24 minute read
Industry News
from CCR Issue 4, 2022
AroundtheIndustry
RETAIL
Five Below
Five Below will expand to 120 stores in the Philadelphia area as part of a plan to grow its national presence threefold to upwards of 3,500 locations over the next nine years. The retailer— known for its lowpriced toys, candy and other goods aimed at teens and tweens— also will expand its higher-priced “Five Beyond” line to attract older, bigger-spending shoppers.
Walmart/Space NK
UK-based beauty retailer Space NK has started selling its prestige products via Walmart’s online marketplace and plans to open branded in-store shops at 250 US Walmart stores this summer. Walmart’s Beauty Space shops will feature premium-priced makeup, hair and skin care products from 15 brands.
Kohl’s/Sephora
Kohl’s will expand its in-store Sephora shops from about 200 locations to 850 by next year with a goal of surpassing $2 billion in annual sales from the beauty banner. Kohl’s also is testing a small-format store in Seattle with plans to grow the 35,000-squarefoot concept to more than 100 locations over the next few years.
DSW
Designer Brands is making plans to shrink some of its stores and use others as fulfillment centers for online sales of its footwear brands including DSW and Camuto Group. The ultimate goal is to develop a “store of the future,” reduce the average footprint to about 15,000 square feet and “tell different stories with these brands.
Best Buy
Best Buy will expand its merchandise beyond electronics and add products in fitness, health, electronic transportation, outdoors and other categories. The retailer also will make moves to focus more on online retail, including closing up to 30 stores annually for the next three years.
Walmart Health
Walmart Health is starting to open its next slate of clinics, with five locations planned for Florida. The plans cover two clinics in Orlando, two in Jacksonville and one in Tampa. The company also plans to roll out its new tech stack, born from its partnership with Epic. RESTAURANTS
P.F. Chang’s revs up restaurant growth plans
P.F. Chang’s will expand its smaller-format P.F. Chang’s To Go concept this year, with plans to grow from 12 to 20 locations to feed growing demand for off-premises dining while also continuing to expand its traditional bistro format.
Cinnabon
Focus Brands’ strategy for moving Cinnabon beyond mall food courts and airport kiosks includes a co-branded concept with Carvel that the company has dubbed Cinnabon Swirl. Plans for the standalone units are moving from the drawing board to the prototype phase, and the first units are slated to open early next year.
Popeyes Louisiana Kitchen
Popeyes Louisiana Kitchen will open a flagship location in New York City’s Times Square in June, one of more than 200 new units planned to debut in the US and Canada in 2022. More than half of the new locations will feature the chain’s new double drive-thru format.
Catalogue
Steve Salis, co-founder of &pizza, is expanding the portfolio of restaurant concepts under his Washington, DC-area platform Catalogue. Catalogue’s six banners include brunch concept Ted’s Bulletin, barbecue eatery Federalist Pig and Honeymoon Chicken, and plans call for the addition of an unnamed seventh format.
Fat Brands
Fat Brands has signed 20 new franchise development deals that will add more than 50 new units to its portfolio of quickserve banners that includes Hot Dog on a Stick, Marble Slab Creamery and Round Table Pizza. Thirty new units are to open by the end of the year, and many of the new locations will be co-branded units featuring Great American Cookies and Marble Slab Creamery.
Friendly’s Restaurants
Friendly’s Restaurants is expanding into fast-casual with the opening of its first Friendly’s Cafe, a 2,700 square-foot concept with 45 seats in Westfield, Massachusetts. Customers will have the option of ordering at the counter, at the table using a QR code or online for pickup or delivery.
AroundtheIndustry
HOSPITALITY
Radisson Hotel Group
Radisson Hotel Group intends to capitalize on lowered travel barriers and improving economies to add 150 properties in the Asia-Pacific this year. The brand is pursuing a five-year plan to double its portfolio to 3,200 hotels in 120 countries by 2025.
