Open-Air Box

Grocery Store Growth /  by Duane Stiller

Aldi now has over 2,000 US stores, which is the third most grocery stores in the US. Amazon's Whole Foods has 500 stores. Now, Amazon is rolling out Amazon Fresh which is expected to be a game changer for the US grocery marketplace. The largest retailer Walmart has basically stopped adding US stores and is instead focusing is domestic expansion efforts on its e-commerce platform for delivery and curbside pick up. Please watch this two minute video of Walmart's US expansion to get an idea of just how fast Aldi and Amazon can grow their US base - it will blow your mind. New cool things are always coming. There is no retail apocalypse. Simba beats Scar!

Texas Box Openings & Closings: Nov-Dec 2020 /  by Mauricio Abela

Openings: 46 stores

Ace Hardware Corporation: 1
Aldi: 1
Cinemark USA: 1
Citi Trends: 3
Crunch Fitness: 1
CVS: 3
Dollar General: 9
Dollar Tree: 3
Family Dollar Stores: 3
Five Below: 2
Floor and Decor: 1
Harbor Freight Tools USA: 5
Office Depot: 4
Old Navy: 1
Ollie's Bargain Outlet: 2
Pet Supplies Plus Inc.: 2
Petco: 1
Planet Fitness: 1
Ross: 2

Updated: 2/9/2021

Closings: 49 stores

24 Hour Fitness: 1
AMC: 1
Barnes & Noble: 1
Bealls Department Store (Stage): 5
Bed Bath & Beyond: 6
Cost Plus World Market: 3
Dollar General: 2
JC Penney: 1
Office Depot: 1
Office Max: 5
Powerhouse Gym: 1
Ross: 1
Staples: 1

The Retail Circle of Life /  by Mauricio Abela

Risk analysis: what if every financially weak big box tenant in the US went out of business? Big box retailers are 80% of the US retail platform. The way they go portends the state of the whole system. Most markets in the US are severed by about 100 big box brands – everything from Walmart to Walgreens.

Today, in each major US market, about 20 of the 100 big box companies are suffering financial stress. Many had problems well before COVID. Back in April of 2020, I realized that these weak tenants accounted for only about 6% of US retail space and, more surprisingly, they accounted for only 3% of the sales. If all the weak box retailers shut down, the remaining 80 retailers could easily absorb their sales.

About two thirds of these weak firms have already filed bankruptcy and most of them have reemerged with a fresh start and only a handful have been liquidated. A few others, like AMC Theaters have raised capital without bankruptcy. The system is very resilient. There is no retail apocalypse. It’s the circle of life – Simba defeats Scar.

Florida Box Openings & Closings: Nov-Dec 2020 /  by Duane Stiller

Openings: 49 stores

Ace Hardware: 5
Aldi: 5
Crown Wine & Spirits: 1
Crunch Fitness: 1
CVS: 1
Dollar General: 8
Dollar Tree: 4
Family Dollar Stores: 1
Floor and Decor: 1
Esporta Fitness: 3
Harbor Freight Tools USA: 1
Harris Teeter: 1
Office Depot: 2
Old Navy: 1
Pet Supplies Plus: 1
Planet Fitness: 4
Publix: 6
Sprouts Farmers Market: 2
True Value: 1

Updated: 2/9/2021

Closings: 32 stores

ABC Fine Wine & Spirits: 1
Bed Bath & Beyond: 4
Family Dolla Stores: 1
Habitat for Humanity: 1
JC Penny: 8
La Fitness: 4
Office Depot: 1
Office Max: 3
Old Time Pottery: 1
Publix: 4
Save-A-Lot: 4

Flat Line for Open-Air Big Box Openings & Closings /  by Duane Stiller

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At the end of 2020, these big box users had nearly 11,000 Florida locations totaling about 320M square feet.

 Woolbright tracks the 105 brands that operate stores containing over 10,000 SF and with 15 or more locations in Florida. At the end of 2020, these big box users had nearly 11,000 Florida locations totaling about 320M square feet. The big boxes occupy 80% of the open-air GLA and as it goes for them, it goes for retail.

In 2020, the Florida the big box inventory remained unchanged with 347 openings and 341 closings. No change means there was no retail apocalypse in 2020. Sure, there were some big losers: Pier 1 closed 72 locations, Earth Fare closed 14, Lucky’s closed 21 and SteinMart closed 44; combined these groups, that liquidated their chains, shuttered about 3.0M square feet or just less than 1% of the box space in Florida. 

But all the losses from the Florida’s big box closings were offset by new big box openings. Most of the 105 brands opened just a few stores each; however, there were a handful of companies that dominated the growth in 2020. Those standouts added at least 200,000 square feet of net space to their store network as shown in the table below.

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Surprisingly, several notable retailers, that have historically driven the growth with new openings, did not open a single store in 2020 in Florida, those include Walmart, Costco, Home Depot, Lowes, Kohl’s, Marshall’s, and TJ Maxx. There will be more closings in 2021. One notable area to watch in 2021 is the merger of Staples and Office Depot which could result in a third of their stores closing. On the other hand, closings will be offset when the second richest guy and the 4th richest family in the world will open dozens of new grocery stores over the next few years in Florida as the grocery apocalypse begins in earnest, but that story is for another post.

Inequality in Open-air Retail Centers /  by Duane Stiller

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Open-air centers today are bifurcated into two worlds: centers with vacant boxes and those without any. The centers with one or more vacant boxes account for 70% of all the vacant space and they are on average 25% vacant. These are the problem centers. On the other hand, those without a vacant box are only 3-4% vacant, on average. Therefore, only about 15% of the centers are suffering right now and the remaining 85% are doing fine. Thus, inequality even plagues the land of open-air centers. To recover owners must find users to fill their empty boxes. 

In my next post, I’ll discuss how many boxes opened and closed during 2020 and what lies ahead for centers with vacant boxes and whether open-air centers will drown in vacancy during 2021.