CSA Sept/Oct 2024

September/October 2024

Consumer Data Privacy Rules Focus on Neighborhood Centers Stores Get Smarter With AI

6

32

from the editor’s desk

tech viewpoint: a retail tech column

Contents VOL. 99 SEPTEMBER/OCTOBER NO.5

COVER STORY

8

TOP 100 U.S. RETAILERS Walmart and Amazon retain the top spots in Chain Store Age’s annual ranking of the nation’s 100 largest retailers.

17 18 19

Commentary: Consumer Data Privacy Rules: What retailers need to know.

Businesses advised not to rush through the Chapter 11 process.

Digitally native — and Gen Z fave — Princess Polly plots U.S. brick-andmortar growth.

STORE SPACES

21 22 24 25

Trending Stores: Foot Locker’s store of the future format provides a more elevated shopping experience.

Costco Wholesale Corp’s location in Mexico City is topped with a sprawling green roof that doubles as an urban park for local residents.

Vendor Q&A: Adam Acosta, of Boston Retail Solutions, discusses trends in barricade solutions and graphics.

Walmart makes history with a first-of-its-kind 3D-printed store addition.

26

Ace Hardware unveils experiential store format; to invest $1billion in remodels, new stores.

CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 225, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $75 per year. All other non-qualified in the United States: $96 one year; $186 two year; $17 single issue copy; Canada and Mexico: $138 one year; $258 two year; $19.20 single issue copy; Foreign: $138 one year; $258 two year; $16 single issue copy. Digital edition subscription: $55 one year digital; $105 two year digital. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave, Suite 225, Chicago, IL 60631. Subscription changes may also be emailed to contact@chainstoreage.com, or call 1-877-687-7321. Vol. 98, No. 2, March/April 2023. Copyright ©2024 by EnsembleIQ. All rights reserved.

Contents VOL. 99 SEPTEMBER/OCTOBER NO.5

29

REAL ESTATE

TECH

27

33

30

34

GROCERY ANCHORED CENTERS Rents climb to new heights for spaces —and will keep rising for years to come.

SPACE GRAB: Retailers battle over hard-to-get Class A space.

4

33

Q&A: Amazon VP discusses expansion of company’s Just Walk Out technology.

Vendor Q&A: Retailers are using AI to make stores smarter.

SEPTEMBER/OCTOBER 2024

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FROM THE EDITOR’S DESK

First Timers It may be a digital world, but brick-andmortar remains the cornerstone of retail as more and more DTC brands open shops to meet and engage with customers on a more personal level.

Here’s a look at some of the more recent brick-and-mortar newbies — including three imports new to our shores.  Garnet Hill: Part of the Qurate Retail portfolio, the woman’s apparel and home brand chose Legacy Place in Dedham, Mass., as the location for its first-ever full-price store. The outpost includes a bedding design center where customers can coordinate and layer combinations of fabrics, colors and patterns with the help of store design associates.  Guizio: The womenswear brand makes the move to physical retail in its New York City hometown, opening in Manhattan’s SoHo neighborhood. With travertine walls, marble floors and custom furniture, the store aims to give visitors a “luxurious shopping experience.”  Melissa & Doug: The popular preschool toy brand made its brick-and-mortar debut at The Westchester, an upscale shopping mall in White Plains, N.Y. The 1,600-sq.ft. space is designed to further the brand’s mission “to ignite imagination,” and makes it easy for customers to view — and even play with — the products close up.  Perigold: The designer-driven, online provider of luxe home furnishings, part of the Wayfair portfolio, will open its first-ever location next year. The two-floor, 30,000-sq.ft. space will be located at CityPlace in West Palm Beach, Fla.  Municipal: The premium, performancedriven active lifestyle brand co-founded by actor/entrepreneur Mark Wahlberg has big plans for brick-and-mortar. With its first store now open in West Hollywood, Calif., the company is on track to open a flagship in Carlsbad, Calif., complete with a barber shop 6

and a lounge area where people can relax or even do some work.  Represent: The British luxury streetwear brand opened its very first store, a 3,100-plus-sq.-ft. location in West Hollywood, Calif. Designed as a flagship and an office space for the brand, it is the first of three physical locations that Represent plans to open in 2024.  Revolve: After some 20 years in business, the pioneering online fashion retailer — and millennial and Gen Z fave — Revolve Group opened its first permanent brick-andmortar location, in downtown Aspen, Colo.

