Where Are All The Retailers Going?
- Apr 08, 2015
In the six months since Stan Johnson Co. released our last Tenant Expansion Report, we have seen most retailers announce their growth plans for 2015. Florida, California and the Midwest appear to be the strongest geographies for market expansion, with c-stores, discount retailers and grocery stores among others, all considering growth in these areas.
Also leading to new store growth is that some retailers are continuing to explore new formats or concepts, expanding their brands to target multiple consumer groups. E-commerce also continues to be a driver, with retailers from home improvement to sporting goods stores considering ways to tap into the ever-growing online marketplace.
Discount & Variety Stores
All eyes were on dollar stores last year as Dollar Tree acquired Family Dollar and the companies began announcing strategic store closures. With the start of 2015 however, the joint company plans to continue their expansion across the U.S. and Canada, although no official new store count has been released. Dollar General, in response to the merger between its competitors, has accelerated its expansion plan and will be focused on select states. Other discount retailers, like Costco, BJ’s Wholesale Club and Sam’s Club have announced new planned stores from three up to 50 locations, with e-commerce solutions a strong focus for Sam’s Club. Retailers including Target and Wal-Mart continue to focus on their small-format stores, and many areas especially in the urban core could see a new Wal-Mart Neighborhood Market or Target Express open this year.
After closing a number of under-performing locations in 2013, Rite Aid is back in growth-mode, focusing on the Midwest for targeted expansion. They are also concentrating on remodeling existing stores, and could refresh up to 450 locations this year. CVS is also focused on expansion in 2015, and plans to add 100 Minute Clinic concepts to existing stores this year. Walgreens expects their net store count increase to be between 60 and 120 stores this year, which is a noticeable decrease from past years. Of the big three drug stores though, Walgreens continues to lead the pack in number of locations, topping the list at more than 8,200 stores.
Many retailers in the casual dining world, including Applebee’s, Buffalo Wild Wings and Denny’s, have all announced significant international expansion plans this year. In the U.S. though, one of the fastest growing brands is Panera Bread, which has announced up to 115 new franchised locations before 2020. IHOP, along with its international expansion plan, has committed to 45 new locations annually over the next three years, and we may even see a new concept from IHOP this year in select markets. Among quick-serve restaurants, international growth seems to be a trend as well. Subway, Baskin Robbins and Carl’s Jr. are all focused on growing their footprints in markets like Japan and the Middle East, among others. In the U.S., brands like Chick-fil-a and Sonic Drive-In have planned approximately 25 new locations each this year. Stronger growth is anticipated from retailers like Starbucks, which could open up to 8,000 new stores globally in the next five years.
While this is just a snapshot of growth plans from a handful of retailers, it is clear that consumer demand for a variety of retail concepts is strengthening. If 2015 continues the trajectory that we have seen over the last few years, the retail industry should expect to see smaller-store-concept growth in urban markets, talks of additional mergers or acquisitions, expanding single-tenant retail presence in rural or untapped areas, and the disappearance of outdated brands or struggling store concepts.