Disney, Subway Expanding

Retail hasn't exactly fully rebounded, but proving industry chatter correct, some chains have formally announced major expansion programs. Disney Store and Subway sandwich shops, riding the wave of a successful 2010, have made such commitments.

Retail hasn’t exactly fully rebounded, but proving industry chatter correct, some chains have formally announced major expansion programs. Disney Store and Subway sandwich shops, riding the wave of a successful 2010, have made such commitments.

Improvement in the national retail market was not the main motivation behind Disney’s decision to open more than 40 of its new interactive concept stores this year. “Primarily, it’s based on the success of our new store design, which we began to roll out in June 2010,” Paul Gainer, senior vice president with Disney Store North America, told CPE. In less than a year, the new design has proven to be quite an attraction for shoppers.

But there’s more to it than the visual aspect. “It’s not only the quality of the design but it’s the quality of the merchandise,” he added. “The stores provide great family experiences.” Property owners are keen to add the entertainment retail shop to the lineup at their shopping centers. Disney Stores are typically approximately 4,500 square feet in size.

The timing is just right for inking long-term leases for coveted spaces. “Our expansion plan is also based on the opportunity we see in 2011 to secure premium locations across North America,” Gainer said. Retail accommodations north of the U.S. border are of particular interest to Disney Store, he noted, naming Canada as a growth market. “Four of our stores opening this year are in Canada. Two of those have already opened, and the response has been incredible.”

Subway is also on a major hunt for space to facilitate what the sandwich chain describes as an aggressive growth strategy for 2011. Currently, more than 2,000 franchisees are in need of square footage for shops that range from 100 to 5,000 square feet. But Subway’s space requirements are not always traditional. The company recently debuted a shop on a crane at a construction site at the World Trade Center in New York City. In addition to customary locations and the wholly unique spots–such as a church in upstate New York and a laundry/tanning salon in Wisconsin–Subway will increase its presence in colleges, sports arenas, airports and hospital.

Subway’s calculated growth spurt comes as no surprise to retail industry experts. According to a spring 2011 report by ChainLinks Retail Advisors, as was the case in 2010, fast-food and fast-casual restaurants will be at the forefront of expansion in the restaurant business this year, and chains like Subway “will continue to offer franchise deals that lower the barrier to entry for new franchisees, further boosting growth levels.”

Indeed, the sandwich chain has already had quite a busy year, having opened just under 700 new locations in 43 states across the United States, in eight provinces in Canada and in approximately 50 other countries, for a global total of 840,000 square feet of retail space.

Even the smaller fast-food chains are in on the expansion game. This week, Smashburger announced the addition of five new franchise partners, increasing the burger chain’s new franchise commitments to 63, for a total pipeline of 463 locations on target to open over the next several years.