The store houses both Revolve and Fwrd collections, blending Revolve’s contemporary styles with Fwrd’s high-end designer pieces. (Revolve Group sells merchandise through two segments, Revolve and Fwrd, that leverage one platform.)  Skims: Starting its long-anticipated move into brick-and-mortar, the Kim Kardashianfounded shapewear brand moved into the Georgetown section of Washington, D.C., opening a 3,300-sq.-ft. outpost. A total of four stores are expected to open this year, with more locations going forward.  GU: The lower-priced, more trend-driven sister brand of Japanese apparel giant Uniqlo has opened its first permanent store outside of Asia — a flagship in New York City. With a sales floor of about 10,225 sq. ft., the two-level store features women’s and men’s clothing, along with shoes, bags and accessories.  Salomon: The French-born active lifestyle brand’s first-ever U.S. retail outpost is a pop-up in Manhattan’s SoHo district that’s focused on the company’s Sportstyle product category. Salomon plans to expand to five physical stores in 2025, beginning with a permanent space in New York City.  Sukoshi Mart: The leading Asian beauty retailer in Canada recently opened its first U.S. location, at Roosevelt Field Mall, Garden City, N.Y. Featuring a curated selection of top Asian beauty brands and lifestyle products, the store is the first of 20 new locations set to open across North America during the next 12 months.

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SEPTEMBER/OCTOBER 2024

CHAINSTOREAGE.COM

Walmart tops annual ranking of the nation’s largest retailers based on total revenues

By Marianne Wilson Staying power. Those are the two words that best sum up Chain Store Age’s annual ranking of the top 100 U.S. retailers.

The CSA Top 100 ranks the industry’s largest retailers by total revenues in their most recently completed fiscal year, which for the majority of the companies is 2023. Similar to the 2023 ranking and those in other recent years, and apart from some minor reshuffling, there is very little movement in the upper tier of the list. Most of the major shifts in the Top 100 over the years have been the result of mergers/acquisitions or liquidations. (At press time, the Kroger and Albertsons merger was still tied up in court.)

The consistency in the ranking is particularly true when it come to the top 10, a group of powerhouse players whose operating excellence, agility and flexibility — along with their deep financial resources and scale — helps keep them on top of their game.

Walmart, the leader for the past 20-plus years, once again took the No.1 spot in the CSA ranking.

The retail giant had another strong year as consolidated 2023 revenue rose 6% to a staggering $648.1 billion. Walmart’s omnichannel model continued to resonate with customers as it delivered growth in both in-store and digital transaction counts. U.S. e-commerce sales rose 17%, led by strength in pickup and delivery.

By doubling down on value and convenience, the chain has attracted new converts among higher-income shoppers.

Walmart’s retail prowess is in no small measure due to its ongoing investments in technologies such as generative AI. It also continues to focus on supply chain innovations, including expanding and retrofitting fulfillment centers with next-gen technology capabilities to enhance its grocery supply chain and maintain its grocery dominance.

In the race to stay on top, Walmart is also leveraging one of its greatest assets: its extensive store network. It plans to build 8

or convert more than 150 larger-format stores during the next five years while also continuing its program to remodel existing locations.

ALTERNATE STREAMS: The company also continues to grow alternative streams of revenue such as its global advertising business, which increased approximately 33% in 2023, including 22% for Walmart Connect in the U.S. The chain is also expanding its delivery-as-a-service business, Walmart GoLocal, which delivers goods to customers of other businesses.

In yet another new revenue stream, Walmart Commerce Technologies, the company’s solution provider subsidiary, will sell its proprietary internal AI-based logistics solution,“Route Optimization,” to third-party business customers of all sizes, offering the technology on a hosted software-as-a-service basis.

The retail giant is also integrating more financial services into its ecosystem through its majority-owned fintech startup, One. Amazon took the second spot on the list for the eighth straight year as it continues to narrow the revenue gap with Walmart. The retail and tech giant’s net sales increased 12% to $574.8 billion in 2023.

Amazon had a busy year on a number of fronts as it dived deeper into generative AI across its sprawling enterprise and continued to invest in other cutting-edge technologies. At the same time, it remained focused on cost controls as it undertook a number of initiatives to cut expenses, including layoffs and a reorganization of its U.S. fulfillment network across regional lines.

The reorganization also helped Amazon speed up delivery times.

So has the company’s ongoing investments in drone technology.

Amazon’s Prime Air drone delivery service aims to reduce delivery times to as little as 30 minutes for certain items.

