Happy Birthday Publix /  by Guest User

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Happy Birthday Publix you are almost 100! We are often excited by the new things in life. But perhaps we're better off to consider the things that have endured well past any reasonable expectation. Last year, in September, Publix Supermarkets celebrated their 90th anniversary. In just 10 years, Publix will be one of the few companies to celebrate 100 years in business. The first Publix store did just $120,000 in sales in 1930.

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Today, the company does over $40 billion in sales and has over 1,250 stores. I remember as a kid meeting George Jenkins, Publix's founder, at a store grand opening and was so impressed by his energy and accomplishments. Every new store was a moment to celebrate for the founder. Are you building a company that will last for 100 years? If so, there are many valuable lessons to learn from studying Publix. I recommend finding a copy of the book that was published to celebrate Publixes 75th anniversary which lays out the history of the company and studying it. It'll make you a better businessperson.

Commercial Real Estate Rental Streams /  by Guest User

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Every once and awhile you see something that leaves you speechless. This chart is from a report just issued by Eastdil Secured and it hit me like a gut punch. I couldn't believe that I had missed something that was so obvious. All of the major classes of commercial real estate over the last 15 years have grown their rental streams by 3-4% annually. But there is one glaring exception, and that is retail properties which did not have any rental growth over the last 15 years. Now, during that period, retail sales grew by 3.75% per year, and yet, retail is still at the levels of 2005. That is shocking. What do you think about this? Please post a comment.

Walmart vs Amazon /  by Duane Stiller

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My favorite players in the chess game of the retail marketplace is number 1 ranked Walmart, the grandmaster, vs up-and-comer "Beth Harmon", Amazon. Watching this game play out is better than watching the Queen's Gambit on Netflix. Notice how Walmart's growth has followed the classic "S-Curve" and Amazon is still in their hockey stick explosive growth phase.

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Who knows how this one ends?

Top 10 US Retailers /  by Duane Stiller

In the last 30 years, the forces of creative destruction blasted away on the top 10 retail performers. Today, only 4 remain on the top 10 list and the other 6 are gone forever. Was that 30 year struggle an apocalypse? Not at all, it's just the innovative cycle that makes America the strongest nation in the world.

Every 15 years, half of the S&P 500 companies are dropped from the list. The same is true for the top 10 US retailers. Which 5 companies will get dropped from this list by 2035? I wish I knew, but whatever happens we will all be much better off.

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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!

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

South includes: AL, GA, NC, SC, TN, VA

Openings: 118 stores

Ace Hardware Corporation: 3
Aldi: 8
American Freight: 8
Ashley Furniture: 2
Badcock Furniture: 1
Bealls Outlet: 1
Citi Trends: 1
David's Bridal: 1
Dollar General: 35
Dollar Tree: 4
Electronic Express: 1
Family Dollar Stores: 9
Habitat for Humanity: 2
Harbor Freight Tools USA: 3
Hobby Lobby: 1
Lidl: 2
Lowe's Foods: 3
Office Depot: 3
Office Max: 1
Ollie's Bargain Outlet: 2
Party City: 1
Pet Supplies Plus Inc.: 3
Piggly Wiggly: 1
Planet Fitness: 6
Publix: 7
Save-A-Lot: 2
True Value Company: 3
Walgreens: 1
Wegmans Food Markets: 1
Whole Foods: 2

Updated: 2/9/2021

Closings: 100 stores

Ace Hardware Corporation: 1
AMC: 1
American Freight: 3
Ashley Furniture: 1
Bed Bath & Beyond: 7
buybuy Baby: 1
Cost Plus World Market: 2
CVS: 8
David's Bridal: 1
Dick's Sporting Goods: 2
Dollar General: 9
Dollar Tree: 1
Ethan Allen: 1
Family Dollar Stores: 7
Golf Galaxy: 1
Goodwill: 1
Habitat for Humanity: 3
Harris Teeter: 1
JC Penney: 28
La-Z-Boy Incorporated: 1
Office Depot: 3
Office Max: 3
Pet Supplies Plus Inc.: 1
Planet Fitness: 1
Regal Cinemas: 1
Ross: 1
True Value Company: 4
Walgreens: 6

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

You Are Never Too Old /  by Mauricio Abela

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You are never too old. At 43, Tom Brady commandingly won the Super Bowl. Next to him in this photo is Ray Kroc, the founder of McDonalds. Ray quit his job as a Dixie Cup salesman at age of 52 to open his first McDonalds. Ray’s story is told in one of my favorite books: Grinding It Out.

