From Barbara Farfan at the About.com retail industry blog (a good read and a good tweet, by the way) comes this heartening list of chains opening stores in 2009. Timely Demise suspects the openings are global, not national--there's virtually no way McDonald's is opening a thousand new stores in the U.S. this year--but it's nice to be reminded that for many people, the commerce engine chugs along. (Barbara also maintains a list of store closings that includes many of the items covered here in recent months.)
Recently in expansion Category
Good news! (We couldn't believe it either.) H&M, home of many trendy clothing items under $10, is taking advantage of current consumer tendencies to bargain shop. The world's third-largest fashion chain (based on revenue) just announced plans to open 225 new stores in 2009. Their first Beijing location opens today, one of five or six upcoming China posts. Other regions they're targeting for new stores include the Middle East and Japan—bringing their total number of venues to just under 2,000.
What does all this timely demising and store shuttering and bankrupty look like in the real world of strip-malled avenues? Northeast Ohio's retail spaces now have a 10.3% vacancy rate, an all-time high—and very little of that is due to new construction:
"There is no retail demand from large tenants who want new locations, and developers have problems getting loans for new projects," [CBRE broker Thomas] Flynn said. "Both the demand and supply side (of retail development) are stalled."
Few prospective tenants are around to eat into the vacant space. Only a handful of value-oriented stores, such as Family Dollar and Dollar General, as well as auto parts retailers, are expanding, CB said in its report.
The failure of a large chain like Circuit City means a competitive segment has an opening to be filled. After all, Best Buy can't be the only option for electronics retailing forever.
And so the market will slowly see companies begin to fill that void, starting in Connecticut, where PC. Richard & Son is expanding, opening a store in Norwalk. P.C. Richard is a 100-year old company that has grown slowly and locally in the New York metropolitan area. Now with 52 stores, it has the mass to continue its expansion into places where competition is light.
Expect to see more reports like this as the economy settles down and smaller companies decide to challenge the remaining national brands.
Some good news: discount retailer Dollar General is accelerating store openings following a robust fourth quarter. The company is America's largest discounter in terms of number of doors, with more than 8,300 outlets. Dollar General is planning a robust 450-door expansion plan for 2009 and is remodeling hundreds of existing stores.
Home Depot has decided to shut down EXPO, its high-end interior decoration chain. The company is closing all 34 stores as well as five YardBIRDS stores, a small-store format it launched earlier this decade. Home Depot CEO Frank Blake called EXPO "not a strong business" and a resource drain. Home Depot does have 12 store openings planned for 2009 in a modest recessionary expansion.
Well, at least one thing is consistent in the recession: the New York Yankees can still spend with abandon. With their signing of first baseman Mark Teixeira to an eight-year, $180 million contract, the Yanks now possess the top four highest-paid players in baseball, at a total commitment of more than $800 million.
Unlike, say, Goldman Sachs, these salaries don't get absorbed by management fees; the costs are, in part, passed to consumers. To that end, the Yankees--who recently sought $350 million in public financing before spending $421 million on free agents--are raising ticket prices for next season. The price increases reflect the new Yankee Stadium, which is nearing completion, as well as the player expenses. Nearly half the stadium now costs more than $45 a ticket.
Safeway is investigating new locations and plans to open 36 stores in 2009, taking advantage of the depressed real estate market. CEO Steve Burd cites "extraordinary opportunities" for aggressive buyers right now.
Similarly, Aldi is expanding in the Dallas-Ft. Worth area. The discount grocer is adding as many as 25 new doors in the next 18 months, spurred on by strong sales as consumers look for bargains.
And Tops Markets is growing by up to 10 stores in upstate New York while investing $150 in capital improvements to existing locations.
Many large retailers are announcing cutbacks in store openings for 2009. Staples is planning to limit capital spending and reduce store openings by by 30% next year, while Coldwater Creek revised its 2009 store openings plan to 15 stores rather than 40. Other retailers will be considering similar approaches, which will be noted in this space as they are announced.