Amazon has also focused on gaining market share in online grocery, where it is less dominant compared to many other categories.

It expanded Amazon Fresh grocery delivery and free pickup to customers without a Prime membership in the U.S., and launched a new grocery subscription option for members of its Prime service.

The dominance of Walmart and Amazon is evidenced in a recent report from Forrester, which forecast that the two retail giants are poised to dominate the U.S. retail landscape in the years to come.

If current trends continue, Walmart and Amazon will account for one-fourth of total retail sales and two-thirds of online retail sales in the U.S. by 2029.

METHODOLOGY: BEHIND THE NUMBERS Chain Store Age’s Top 100 ranks retail companies by net revenues in the firm’s most recently completed fiscal year (as of press time).

For retailers based in North America, the data reflects the company’s total global store count (except if otherwise noted).

For foreign-based companies, such as Ikea, only the figures related to the company’s North American division are provided (except if otherwise noted.)

The ranking contains a number of privately owned companies that do not release annual reports, financial statements or basic details related to their operations. The metrics for these companies, which are highlighted in the listing with an E, are based on public and private reports and independent research.

(Research compiled by contributing editor Debra Hazel.)

SEPTEMBER/OCTOBER 2024

CHAINSTOREAGE.COM

1

Walmart Inc.

Bentonville, Ark.

2

Amazon

3

CVS Health Corp.

4

Costco Wholesale Corp.

5

The Home Depot, Inc.

6

The Kroger Co.

7

Walgreens Boots Alliance

8

Target Corp.

9

Lowe’s Cos.

10

7-Eleven (E, U.S. and Canada)

11

Apple Inc. (Stores and iTunes only)

12

Albertsons Companies

13

Alimentation Couche-Tard

14

Publix

15

Ahold Delhaize (US only)

16

The TJX Cos.

17

Aldi Inc. (E)

18

Best Buy Co.

19

Dollar General Corp.

20

H-E-B (E)

Seattle

Woonsocket, R.I. Issaquah, Wash.

Atlanta

Cincinnati

Deerfield, Ill. Minneapolis

Mooresville, N.C. Dallas

Cupertino, Calif.

Boise, Idaho

Laval, Quebec Lakeland, Fla. Chantilly, Va.

Framingham, Mass.

Batavia, Ill.

Richfield, Minn.

Goodlettsville, Tenn.

Fiscal Yearend

2023 Revenue [000]

2022 Revenue [000]

2023 Store Count

2022 Store Count

1/31/2024

648,125,000

611,289,000

10,616

10,623

12/31/2023

574,785,000

513,983,000

568

600

Core retail sales will grow between

2.5% and

3.5%

from 2023, to between $5.23 trillion and $5.28 trillion. Online and other non-store sales are expected to account for $1.47 trillion to $1.50 trillion of overall sales.

12/31/2023

357,766,000

322,467,000

9,373

9,674

9/3/2023

237,710,000

222,730,000

861

838

1/28/2024

152,669,000

157,403,000

2,335

2,322

2/3/2024

150,039,000

148,258,000

2,722

2,719

8/31/2023

139,081,000

132,703,000

8,720

8,901

Source: National Retail Federation

2/3/2024

105,803,000

107,588,000

1,956

1,948

Returns fraud

2/2/2024

86,377,000

97,059,000

1,746

1,738

(44%)

and policy abuse

2/28/2024

86,140,000

86,110,000

12,592

12,645

(43%)

9/30/2023

79,560,000

70,640,000

271

272

2/24/2024

79,237,700

77,649,700

2,269

2,271

4/28/2024

69,263,500

71,856,700

14,545

14,468

12/30/2023

57,534,000

54,942,000

1,360

1,322

12/31/2023

54,536,000

55,218,000

2,048

2,051

2/3/2024

54,217,000

49,936,000

4,954

4,835

12/31/2023

47,700,000

40,210,000

2,938

2,813

2/3/2024

43,452,000

46,298,000

1,125

1,138

2/2/2024

38,691,600

37,844,900

19,986

19,104

were identified as the top trends having the most significant impact on retailers today, outranking factors such as operational costs and supply chain challenges.

Source: Loop’s The Rise in Returns Fraud

The U.S. secondhand apparel market grew

11%

— or seven times faster than the broader retail apparel market —

to $43 billion last year.

Source: ThredUp’s 2024 Retail Resale Report

San Antonio, Texas

10/31/2023

38,630,000

34,790,000

352

346

Source: Company reports unless otherwise noted E: Estimate, NA: Not applicable, R: Retail operations only.