The Study Hotel
The Study at University of Chicago is in its soft opening phase, accepting guests and event reservations at its 12-story, 167-unit building on the Midway. The property, located beside the Rubenstein Forum at 60th and South Kimbark, features fitness facilities, ballroom and conference spaces, and a tavern-style restaurant that will open by the end of the 2021–22 academic year.
The National Autograph Collection
The National Autograph Collection has opened inside the historic First National Center in Oklahoma City. Built in 1931, the 32-story landmark returns from a thorough renovation led by NE Development & Partners, ADG, Flick Mars and EverGreene Architectural Arts. The new 146-room hotel radiates with an enduring opulence that merges Art Deco and Neoclassical styles.
Graton Resort and Casino
The Graton Resort and Casino in Sonoma County, California, which is owned by the Federated Indians of Graton Rancheria, filed a notice to increase the size of its gaming floor and build a second hotel tower. The tribe is doing an environmental study on the effects on the areas around the casino and hotel, looking at the water resources, air quality, public services, noise and traffic.
Isle Casino Hotel/Horseshoe brand
Isle Casino Hotel Black Hawk in Colorado will become the latest venue to be rebranded as Horseshoe Black Hawk by Caesars Entertainment. The new name will come along with upgraded hotel rooms, a renovated casino floor and changes to the facility’s exterior. In addition, Horseshoe Black Hawk’s poker room will transform into a World Series of Poker area.
Twenty Four Seven Hotels
Twenty Four Seven Hotels in Newport Beach, California is expanding by six hotels this year. The hotel owner currently has a 68% occupancy rate that includes both business and leisure and travelers. Grocery
Fareway Stores
After opening a location in Rockwell City, Iowa, this year, Fareway Stores is continuing to expand in its home state with the groundbreaking of two stores this week and a plan to open another location in Waukee, Iowa. The grocer is expanding its presence across the Midwest with a recent store opening in Nebraska, a Spirits & More opening in Minnesota and a plan for two additional Fareway Meat Market locations in Kansas.
Fresh Market
The Fresh Market Inc. has opened a store in Palm Beach Gardens, Florida, its second location featuring the specialty grocer’s innovative center store culinary kitchen and coffee bar concept.
Amazon Fresh
Amazon Fresh has opened a store in Fairfax, Virginia, and plans to open three additional stores in Northern Virginia, in Arlington, Lorton and Manassas. The 30,000-square-foot store, which features Amazon’s Just Walk Out technology, follows the opening of stores this year in Moorpark, California; Naperville, Illinois; and Seattle.
Big Y Foods
Big Y Foods plans to introduce a smaller, “downtown format” store in Springfield, Mass., next year, named Big Y Express Fresh Market. The 10,000-square-foot store will be about one-fifth the size of an average Big Y World Class Market store, and the concept will feature staple grocery items as well as natural and organic products and prepared meals, including sushi made by an on-site sushi chef.
Whole Food Market
Amazon has opened its first Whole Foods Market location featuring the company’s Just Walk Out technology, which enables customers to bypass checkout lanes and pay through a mobile app. The store, located in Washington, DC’s Glover Park neighborhood, is the first of two Whole Foods locations opening this year that will implement the system, which is eventually expected to roll out to more Whole Foods and Amazon Fresh grocery locations.
H-E-B
H-E-B plans to bring its flagship H-E-B brand stores to the DFW Metroplex next year. The stores, which will open in Frisco and Plano in fall 2022, build on the company’s long-standing presence in the area and reinforce its commitment to serve more customers in this dynamic and growing part of Texas.
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They said it
How Wendy’s has fueled its growth “We’ve had a lot of success in the US and we have proven we can play the game internationally. The output of that is more inquiries to keep growing the brand.”
— Wendy’s CEO Todd Penegor on how roles of breakfast, digital and global initiatives have fueled the fast-casual brand’s growth “A strong labor market bolstered wage expectations among consumers under age 45 to 5.3% – the largest expected gain in more than three decades, since April 1990.”
