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Amazon plans physical department stores, 14 more retailers opening new stores and more

August 19, 2021

Amazon will open several department store-like physical locations to sell items from top consumer brands, furthering its push into omnichannel retailing. Some of the first stores are expected to be located in California and Ohio, sized at around 30,000 square feet. That’s significantly smaller than most department stores, which typically occupy about 100,000 square feet, and closer to the smaller formats that Bloomingdale’s and Nordstrom have opened in dense urban areas. However, Amazon’s planned footprint for the new stories also is much larger than many of the company’s other physical concepts like Amazon Fresh and Amazon 4-Star.

14 more retailers opening new stores

Toys R Us will open shops within more than 400 Macy’s stores next year, and more Toys R us inventory is now available on Macy’s website. A CNBC article cited Macy’s chief merchandise officer Nata Dvir as saying the hope is that shoppers will visit Macy’s for toys and buy other items while there.

Barnes & Noble is building a 10,000-square-foot store at Florida’s Walk of Coral Springs. The store will sit on part of the site of the retailer’s former, 20-year-old, 27,000-square-foot store. Grand opening is set for late September.

Sun & Ski Sports will open what it calls the largest specialty outdoor retail stores in the Mid-Atlantic this fall: a 30,000-square-foot unit at Hanover, Maryland’s Arundel Mills. It will take over a former Modell’s Sporting Goods.

Boxing-themed sports bar Knockout Sports Bar has five locations across Texas and plans 10 more there this year, including in Dallas, Fort Worth, Houston, Austin and Waco. The chain serves 26-degree bottled beer using a proprietary refrigeration system.

The new owners of Frank and Oak are ready to grow the Canadian fashion label. Unified Commerce Group purchased the brand out of bankruptcy in October and closed all 11 U.S. stores, keeping 11 Canadian ones open. This week, its first new U.S. store opened, a 1,200-square-foot unit in New York City’s SoHo. It will open a 3,600-square-foot flagship in Williamsburg, Brooklyn, next week. Leap, a business that builds and operates brick-and-mortar stores for digitally native brands, will operate the two stores. Frank and Oak also will open a Canadian flagship in Vancouver in November.

After testing pop-ups in Pismo Beach, California, See’s Candies will open a permanent store at Pismo Coast Shopping Plaza. The chocolate maker operates four other stores across California.

Wendy’s is the latest restaurant operator to test units inside Walmarts after McDonald’s and Subway closed their locations within the retailer’s stores. The first new Wendy’s Hamburger Stand opened recently at a Walmart in Heath, Ohio, and serves items not found at traditional freestanding Wendy’s stores. La Madeleine, Taco Bell and Domino’s have announced similar deals to operate inside Walmart stores.

Liquivida Lounge has four locations underway in Florida, including its latest, at Regency Centers’ Prosperity Centre in Palm Beach Gardens. The franchise offers IV drip therapies, including to lose weight and to beat hangovers. The brand has 11 existing locations in Arizona, Connecticut, Florida and New Jersey.

Total Wine & More is snapping up vacant boxes in Michigan. The retailer plans to open units soon in a former Big Lots in Ann Arbor, a former Office Depot in Novi and a former Toys R Us in Sterling Heights. The chain operates 217 stores.

New age coaching, healing and hypnosis center and retailer Liberate Yourself opened a second Los Angeles store and event space, on Ventura Boulevard in Sherman Oaks. The brand’s first store is in Los Feliz.

Liberate Yourself

Country singer Jessie James Decker expanded her Instagram-friendly affordable women’s apparel and accessories brand. Kittenish had a physical unit in Nashville and has added one in Dallas’ mixed-use West Village.

Happy Trees Agricultural Supply opened two stores in Virginia — in Petersburg and in Fredericksburg — to sell CBD products, as well as soil, grow lights, nutrients and other items needed to grow cannabis and other plants. Happy Trees also opened its first dedicated warehouse to prepare for expansion as the state’s cannabis retail industry grows. Virginia legalized personal possession and limited cultivation of marijuana in July, opening the door for a recreational retail market to develop over the next several years.