CHAINSTOREAGE.COM

SEPTEMBER/OCTOBER 2024

9

21

Fiscal Yearend

2023 Revenue [000]

2022 Revenue [000]

2023 Store Count

2022 Store Count

10/1/2023

35,975,600

32,250,300

38,038

34,753

2/3/2024

30,581,600

28,318,200

16,774

16,340

12/31/2023

26,290,000

26,380,000

4,994

4,867

2/3/2024

23,092,000

24,442,000

718

783

12/31/2023

23,051,900

21,148,900

4,694

4,931

2/1/2024

21,950,000

21,180,000

267

262

12/31/2023

20,810,000

21,280,000

5,340

1,450

12/31/2023

20,650,000

23,170,000

6,227

6,087

2/3/2024

20,376,941

18,695,829

2,109

2,015

12/31/2023

19,700,000

19,720,000

800

567

2/3/2024

19,548,011

18,918,435

243

235

Starbucks Corp.

Seattle

22

Dollar Tree

23

Ace Hardware

24

Macy’s Inc.

25

The Sherwin-Williams Co.

26

Meijer (E)

27

AT&T Inc. (E,R)

28

Verizon Communications Inc. (E,R)

29

Ross Stores, Inc.

30

Racetrac Petroleum (E)

31

BJ’s Wholesale Club Holdings

32

Wakefern Food Corp.

33

Wawa (E)

34

AutoZone inc.

35

Rite Aid Corp.

36

Kohl’s Corp.

37

Pilot Co. (E)

38

Sephora Americas (E)

39

O’Reilly Automotive

40

Gap Inc.

Chesapeake, Va. Oak Brook, IL

New York, NY Cleveland

Grand Rapids, Mich.

Dallas

Basking Ridge, N.J. Dublin, Calif.

Atlanta

Marlborough, Mass.

Keasbey, N.J. Wawa, Pa.

Memphis, Tenn.

Harrisburg, Pa.

Menomonee Falls, Wis. Knoxville, Tenn.

New York City

Springfiled, Mo. San Francisco

10/1/2023

18,870,000

18,600,000

368

371

12/31/2023

18,500,000

14,930,000

1,000

1,017

8/26/2023

17,457,209

16,252,230

7,140

6,943

3/4/2024

17,410,000

17,570,000

1,741

2,309

2/3/2024

16,586,000

17,161,000

1,174

1,170

12/31/2023

16,560,000

21,200,000

750

655

12/31/2023

15,980,000

14,520,000

574

531

12/31/2023

15,812,250

14,409,860

6,157

5,971

2/3/2024

14,889,000

15,616,000

3,560

3,352

By 2029, U.S. total retail sales will reach $6.0 trillion, with online retail sales hitting $1.8 trillion. U.S. online retail penetration will reach

29%

by 2029, up from

23% in 2024.

Source: Forrester’s U.S. Online Retail Forecast, 2024-2029

Apple took the top spot for the third consecutive year in a ranking of the most valuable brands.

Google, Microsoft, Amazon and McDonald’s rounded out the top five.

Source: Kantar BrandZ’s Most Valuable Global Brands Report

The most common

(75%)

reason for returns is incorrect sizing, followed by item damage

(68%)

changing one’s mind or disliking the item

(49%)

and receiving the wrong product

(47%)

Source: Blue Yonder’s 2024 Consumer Retail Returns Survey

Source: Company reports unless otherwise noted E: Estimate, NA: Not applicable, R: Retail operations only, CS: U.S. convenience store sales only.

10

SEPTEMBER/OCTOBER 2024

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41

Casey’s General Stores

Ankeny, Iowa

42

Tractor Supply Co.

43

Nordstrom

44

Sheetz (E)

45

Etsy

46

Menards (E)

47

Dick’s Sporting Goods

48

Hy-Vee (E)

49

Wegmans Food Markets

50

Wayfair Inc.

51

Quik Trip (E)

52

Advance Auto Parts

53

Ulta Beauty

54

Qurate Retail

55

Giant Eagle Inc. (E)

56

WinCo Foods (E)

57

eBay Inc.

58

T-Mobile

59

SpartanNash Companies

60

Burlington Stores

Brentwood, Tenn.

Seattle

Altoona, Pa. New York City Eau Claire, Wis. Coraopolis, Pa.

West Des Moines, Iowa Rochester, N.Y. Boston

Tulsa, Okla.

Roanoke, Va.

