One of the overriding themes at ICSC RECon 2010 was that retailers were becoming increasingly active in looking for strategic opportunities to expand.
Those observations mesh with conclusions in Colliers International’s Spring 2010 Retail Highlights report.
According to the report, “Colliers has seen a huge increase in planned new retail stores in just the past three months. Though 2010 expansion will continue to be dominated by discounters and off-price retailers, in the past few months we have also seen mid-price chains up their growth plans.”
Dollar stores are the fastest growing segment, according to Colliers. For example, Dollar General has plans for 600 new stores in 2010, while Dollar Tree/Deal$ has 235 stores planned. Family Dollar is hoping to open as many as 200 units. In aggregate, we will likely see dollar store chains add as many as 1,500 new stores in 2010.
The brokerage firm compiled data on the most active retailers in 41 metropolitan areas and found that discount retailers (21 percent) and supermarkets (18 percent) were the most active in looking for new sites. The number for discount retailers was about the same as 2009 (20 percent) while supermarkets and other food stores showed a jump in activity (11 percent). In contrast, drug stores were the second most active segment in 2009 (20 percent), but had fallen to just 9 percent in 2010 to date.
Another active segment is the food service area. Restaurants accounted for 13 percent of activity, fast food chains for 11 percent and quick casual restaurants for 3 percent. Some of this activity is from national players and franchises, but there is also a core of local and regional chains that is rapidly expanding.
“The one area where Colliers sees mom-and-pop activity is in the fast food/fast casual franchise restaurant arena,” according to the report. “Lower priced restaurant chains are also now back, expanding thanks to well-capitalized private investment groups looking to open multiple units at a time when rents are cheap. Though players like Buffalo Wild Wings, Five Guys Burgers and Fries and Smashburger may be getting the most media attention, there are dozens of chains with plans for 50 or more new stores in the coming year.”
A battle is also playing out in the supermarket and convenience store arena. Target is opening 350 of its P-Fresh grocery concepts in 2010. Convenience store chain 7-Eleven is opening 600 stores in the next two years and is expanding its fresh food offerings.
In addition, drug store chain Walgreen’s is devoting more store space to grocery sections and fresh foods. “With the company’s recent acquisition of the Duane Reade chain in New York, Walgreen’s has already begun testing this concept. If the results are positive, Walgreen’s may begin rolling out this new offering to all 7,150+ of their stores by 2011,” according to Colliers’ report.