Discounter WOW Wholesale Outlet Warehouse is opening a second store — in a former CrossFit in Stow, Ohio — in September. The retailer opened its first unit in Akron, Ohio’s Ellet neighborhood five years ago. It sells overstock items from large retailers in a club-style space, complete with dance floor, stage lighting, disco balls and sound system. The products include brand-name clothing, footwear, jewelry, furniture, housewares, electronics, tools and toys.

Voodoo Doughnut will open its 12th location in mid-November, in a former freestanding Chase bank in Vancouver, Washington. Voodoo Doughnut opened in Portland, Oregon’s Old Town Chinatown in 2003, followed by a second Portland unit in 2008. Subsequent expansions took the company to Colorado, Texas, Florida and California. Voodoo Doughnuts will open in Houston and Denver in November and December.

Q2 updates from top retailers

Walmart’s customers returned to stores in the second quarter. “Customer behaviors changed during the quarter as people were shopping with us more in stores than online,” said president and CEO Doug McMillon. “As that shift occurred, we gained market share in grocery.” E-commerce growth slowed year over year in the second quarter to 6%, added executive vice president and CFO Brett Briggs. “In some periods, in-store shopping will lead the way, and in some, e-commerce will lead the way. While we’re always striving for more in each part of the flywheel, I’m pleased with the overall growth of the business.” For Walmart U.S., same-store sales grew 5.2% year over year in the second quarter and the number of transactions rose more than 6%. “Customers are returning to the convenience of one-stop, in-store shopping,” Biggs said.

“In some periods, in-store shopping will lead the way, and in some, e-commerce will lead the way.”

At The Home Depot, stores are more important than ever, chairman and CEO Craig Menear said on the retailer’s second-quarter earnings call. “While customers have gotten more comfortable buying online, we’ve never been more confident in the importance of our physical stores, as they remain the center of our customer experience due to the project nature of our business. For those customers that chose to transact with us online during the second quarter, more than 55% of our online orders were fulfilled through our stores.” Same-store sales increased 3.4% year over year during the second quarter.

Danish jewelry brand Pandora said U.S. sales climbed 63% from the second quarter of 2019 to the second quarter of 2021. Click-and-collect proved extremely popular in the U.S., accounting for 13% of Pandora’s online sales.

Target’s same-store sales increased 8.9% year over year in the second quarter, on top of a record 24.3% growth from the second quarter of 2019 to the second quarter of 2020. “Guests have emerged from a year in which digital was the primary growth driver, and they’re now returning to our stores in droves,” said chairman and CEO Brian Cornell. “As a result, the majority of our second-quarter growth was driven by the stores channel, where comps grew 8.7% on top of 10.9% a year ago. In addition, traffic accounted for more than 100% of our second-quarter growth, in contrast to a year ago when guests were limiting time out of their homes and the bulk of our growth was coming from bigger transactions.”

Supermarkets add convenience through technology

Flush with cash from pandemic revenue surges, supermarket chains are reinvesting in their technology infrastructure to promote further sales growth.

Some are partnering with Google Maps. The app is working with supermarket chains to integrate online-purchase-pickup into its system. Kroger, for one, is offering pickup service through Google Maps at 96 midwestern stores. Consumers can connect their orders to Google Maps, which will prompt them when it’s time to pick up their orders and will share their arrival times with the supermarkets. Google Maps also has a deal with Albertsons to integrate its stores.

Albertsons also has launched a subscription delivery service and a new app. FreshPass is a paid subscription program that offers free, unlimited delivery on orders over $30, as well as exclusive perks. Meanwhile, the Albertsons app enables members to view and clip digital coupons and personalized deals, redeem rewards for free gas and groceries, receive cash discounts, create in-store shopping lists and place online orders for delivery and pickup. App users also will benefit from an integrated in-store experience, according to the company, which points to a digital wallet, app-coupon integration, list builders and a pay-from-app feature.

Food stamp boost will benefit off-price chains, too

An expansion to the Supplemental Nutrition Assistance Program will start in October, giving each recipient an average $157 a month extra. It won’t just boost sales at supermarkets but also will benefit fast-food restaurants like McDonald’s, Wendy’s and those under the Yum Brands umbrella, as well as off-price retailers like TJX and Burlington, according to Cowen researchers. Thirty-four percent of Burlington customers receive food stamps, according to the company.

By Brannon Boswell

Executive Editor, Commerce + Communities Today

Commerce + Communities Today

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