Bolingbrook, Ill. West Chester, Pa. Pittsburgh

Boise, Idaho

San Jose, Calif.

Bellevue, Wash.

Grand Rapids, Mich.

Burlington, N.J.

2023 Revenue [000]

2022 Revenue [000]

2023 Store Count

2022 Store Count

4/30/2024

14,862,913

15,094,475

2,658

2,521

12/30/2023

14,555,741

14,204,717

2,414

2,333

2/3/2024

14,219,000

15,092,000

369

368

9/30/2023

14,000,000

11,700,000

680

670

12/31/2023

13,161,196

13,318,396

NA

NA

12/31/2023

13,080,000

13,380,000

337

329

2/3/2024

12,984,399

12,368,198

855

853

of respondents making at least one purchase there on a monthly basis.

9/30/2023

12,540,000

12,440,000

311

329

Source: Omnisend

12/31/2023

12,170,000

12,000,000

111

109

12/31/2023

12,003,000

12,218,000

7

3

4/30/2023

11,388,000

9,200,000

1,080

992

12/30/2023

11,287,607

11,154,722

4,786

4,770

2/3/2024

11,207,303

10,208,580

1,385

1,355

12/31/2023

10,915,000

12,106,000

36

34

Source: IBM’s Cost of a Data Breach Report

6/30/2024

10,810,000

10,650,000

487

484

3/31/2024

10,390,000

9,850,000

137

136

12/31/2023

10,112,000

9,795,000

NA

NA

12/31/2023

9,767,000

9,857,000

6,272

6,480

12/30/2023

9,729,219

9,643,100

156

139

2/3/2024

9,708,973

8,684,545

1,007

927

The U.S. leads the world in clothing expenditures. With a total average annual spending of $1,500 per person on clothes, Americans purchase approximately 53 items each year, averaging around $28.30 per item.

(73%)

Gen Z respondents have shopped at Chinese online marketplaces Shein, Temu, TikTok Shop and AliExpress in the past year.

Shein ranked as the most popular, with

44%

The average cost of a retail data breach in 2024 jumped

18%

to $3.48 million in 2024, an

18%

increase from $2.96 million in 2023.

Source: Public Desire

Source: Company reports unless otherwise noted E: Estimate, NA: Not applicable, R: Retail operations only, CS: U.S. convenience store sales only.

12

Almost three-in-four

Fiscal Yearend

SEPTEMBER/OCTOBER 2024

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61

Lululemon

Sumner, Wash.

62

Good Neighbor Pharmacy (E)

63

EG America

64

Chesterbrook, PA

Framingham, Mass.

AAFES

Dallas

65

Foot Locker

66

ODP Corp. (Office Depot)

New York City

Boca Raton, Fla.

67

Williams-Sonoma

68

PetSmart (E)

69

Northeast Grocery (E)

70

Grupo Chedraui (US Only)

71

Bath & Body Works

San Francisco Phoenix

Schenectady, NY

Mexico City, Mexico Columbus, Ohio

72

Bass Pro Shops (E)

73

Hudson’s Bay Company (E)

74

Signet Jewelers Ltd.

75

Hobby Lobby (E)

76

Southeastern Grocers (E)

77

J.C. Penney Co. (E)

78

Harbor Freight Tools (E)

79

AVB Brandsource (E)

80

Dillard’s

Springfield, Mo.

Toronto, Ontario

Hamilton, Bermuda

Oklahoma City, Okla.

Jacksonville, Fla. Plano, Texas

Calabasas, CA Nashville

Little Rock, Ark.

Fiscal Yearend

2023 Revenue [000]

2022 Revenue [000]

2023 Store Count

2022 Store Count

1/28/24

9,619,278

8,110,518

367

350

9/30/2023

9,050,000

8,840,000

2,448

2,350

12/31/2023

8,960,000

10,180,000

1,507

1,619

2/1/2024

8,500,000

8,500,000

4,330

4,330

2/3/2024

8,154,000

8,747,000

2,448

2,714

12/30/2023

7,831,000

8,491,000

916

980

1/28/2024

7,750,652

8,674,417

518

530

1/31/2024

7,730,000

7,990,000

1,582

1,574

#12/31/2023

7,460,000

7,200,000

279

277

12/31/2024

7,460,000

7,883,696

379

376

2/3/2024

7,429,000

7,560,000

1,850

1,802

12/31/2023

7,360,000

7,620,000

159

154

2/2/2024

7,230,000

4,860,000

134

142

2/3/2024

7,171,100

7,842,100

2,698

2,808

12/31/2023

7,110,000

6,840,000

1,059

1,020

12/31/2023

7,030,000

6,940,000

428

424

2/2/2024

7,020,000

7,160,000

657

661

12/31/2023

7,000,000

5,536,000

1,410

1,400

12/31/2023

6,930,000

6,850,000

3,150

3,145

2/3/2024

6,752,100

6,871,100

273

277

Amazon and Walmart are expected to account for onefourth of total retail sales and two-thirds of online retail sales in the U.S. by 2029, with their combined retail sales reaching $1.5 trillion and online retail sales hitting $1.1 trillion.