— Chief Economist Richard Curtin on how the recent run of consumer confidence continues to drive the economy’s rebound
— Horn BBQ founder Matt Horn on how his restaurant survived and thrived during the pandemic
Did you know
It’s a bird. It’s a plane. Would you believe a chicken wing drone delivery? In partnership with drone delivery startup Flytrex, Brinker
International is taking to the skies to deliver food from its virtual It’s
Just Wings brand in Granbury, Texas.
Flytrex launched its first delivery drones in Iceland in 2017 and first partnered with Brinker in 2020 to deliver It’s Just Wings food in
North Carolina.
Walmart plans to create global tech hubs in Toronto and Atlanta—a move that will bring hundreds of employees in both places to develop cutting-edge retail technology. Walmart operates 14 other Walmart Global Tech centers in cities like Seattle and Chennai,
India, and its tech staff around the world grew to 20,000 last year.
The numbers game
28.4 The percent of market share of the restaurant industry that big franchises commanded in 2021, up from 19% a decade ago, according to a Rabobank report. On the other hand, non-franchised eateries’ share of the total dipped 11%.
The number of new jobs that restaurants and bars added of the 431,000 new non-farm jobs created in the US in March, according to the Bureau of Labor Statistics. The jobs accounted for one out of every seven new positions.
The amount, in billions, that Google plans to invest in new offices and data centers in the US in 2022. The total marks an increase from last year’s $7 billion and comes as Google shepherds more of its employees back to offices even as it offers more flexible work options.
61,300 9.5
Retain. Advance. Repeat.
AEC women’s networking event draws 21 companies, some 170 industry professionals in spirit of leading to positive change
The WWT drew approximately 170 AEC professionals and 21 company sponsors to its inaugural networking evening at City Green in City National Plaza in downtown Los Angeles.
After two years of virtual events, four architecture, engineering and construction (AEC) industry organizations in Los Angeles jumped at the opportunity during Women’s History Month to join forces and create an in-person event connecting women in the industry.
Attracting approximately 170 people, the inaugural Women Working Together (WWT) was the first time these four organizations have collaborated to provide an opportunity for their members to interact. “This event, during Women’s History Month, delivers allyship, support and collaboration that will lead to positive change in our professions well beyond this celebratory time,” says Jennifer Noel Wong, WWT Steering Committee member and an Associate at CO Architects. WWT was a collaboration between the American Institute of Architects, Los Angeles Women in Architecture Committee (AIALA-WiA); National Association of Women in Construction Los Angeles Chapter (NAWICLA); Structural Engineers Association of Southern California Women in Structural Engineering Committee (SEAOSC-WiSE) and Women in Construction Operations Southern California Chapter (WiOPS). With the numbers beginning to improve due to company and professional organization efforts like WWT, women still are underrepresented in the AEC industry. According to the US Bureau of Labor Statistics, women comprise only 10.9% of construction industry workers, yet they make up 47% of the nation’s workforce.
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WWT’s Steering Committee was composed of six women from four professional organizations focused on the advancement of women in the AEC industry. (L-R) Jennifer Noel Wong, AIALA-WiA, CO Architects; Leah Wimberly, WiOPS, Pacific Wall Systems, Inc; Michelle Kam-Biron, SEAOSC-WiSE, Structurlam; Ileana Holguin, NAWIC-LA, McCarthy Building Companies; Ashley Richardson, AIALA-WiA, Ehrlich Yanai Rhee Chaney Architects; and Barbara Kotsos, NAWIC-LA, Giroux Glass.
