesecake Factory’s 4Q21 revenues rose 40.1% to $776.7 million, driven by comp growth of 33.8% (relative to 4Q19, comps increased 7.7%). 1Q22 (QTD through February 15) comparable sales increased approximately 24.3% year-over-year, supported by 30% off-premise sales mix. Operating income was $979 million, compared to a loss of $38.8 million last year.
During 4Q21, four new restaurants opened, including The Cheesecake Factory in Huntsville, AL, North Italia in Orlando and a Blanco and a Culinary Dropout in Denver, meeting the Company’s target of opening 14 new restaurants across its concepts during FY21. Internationally a third The Cheesecake Factory opened in Shanghai under a licensing agreement. The Company said it hopes to accelerate unit growth in 2022, projecting 17 – 19 new openings, mostly in the second half of the year, including as many as five Cheesecake Factory units, five to seven North Italia locations, and as many as seven other Fox Restaurant Concept restaurants, including three to four Flower Childs.
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.
At Home Group opened five new stores this month, in Poughkeepsie, NY; Ledgewood, NJ; Dallas, X; Tustin, CA; and Rochester, MN. The Company plans to open a unit in Matthews, NC before the end of the month. The openings are part of the Company’s plans to open at least 25 locations this year, and brings its current store count to 241. The chain believes it has the long-term potential to reach 600+ stores. Locations average just over 100,000 square feet and feature up to 50,000 home décor items. At Home was acquired last summer by private-equity firm Hellman & Friedman in an all-cash transaction valued at $2.80 billion. Click here to request a list of future openings.
Shake Shack reported 29% sales growth in 4Q21 to $203.3 million and 41.5% growth to $739.9 million for the full year, which included a 53rd week. 4Q21 comparable store sales increased 20.8%, and notably on a two-year basis rose 2.2% compared to pre-COVID 4Q19, versus a 7.3% drop in 3Q21. Part of the improved results was due to increased traffic at the Company’s stores in New York City and several mall locations during the holiday shopping season, though both categories continue to underperform their suburban peers. Digital sales remain a substantial portion of total sales at 42% in 4Q. Looking ahead to FY22, Shake Shack expects to build on the net 35 new stores opened in FY21 with another 40 to 50 new Company-owned locations, as well as 20 to 25 new licensed stores. Management noted that the rise in omicron COVID cases in late 2021 caused a slight sales setback in early 2022, but volumes have recovered thus far in February. Click here to request a list of future openings.
Macy’s posted a near 28% increase in 4Q21 comps, aided by strong digital sales, which helped pushed quarterly EBITDA up 58%. FY21 digital sales grew 14% and represented 35% of net sales, a 10-percentage point improvement over 2019. Management also announced it completed its business review and it would not go through with a separation of its e-commerce business, despite activist pressure. CEO Jeff Gennette commented, “We are more confident in our path forward as one integrated company,” while the Company is now pursuing several initiatives from the review including accelerating the Polaris initiatives that span digital, brand partners, private label, marketing and loyalty and the expansion of offmall, small-format Market by Macy’s and Bloomie’s stores. For FY22, the Company expects sales to be relatively flat, with EBITDA margin falling approximately 200 bps to a range of 11% to 11.5%. Click here to request a sample list of recent and future openings and closings.
Last week, QuikTrip opened its newest remote travel center in Cottondale, AL. The site is the first QT store in the state (the Company announced plans to expand into Alabama in 2020) and one of the Company’s first few remote travel centers. QT's remote travel center model was designed for highly trafficked areas of the country that are within reasonable proximity to a QT distribution center for access to fresh food. The Cottondale store features a larger lot and a more spacious store (about 8,000 square feet) than standard QT locations, with room to service 20 cars for gas.