Source: Forrester’s U.S. Online Retail Forecast, 2024-2029

Over half

(57%)

of retailers plan to invest in predictive and generative AI in the next three to five years.

Source: Relex Solutions

Private label sales reached all-time highs in both unit and dollar sales during the first six months of 2024, with a unit market share of

22.9%

and dollar market share of

20.4%.

Source: Circana

Source: Company reports unless otherwise noted E: Estimate, NA: Not applicable, R: Retail operations only, CS: U.S. convenience store sales only.

14

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81

Sprouts Farmers Market

Phoenix, Ariz.

Fiscal Yearend

2023 Revenue [000]

2022 Revenue [000]

2023 Store Count

2022 Store Count

12/31/2023

6,837,384

6,404,223

407

386

6/29/2024

6,670,000

6,660,900

1,402

1,429

12/31/2023

6,390,000

6,230,000

1,150

1,113

1/31/2024

6,330,000

7,950,000

983

1,005

12/31/2023

6,226,547

6,967,013

202

197

2/3/2024

6,255,284

6,035,967

1,423

1,430

2/3/2024

6,182,000

6,344,000

907

915

2/3/2024

6,159,291

6,395,073

282

268

82

Tapestry

83

Discount Tire (E)

84

Staples (E)

85

Camping World

86

Petco Health and Wellness Company

87

Victoria’s Secret & Co.

88

Academy Sports + Outdoors

89

Ingles Markets

90

Michaels Stores (E)

91

Under Armour, Inc.

92

Ikea North America (E)

93

The Raley’s Companies

94

Total Wine & More (E)

95

GameStop Corp.

New York City

Scottsdale, AZ

Framingham, Mass.

Lincolnshire, IL San Diego

Reynoldsburg, Ohio Katy, Texas

Black Mountain N.C. Irving, Texas Baltimore

Conshohocken, Pa.

West Sacramento, Calif.

Bethesda, Md.

Grapevine, Texas

96

American Eagle Outfitters, Inc.

97

Demoulas Supermarkets (E)

98

Shell Oil Company (E)

99

Temper Sealy

100

Defense Commissary Agency

Pittsburgh, Pa.

Tewksbury, Mass.

Houston, Texas Lexington, Ky. Fort Lee, Va.

9/30/2023

5,892,800

5,678,800

198

198

1/31/2023

5,790,000

5,870,000

1,172

1,142

3/31/2024

5,701,879

5,903,636

440

439

8/31/2023

5,650,000

5,870,000

54

52

12/31/2023

5,570,000

5,526,000

231

253

12/31/2023

5,500,000

4,940,000

263

245

2/3/2024

5,272,800

5,927,200

4,169

4,413

1/28/2023

5,261,700

4,989,833

1,182

1,175

1/2/2024

5,240,000

4,950,000

92

91

12/31/23

5,010,000

4,790,000

4,324

4,286

12/31/2023

4,925,400

4,921,200

750

700

9/30/2023

4,900,000

4,400,000

235

236

Source: Company reports unless otherwise noted E: Estimate, NA: Not applicable, R: Retail operations only, CS: U.S. convenience store sales only.

16

Most

(88%)

of retail workers are “scared every day” as they clock in for work, and

72%

have experienced incidents in which staff couldn’t respond to a threat because their store was understaffed.

62%

And said they feel ill-equipped to deal with difficult situations.

Source: Pollfish’s 2024 Retail Worker Safety Survey

Walmart maintained its top ranking in the NRF’s “2024 Top 50 Global Retailers” report, with Amazon taking the No. 2 spot. Schwarz Group, Aldi and Costco Wholesale Corp. rounded out the top five.

Source: National Retail Federation

Nearly four-in-10 consumers return an item they purchased online at least once a month.

Nearly six-in-10

(57%)

shoppers admitted to engaging in fraudulent returns at least once.