Architecture and engineering fare a little better with women comprising just 27% of the workers in this sector. Furthermore, AEC industry careers for women are often short lived due to inflexible hours, culture issues, lack of advancement and limited mentorship opportunities. “Working in male-dominated industries of varying degrees, women in architecture, engineering and construction careers may not have many other women to interact with and learn from in their daily work environments,” says Michelle Kam-Biron, WWT Steering Committee member, mass timber specialist at Structurlam. “The WWT Networking Event provided an opportunity for the participating professional organizations and members to connect as a larger group and expand their voice, work to increase opportunities for principal positions in their industries and develop mutually beneficial relationships.” The event also garnered the financial support of 21 companies including: Brandow & Johnston, Coleman Equipment Rentals, Clark Construction, IMEG Corporation, McCarthy Building Companies, Pacific Wall Systems Inc., T&S Structural, Abet Laminati, Giroux Glass Inc., HBC, JRM Construction West, Martin Bros., Murray Company, Vulcan Materials Company, Structural Focus, Thornton Tomasetti, Hathaway Dinwiddie, Kimley Horn, MATT Construction, Miyamoto and USGBC-LA. Due to this level of interest within the industry, the WWT steering committee is planning another WWT event next year and will continue to look for regular opportunities to network with one another. Along with Noel Wong and Kam-Biron, the WWT steering committee includes Ashley Richardson, AIALA-WiA, Ehrlich Yanai Rhee Chaney Architects; Jennifer Noel Wong, AIALA-WiA, CO Architects; Leah Wimberly, WiOPS, Pacific Wall Systems Inc; Barbara Kotsos, NAWIC-LA, Giroux Glass; Ileana Holguin, NAWIC-LA, McCarthy Building Companies.
They stand with Ukraine
Eleven Engineering to donate May profits to humanitarian crisis
The crisis in Ukraine has a little close to home for Eleven Engineering Inc. In turn, the company is donating its May 2022 profits from Skaastore.com to help support Ukrainian refugees in dire need of assistance during the current crisis with Russia. Edmonton, Alberta, Canada, home to its headquarters, has the largest Ukrainian population of any Canadian city.
Eleven Engineering CEO John Sobota says that May is not only the month to get angry about what is going on, but to do something about it. “We are heartbroken for the Ukrainian refugees fleeing to neighboring countries and those stuck in the warzone, as well as outraged by the needless humanitarian crisis caused by Russia’s unprovoked invasion.” As a result, Eleven Engineering is not only pledging all SKAAstore profits for the month to go toward Ukraine support, it also is making a call-to-arms to other Canadian-based companies. “What Eleven Engineering is doing here is a small thing, and Ukraine’s neighboring countries can also only do so much,” Sobota says. “So Canadians need to pitch in as much as possible and that will make a difference.” Eleven Engineering is challenging all Canadian companies to speak out and donate their profits in May. As to where the funding goes, Sobota says that is up to each individual company. “We are still researching the best places to send the funds we’re raising this month and we’ll announce the donations' destination(s) in June.” In addition, Eleven Engineering is inviting everyone to share their first-hand stories of heroes from this conflict on its social media platforms.
Did you know
The NFL’s Tennessee Titans recently unveiled a rendering of a new, enclosed stadium that could cost $1.9 billion to $2.2 billion to build. The stadium, which could be completed in 31 months, also will include $4 billion worth of retail, office and residential buildings on a campus that would be built out over the next decade.
Stemming the tide
Why elevated building costs can present gaps in insurance
By Scott McDonough & Kenneth Travers
Editor's Note: This is the first in a two-part series on what commercial construction professionals can do on the insurance front on the heels of continued rising building and construction costs.
Rising building costs do not just make new construction more expensive, they can also put property and business owners at risk of having gaps in insurance coverage. As the price for materials and labor increases at unprecedented rates due to the pandemic and supply chain issues, it can have a significant impact on insurance because it is not possible to fix or rebuild property at pre-pandemic values with today’s higher construction costs.
This means a business owner may not be made whole after a loss and could be in jeopardy of significant financial strain. That’s why regular property valuation assessments are vital to ensure adequate limits are in place in case of a loss. Since the pandemic started, the cost for many building materials increased, and it’s not just material that increased. Construction labor costs also jumped in 2021 due to labor shortages,
consumer demand, supply chain issues and increases in the frequency and severity of catastrophic events.
