Retail tenants are in growth mode. Nearly 49% of U.S. retail chains plan to expand their footprints over the next five years, compared with 28.5% that plan to reduce space, according to Colliers’ Fall 2023 Retail Report. Colliers surveyed 123 midsize and large chains. That spread of 20.5 percentage points is significantly bigger than 2016’s 0.8 percentage points, when a similar Colliers survey revealed that 40.5% planned to expand and 39.7% of retailers planned to minimize space.
Grocery retailers are the most aggressive in their plans to expand these days. According to Colliers, 84.2% of grocers plan to expand their physical retail space in the next five years. Aldi, Costco, H-E-B, Sprouts Farmers Market and Wegmans are among the chains rolling out new stores this year. Drug and beauty is the category in which the greatest share of retailers want to shrink their footprints. According to Colliers, 42.1% of drug and beauty retailers aim to reduce their amount of physical space to some degree in the next five years.
According to Colliers, 81.7% cite increasing their geographical reach as a reason to expand, and 73.3% cite attracting new shoppers.
New store formats are underway, as well. According to Colliers, 39% of all retailers plan to test new formats over the next couple of years. They cited both keeping up with changing customer tastes and competitors as the biggest reasons. The most common type of format retailers expect to test? One that caters to omnichannel shopping with collection points for online orders, ordering kiosks and drive-up/curbside-pickup facilities.
4 Tenant Trends Marked by Store Openings
Malls are still a great place to make a first impression.
Wooden and sustainable toy brand Melissa & Doug will open its first-ever retail store in October, at The Westchester mall in White Plains, New York. The 1,600-square-foot store is the company’s first brick-and-mortar location in its 35-year history. The company will promote the store by sponsoring the mall’s holiday Santa experience.
Rendering of the Melissa & Doug store at The Westchester
Direct-to-consumer brands continue to build physical store networks to support omnichannel sales.
Luggage maker Away is opening two stores this year: a unit in Washington, D.C.’s Georgetown and a second Boston store, on Newbury Street. The direct-to-consumer brand opened its first store in New York City in 2016 and has grown to 15 units in the U.S., Canada and London.
Wholesalers want stores, too.
Women’s fashion brand Princess Polly opened its first U.S. store, a 3,370-square-foot unit at Westfield Century City in Los Angeles. Recently purchased by brand accelerator A.K.A. Brands, Princess Polly originally launched in Australia as a wholesaler to PacSun stores.
Experiential is even coming to grocery stores.
Fourth-generation wholesale grocer Jackson Mitchell is launching a supermarket and leisure/dining concept called FreshTake in a 42,000-square-foot former Whole Foods in Augusta, Georgia. Mitchell’s company operates five Little Giant Farmer’s Market stores in Atlanta. When the first FreshTake opens next summer, it will feature an in-store cafe with seating for 130, an outdoor patio dining area with a walk-up barbecue smokehouse, a putting green and a beer and wine bar.
Rendering of the August, Georgia, FreshTake
Phoenix Marketplace Is Testing “Cool Pavement” for Researchers
Could cool pavement be the solution to high energy costs and heat islands? The 1.2 million-square-foot Desert Ridge Marketplace in Phoenix will help Arizona State University researchers find out. On Monday, the shopping center’s parking lot became ASU’s largest surface test yet for so-called “cool pavement,” in which substances like acrylic, cement, asphalt and rubber are overlaid on existing paved surfaces to reflect more sunlight than dark asphalt. ASU will monitor the pavement’s performance for one year, using sensors to gauge temperature differentials above and below the pavement. It’s the first time the technology has been tested beyond a residential street. ASU and other parties have put in more than 100 miles of such cool pavement on Phoenix’s streets in recent years, in some cases lowering pavement temperatures by as much as 12 degrees.
C-Suite Update: Agree Realty Promotes from Within
Agree Realty named Nicole Witteveen COO. A four-year company veteran, she previously served as the company’s executive vice president of people and culture and as chief of staff. Agree also named Craig Erlich to the newly created role of chief growth officer. Erlich has served as chief investment officer and COO of the firm. He’ll assume responsibility for business development and tenant relations.
By Brannon Boswell
Executive Editor, Commerce + Communities Today