Source: Narvar’s 8th annual State of Returns Report

SEPTEMBER/OCTOBER 2024

CHAINSTOREAGE.COM

COMMENTARY

Consumer Data Privacy Laws: What Retailers Need to Know

By Jade Davis

In recent years, there has been a significant shift in how governments and consumers view data privacy. Landmark regulations such as the California Consumer Privacy Act (CCPA) have set new data protection and consumer rights standards. These laws and others emerging in the U.S. and abroad are reshaping how retailers collect, use and protect customer information.

Key aspects of these regulations include: transparency in data collection and usage; consumer rights to access, delete and port their data; and strict consent requirements for data collection and processing. There are also hefty fines for non-compliance.

For retailers, this means a fundamental shift in how they approach customer data management — regardless of whether they operate solely in brick-and-mortar locations or have an omnichannel presence.

BRICK-AND-MORTAR RETAILERS While much of the focus on data privacy has been on digital platforms, brick-andmortar retailers are not exempt from these regulations. Physical stores collect various types of customer data, ranging from pointof-sale (POS) transaction data to video surveillance footage.

Retailers must ensure that all data collection practices comply with applicable privacy laws. Compliance includes providing clear notices about data collection, obtaining the necessary consent and Implementing robust data security measures. Consumer data privacy laws require retailers to ensure that data collected in-store is relevant, necessary and obtained with explicit consent or depending on the jurisdiction, an opt-out.

The collection and use of sensitive data, such as health information and biometric data, is subject to even stricter regulations.

Retailers that deal with such data — for example, pharmacies or stores using facial recognition technology — must be particularly careful.

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Key considerations for handling sensitive data include:  Enhanced consent: Explicit, informed consent is typically required for collecting and processing sensitive data.  Knowledge: Know what you collect; conduct regular inventories throughout your enterprise.  Data minimization: Only collect what is absolutely necessary for your business purposes.  Heightened security measures: Implement stronger encryption and access controls for sensitive data.  Special training: Ensure staff handling sensitive data are well-trained in privacy and security protocols.  Compliance with specific regulations: Retailers must comply with health data regulations like HIPAA in the United States.  Biometric information privacy laws: Some jurisdictions have specific laws governing the collection and use of biometric data.  The omnichannel approach of blending digital and physical presents unique challenges in data privacy and security management, such as ensuring consistent data protection across all channels while maintaining a seamless customer experience. It also entails managing customer consents and preferences across both online and offline touchpoints, and maintaining robust security measures for both in-store systems and online platforms.  Other considerations include implementing cohesive data governance policies that apply to all aspects of the business.

BEST PRACTICES To navigate this complex landscape, retailers should consider the following best practices:  Regularly assess your data collection and usage practices across all channels.  Incorporate privacy considerations into every aspect of your business operations and technology development.  Ensure all staff members understand the

SEPTEMBER/OCTOBER 2024

importance of data privacy and their role in maintaining it.  Implement robust security protocols, including encryption, access controls and regular security audits.  Create comprehensive, easy-to-understand privacy policies and make them readily accessible to customers.  Keep abreast of new and evolving privacy laws that may affect your business.  Appoint a data protection officer: Consider designating a specific individual or team responsible for overseeing data privacy compliance.  Be transparent with customers: Clearly communicate your data practices and the steps you’re taking to protect customer information. Have online and in-store privacy notices.

DATA SECURITY MANAGEMENT With online and mobile sales becoming increasingly ubiquitous, robust data security management is crucial. E-commerce components introduce additional vulnerabilities that retailers must address, including;  Payment Card Industry Data Security Standard (PCI DSS) Compliance: Ensure all online payment processes adhere to these standards.  Secure data transmission: Use SSL/TLS encryption for all data transmissions between customers and your servers.  Regular security updates: Keep all systems and software up-to-date with the latest security patches.

In an era where data breaches, misuse or lack of notice of use of a consumer’s personal information can severely damage a brand’s reputation, taking a proactive approach to data privacy is not just a legal requirement – it’s a business imperative.

Jade Davis is a partner at law firm of Hall Booth Smith in Tampa, where she focuses her practice on data privacy, cybersecurity, artificial intelligence, and construction technology.