The Building Cost Increase is Likely to Stay
The cost for certain building materials has dropped since its peak earlier in 2021. For example, lumber went from more than $1,600 per 1,000 board feet in May to $647 in September. Despite this, industry experts believe the costs will remain higher than in 2020 before the pandemic hit when lumber prices were around $400 per 1,000 board feet. From supply chain shortages to consumer damage due to storms and catastrophic events, many factors are affecting costs in the construction industry. This includes continued COVID-19 restrictions, resultant shipping disruptions and labor shortages in the trucking and longshoreman industries. These longer-lasting impacts on the rise in costs of construction materials could continue through the second half of 2022 and into 2023.
How Construction Cost Increases Affect Insurance
Because construction costs have increased, it also can mean that business owners may not have adequate insurance coverage. Therefore, if a business sustains property damage, they might only have coverage for part of the rebuild due to the higher priced materials. Shortages of skilled and unskilled labor in the roofing, plumbing and electrical trades are compounding prices and adding to the difficulty in acquiring materials and durable goods. This significantly affects the insurance industry’s response on claims and losses in construction and may hinder business recovery.
Understanding Insurance to Value
The best way to make sure a business is adequately insured is to know the property value. It is important for business owners to perform regular property valuation assessments, known as insurance-to-value, which can give business and property owners peace of mind after a loss. If there is a major loss, the coverage amounts in a business’ policy might not be enough to cover replacement costs at today’s prices. Having an accurate assessment of the complete cost to replace the insured property can be the difference between recovering quickly or incurring additional loss from delays in repairs.
Help with Asset Valuation
For business owners, determining the value of assets is not always a fast and easy process, especially considering the price fluctuations with building materials and construction labor. But having an insurance agent or broker work with an experienced insurance company can help alleviate any complicated situations. At The Hartford, Risk Engineering specialists know the ins and outs of many industries. They understand the unique risks and challenges those businesses face and can work to help with the asset valuation process by providing important insights, which can then assist in establishing more accurate replacement values. The Hartford’s risk engineering professionals track replacement costs on a quarterly basis, and during times of more rapid cost fluctuations, they access several industry data sources that track material and component pricing. By using that data to assist in property replacement cost valuation, The Hartford can make sure business owners have adequate insurance to property value and better protect their facilities.
Scott McDonough is Head of Large Property at The Hartford. Scott has more than 35 years of experience in the insurance industry specializing in technical underwriting and portfolio management across multiple lines of business and geographies.
Kenneth Travers is Technical Manager – Property and Product Specialist for The Hartford. He has more than 43 years of experience in the risk engineering field developing and delivering loss control engineering services and assessment tools for complex businesses with a focus in natural catastrophe, business impact, supply chain and fire protection engineering applications.
Raise your hand if you’re happy
Why the best practices in workers compensation plans include expedited care, diagnosis, disposition and definitive treatment
By William Lang, Robert Spatzer, Adam Wootton & Dan Carlin
Raise your hand if you are happy with the Workers Compensation process. Anyone? Didn’t think so. General dissatisfaction from employers and employees over the quality and expediency of care under current Worker’s Compensation systems is well documented.
While this dissatisfaction has many causes, one theme that repeatedly emerges in qualitative studies is a lack of transparency and a depersonalized system that does not fully address the needs of injured and ill workers in a meaningful and holistic way. While state worker’s compensation systems have undergone significant reformation efforts, these have largely focused on financial outcomes through decreasing resource utilization and imposing tighter regulations and fee schedules. Unfortunately, there is a lack of strong evidence that many of these efforts have materially improved either the experience or the care that injured workers receive. More recently, there has been a growing awareness that worker’s expectations in the aftermath of an injury and their personal experience with the Workers Comp system have a very significant impact on claims outcomes from both a medical recovery and financial standpoint. While this concept is not new in general medicine, it has not been systematically addressed in the Workers Comp space to date and points out the error in the traditional conclusion that the medical severity of an injury will dictate claim length, claim cost, and medical recovery. In fact, research (Colon & Arnautovic, 2017) in workers comp on the impact of changes in medical fee schedules, utilization, and claims costs has shown an inconsistent relationship between the injury severity and cost. Further, among employees with comparable injury types of similar medical severity, there is significant variability in claim length, development of disability, return to work and time to
maximum medical improvement (Ashley et al., 2017; Hayden et al., 2019). This points to the necessity of a new approach to workers comp care delivery with a broader understanding of the root causes of claim outcomes. This new approach will center on placing the injured patient at the center of the continuum of care—with an emphasis on building authentic advocacy-based relationships while addressing both their medical and psychosocial needs.