The Home Depot turned in a record year with FY21 revenue surpassing $150 billion for the first time. 4Q was also impressive with sales and comps up 11% and 8%, respectively, despite lapping 24% sales and comp growth in 4Q20. Comps were propelled by average ticket growth, which was helped by inflation, as traffic declined. Inflation heavily impacted lumber, building materials, and copper. Pro sales outpaced the DIY market. Digital sales were up 6% for the quarter and 9% for the full year. The Company opened seven new stores during FY21 and added 14 stores through a small acquisition. Click here to request a sample list of future closings.
Kroger and Kitchen United MIX have announced the opening of a kitchen center in Houston, TX that enables customers to place an order digitally and then pick up their meal onsite or have it delivered. This Kitchen United MIX location offers customer favorites from more than 10 independently operated local and national restaurant brands. It follows the opening of the kitchen center in a Westwood, CA Ralphs store.
Walgreens Boots Alliance and VillageMD today announced plans to open five new Village Medical at Walgreens coordinated primary care practices in the Jacksonville, FL area through summer 2022, with the first opening on February 15. These openings represent expansion into the third major market in Florida, following Orlando and Tampa. Click here to request a sample list of recent and future openings and closings.
Hy-Vee recently opened a new store in Springfield, MO. The 93,400 square-foot store will offer a new experience for customers with a large, open food hall for fast, casual dining. Additional in-store offerings include DSW shoes and accessories, Joe Fresh clothing, a Pair Eyewear kiosk, a beauty department, and an expanded Candy Shoppe department. This location also has a Hy-Vee Wine and Spirits department. Click here to request a sample list of recent and future openings and closings.
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.
Ace Hardware’s 4Q21 sales inched up 0.7% to $2.07 billion. Total wholesale revenue increased 0.7% to $1.90 billion, with increases across the outdoor power equipment, holiday, and plumbing departments. Total retail revenue increased 0.6% to $204.9 million, driven by new stores (Westlake and Great Lakes Ace Hardware together operated 210 stores at quarter end, up from 202 stores in the prior year period). Click here to request a list of future openings.
Last Thursday, Starbucks Workers United's campaign reached 102 stores in 26 states. That momentum, which accelerated in December in New York, continues despite Starbucks' efforts to stall votes. Last Wednesday, the National Labor Relations Board postponed a scheduled union vote count at a Mesa, AZ, Starbucks. The NLRB was unable to reach a decision on Starbucks' request for review of the NLRB regional director's election order. Starbucks has argued that workers shouldn't vote on a store-by-store basis, but instead vote by regional markets. Click here to request a sample list of future openings.
Cracker Barrel reported 2Q22 revenue growth of 27.3% to $862.3 million, and an increase of 6.2% compared to 2Q19. Comparable store restaurant and retail sales rose 25.9% and 32.5%, respectively, compared to 2Q21; and rose 1.9% and 13.7%, respectively, compared to 2Q19.
Looking ahead to FY22, the Company expects that headwinds from elevated COVID case counts early in the quarter, as well as seasonally lower demand patterns, will result in 3Q22 revenue of $800 million. For the second half of FY22, the Company expects capex of $60 million, and the opening of two new Cracker Barrel locations and between 9 and 11 new Maple Street Biscuit Company locations, in addition to the one Maple Street Biscuit Company location that opened in 2Q22. Click here to request a sample list of future openings.
Dillard's 4Q21 retail sales increased 33.4%, with comparable sales up 37%, year to year, or 12% compared to 4Q19. 4Q21 retail gross margin (which excludes CDI) improved significantly to 41.4% compared to 31.9% for 4Q20. Compared to 4Q19, retail gross margin improved 1116 basis points from 30.2%. Dillard's will open a new 160,000 square foot location at University Place in Orem, UT in mid-March 2022, replacing Provo Towne Centre in the same market (200,000 square feet). The Company will replace a leased building at Westgate Mall in Amarillo, TX with a newly remodeled owned facility in the fall of 2022.
Camping World inked a deal to acquire Bowling RVs in Ottumwa, IA. The acquisition is anticipated to close next month and will be the Company’s fourth location in the state. The location will transition to the Camping World brand upon closing. Camping World operates over 185 locations in 40 states.