Time and time again, I am amazed at the fantastic things people accomplish in the latter half of their careers – it’s never to late, just go for it.

Why did SEG/Winn Dixie cancel their IPO? /  by Mauricio Abela

First, it’s rare a company cancels and IPO. Second, Winn Dixie matters – they have just over 400 stores and about $10B in sales. Now, let’s say you are offered to buy or lease a Winn Dixie anchored shopping center. Clearly, you would want to know the future prospects of Winn Dixie. Is there a sale or merger in the works? Is the company in trouble? Or was the timing just bad?

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US Retail Growth /  by Mauricio Abela

US retail sales grow occurs at a steady rate of 3.75% annually. Half the growth is from inflation and the balance is in volume. Over the next 10 years, all of the volume gains will be from the e-commerce component which today, is 15% of the total. The brick and mortar component will remain flat for the foreseeable future. Thus, the US retail system doesn’t need any new brick and mortar space until about 2030. At that time e-commerce will account for 30% of sales.

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That’s why Walmart stopped building new stores and made massive investments in their e-commerce platform.

Focus on the facts and do not follow your gut. Onward!

FL COVID Update /  by Mauricio Abela

As of today, Florida has vaccinated about 2.0M people, 85% of whom are over 65. At this rate, Florida is on track to vaccinate its 4-5 million residents over age 65 in the next 4-6 weeks. Since about 80% of the state’s deaths and hospitalizations have been for those over 65, this is a godsend. Thanks to all those who are working hard to make this happen! Our best days are just ahead.

Hat tip to @jhaskinscabrera on Twitter

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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.

Retail Bankruptcies /  by Duane Stiller

The 2020 retailer bankruptcies are not a bad sign. They allow the system to purge imbalances. The talk of “thousands of retailer bankruptcies portend an retail apocalypse” is nonsense in a system that just closed 50,000 stores with only 1-2% drop in occupancy. In 2020, the average open-air center lost just one small business. Of course, every closing is tragic at some level, but the system is strong and will soon recover.

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Only a small handful of national retailers are using bankruptcy. There are only about 100 companies occupying 15 or more boxes in Florida, they range from Walmart to Walgreens. All told, they have 80% of the GLA and 11,000 locations. About 10 of them need the help of bankruptcy to get a fresh start. About 5 are non-viable and need to liquidate, like Earth Fare, SteinMart, Pier 1 and Lucky’s Markets. In 2020, 24 Hour Fitness, Tuesday Morning, Guitar Center, JC Penny, Old Time Pottery, Men's Warehouse used chapter 11 to shed unprofitable stores, eliminate excess leverage and build liquidity. They are off again with a fresh start. It's the American way and it works. There is no retail apocalypse.

The auto parts industry is a good example of a 50/50 business /  by Duane Stiller

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What does retail look like when half the sales occur in the store and rest are on-line? The auto parts industry is a good example of a 50/50 business. As retailers embrace a multi-channel sales model the consumer benefits from better prices, greater convenience, and selection. Don’t panic, the world is changing, and it will be a much better place. There is no retail apocalypse.

How can we restart the US growth machine? /  by Duane Stiller

http://scottgrannis.blogspot.com/

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Unfortunately, economic growth is not about to set any long-term records. For 50 years, from 1966 through 2007, the US economy grew at an average annualized rate of about 3.1%—a great and dynamic expansion which saw the economy almost quintuple in size. Then came the Great Recession of 2008-09. Not only did the economy fail to recover to that long-term 3.1% trend in subsequent years—for the first time ever, following a recession—it went on to post only slightly more than 2.1% annual growth in the decade from 2009 through early 2019. It was the weakest economic expansion on record, and it looks set to continue for the foreseeable future.

Scott Grannis challenges us to think about the big problems - how can we restart the US growth machine?