Psychosocial Influence on Claims Outcomes & Implications for Care Delivery
The current thinking largely equates the “severity” of a claim with the final cost of that claim. To understand why that is the case one only must apply the seemingly logical supposition that a more serious medical injury requires greater use of resources, costs more to treat and results in longer recovery and rehabilitation times.
While this thinking may be reasonable in an actuarial sense, it conflates the concepts of medical severity and cost, leading to a fundamental flaw in the understanding of what truly drives workers comp claim costs. In fact, as claim analytics have become more advanced there is a growing appreciation of the importance of factors beyond medical injury severity. It is well established that while most claims are medical only, shorter duration claims, the major cost drivers are a much smaller number of claims with prolonged medical care and disability leading to significantly higher costs. With respect to these latter claims, it is important to note that very few of them are due to catastrophic injuries. Rather, they are frequently related to the development of chronic pain and repeated, ineffectual treatments. As employee expectations are emerging as a critical area of importance, researchers are currently investigating how individuals with very similar injuries of similar severity can have such different outcomes. In qualitative research, employee “trust” in the system is often used as a surrogate for employee expectations and it is apparent that many current workers comp programs fail to support the development of a trusting relationship. This is not an insignificant problem. In fact, the US Department of Labor has said that a lack of trust in the system represents a fundamental threat to the long-term viability of Workers Comp programs in general. The Workers Compensation Research Institute (WCRI) also identified “trust in the workplace” as potentially playing a critical role in both medical and return-to-work outcomes.
Among other implications, this research (Robinson, 2014) points to the importance of evaluating and treating injured workers in consideration of not just biological, but social and psychological factors as well. Creating partnerships between medical providers, employers and employees that emphasizes the importance of these latter components represents an important step toward incorporating value-based medicine into worker’s compensation treatment models. Further, research suggesting that a worker’s expectation of recovery in the immediate aftermath of an injury can significantly alter the trajectory of an outcome, either positively or negatively, should inform the development of new treatment models. Interestingly, recognition of the importance of employee expectations is not new. Studies (Cancelliere, 2016; Noonan & Wagner, 2010) focused on early intervention strategies to reduce the demoralization associated with being out of work have shown that employees managed with a focus on supporting employee self-efficacy and early return to work compared to treatment as usual required less days off work despite no difference between the groups in self-reported pain. Additionally, individuals in early interventions group were eight times less (Noonan & Wagner, 2010) likely to develop chronic musculoskeletal conditions Collectively, the current body of evidence suggests that employee trust in the system and expectations regarding the quality of care and anticipated outcomes are crucial, modifiable targets for early intervention with the potential to dramatically influence both medical outcomes and claim length. However, for time-constrained clinicians trained and practiced in purely medical diagnosis and treatment, understanding the nuances of what constitutes a successful outcome from a worker’s compensation standpoint is challenging. Systemic thinking that correlates a claim’s success with purely medical and financial outcomes is outdated, incomplete and likely perpetuates the culture of conflict between employers and employees—when in reality, they have the same goals: Getting workers healthy and back to work. Consequently, innovative models of treatment are needed to address the care of injured and ill workers across the entire biopsychosocial continuum and bring the goals of the various stakeholders into alignment. Putting the patient at the center of care by focusing not only on their physical, “medical” care, but their social, emotional and psychological care will result in the best outcomes for employees and employers alike.
The authors include JobSite Care's William Lang, Chief Medical Officer; Robert Spatzer, Director of Clinical Analytics & Operations; Adam Wootton, Acting Chief Technology Officer; and Dan Carlin, founder and CEO.