In other news, Camping World partnered with Authentic Brands Group to launch a new line of towable and motorized RVs by Eddie Bauer. In addition, Camping World secured the rights to market a variety of Eddie Bauer branded items via its stores and websites. Product assortment includes outdoor gear, apparel, outerwear, camping accessories, outdoor furniture, bedding, and pet accessories. The RV line and product launch is expected to occur during 3Q22.
Buc-ee's is opening its first store outside the South located in Johnstown, CO. It is expected to open in 2024. While the specific square footage of the Johnstown store has yet to be revealed, Buc-ee’s locations average 50,000 – 70,000 square feet. Buc-ee’s locations are often more than 20 times the size of a typical convenience store. Buc-ee’s opened its first Florida store in February 2021 and later in the year announced plans to add Kentucky, Tennessee and Mississippi to its footprint. Buc-ee's currently operates more than 40 locations in Alabama, Florida, Georgia, and Texas.
Last week, two former Tops Friendly Markets in Watertown, NY opened under new names as part of the Tops and Price Chopper/Market 32 merger. The stores reopened as Piggly Wiggly (its first store in New York) and Grand Union.
Restaurant Brands International’s Tim Horton’s is slated to open its first location in Houston, TX this summer, in line with its strategy to move further south for its next phase of U.S. expansion. Most of Tim Horton’s current U.S. locations are concentrated in states that share a border with Canada, including New York, Michigan and Ohio. The next phase of U.S. expansion will focus on markets like Texas and Florida. Click here to request a sample list of future Tim Horton's U.S. openings.
Chuy’s 4Q revenue rose 25.4% to $98.7 million, driven by growth in customer traffic as the Company continued to relax indoor dining capacity restrictions, as well as $3.6 million of incremental revenue from new restaurants opened during FY21. For the fourth quarter of 2021, off-premise sales were approximately 28% of total revenue compared to approximately 33% in the same period last year. Comparable restaurant sales increased 20.8% as compared to 4Q20 and decreased 0.7% as compared to 4Q19, negatively impacted by 90 bps due to the timing of Christmas.
Chuy’s expects to open between five and eight restaurants and spend about $25 million to $40 million on capex over the course of 2022.
Cub Foods opened its 30th wine, beer and liquor store in Minnesota. The 8,600 square-foot Wine & Spirits store, located in Maple Grove, houses a sit-and-sip bar, a “build your own six-pack” beer wall and more than 1,400 wines, including many “luxury” varieties. Cub opened its first Wine & Spirits store in its hometown of Stillwater in late 2015.
Advance Auto Parts’ 4Q21 (ended January 1, 2022) sales increased 1.3% to $2.40 billion, and comps were up 8.2%. Adjusted gross margin increased 145 bps largely due to strategic pricing and private label expansion, partially offset by inflationary costs. Adjusted operating income rose 9.3% to $176.8 million. For FY22, the Company expects net sales to range from $11.20 billion to $11.50 billion, with comps rising between 1% and 3%. Advance Auto also expects to open between 135 and 150 new stores during FY22.
Bloomin’ Brands’ 4Q21 revenues rose 28.9% to $1.05 billion, primarily driven by higher comparable restaurant sales from recovery of in-restaurant dining from the significantly reduced levels in 2020 after the onset of the pandemic and strong retention of off-premises sales; higher franchise revenues; and the net impact of restaurant openings and closures. Combined U.S. comps rose 26.5% vs. 2020 and 5.3% vs. 2019. Comps vs. 2019 rose 2.5% at Outback Steakhouse, 10.3% at Carrabba’s Italian Grill, 1.3% at Bonefish Grill, and 20.3% at Fleming’s Prime Steakhouse & Wine Bar. Internationally, Outback Steakhouse comps rose 26.5% vs. 2020 and 8.5% vs 2019.
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.