17

FINANCE

How to Avoid a Restructuring Fail

Businesses advised not to rush through the Chapter 11 process

By Spence J. Mehl

The retail industry is grappling with a and constraints before negotiating to help financing, which leverages unpaid invoicwave of bankruptcies as some national foster cooperation and generate more faes to unlock funds. retailers struggle to remain afloat. Brands vorable outcomes. By acknowledging the The alternative is invoice factoring, such as Red Lobster, Express, Joann, landlord’s unique situation and demonwhich enables you to sell your outstandDavid’s Bridal and 99 Cents Only Stores strating a willingness to meet their needs, ing invoices to a third party at a discount are just a handful of companies that the likelihood of achieving beneficial to receive an advance of around 70-85% have filed for bankruptcy within the past lease terms for both the tenant and the of the invoice value. This approach year. These retailers faced challenges landlord increases, which is crucial for a provides immediate cash flow, but it such as shifts in consumer behavior and successful restructuring. involves a contract that could potenincreasing operational tially strain customer The key to successful restructuring lies in paying close relationships. costs — or have struggled to stay relevant and Alternatively, invoice attention to all aspects of the business — including adapt to changing market discounting allows a a company’s real estate portfolio — to ensure a dynamics. company to borrow Restructuring is a viable streamlined and effective turnaround strategy. against its invoices while strategy for distressed maintaining control retail companies as it creates an opportuSimultaneously, do not engage landover its sales ledger, offering regular nity to optimize the financial and operlords without first developing a clear uninjections of quick cash. Both methods ational aspects of a business to improve derstanding of your strategic objectives. significantly improve cash flow, addressprofitability. Real estate is a critical, yet Without this direction, the negotiations ing immediate financial challenges while often overlooked, component of retail will likely fail to address critical factors helping the retailer focus on long-term restructuring. that could influence your future success. recovery and growth.

Aligning real estate assets with sales For instance, if you are looking to expand performance by right-sizing stores and into new markets or downsize or optiChapter 11 Opportunities renegotiating leases can significantly immize your spaces, and the lease negotiator Beyond real estate restructuring, busipact the company’s bottom line. The key is unaware of this objective, it can lead to nesses should take full advantage of the to successful restructuring lies in paying missed opportunities or unsuitable lease comprehensive support and opporclose attention to all aspects of the busiagreements. tunities available through Chapter 11, ness — including a company’s real estate By understanding your business model, rather than rushing through the process. portfolio — to ensure a streamlined and including target market, operational Chapter 11 provides a framework that aleffective turnaround strategy. requirements and growth plans, it’s lows companies to systematically address easier to tailor negotiations for success. their financial challenges.

Real Estate Knowing the target market helps identify By utilizing Chapter 11, retailers can When it comes to evaluating a comthe locations that maximize customer reorganize their debts while continuing pany’s real estate portfolio, there is no reach and sales potential, while underoperations, renegotiate or eliminate one-size-fits-all solution, as the needs standing any unique operational reburdensome contracts, secure more faand circumstances of each asset vary quirements ensures that the space meets vorable lease terms, access new financing significantly. An individualized approach logistical needs such as layout, square options under the court’s supervision is equally important when initiating the footage and amenities. Awareness of and reduce overall debt. Taking these lease negotiation process. Avoid sending growth plans allows for flexibility in lease strategic steps can help retailers emerge a generic form letter to a landlord without terms, accommodating future expansions stronger and better positioned for future first having a conversation to understand or contractions. success. the owner’s perspective.

Spence J. Mehl is a partner at RCS Real This strategy can come across as Financing Options Estate Advisors, national retail real estate impersonal and dismissive, potentialIn addition to real estate strategies, advisory firm that provides tenantly damaging the relationship with the exploring financing options can provide centric portfolio strategies for complex landlord. Instead, create an open dialogue the much-needed cash flow to stabilize a environments. to understand the landlord’s priorities distressed retailer. One option is invoice 18

SEPTEMBER/OCTOBER 2024

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NEW CONCEPTS

Princess Polly Plots U.S. Store Growth Trendy, affordable clothing brand is expanding in brick-and-mortar

Princess Polly plans to open several new U.S. stores in the second half of 2024.

By Marianne Wilson The digitally-native Princess Polly is expanding her kingdom.

The young women’s apparel brand was born in 2010 true startup style — out of a beachside apartment on the Gold Coast of Australia by husband-and-wife team Wez and Eirin Bryett, who currently serve as co-CEOs. With its trendy and affordable fashions, Princess Polly has a strong Gen Z following and a high-profile online presence.

The company, which is now part of a.k.a.brands, entered brick-and-mortar in 2023, opening a flagship at Westfield Century City in Los Angeles. It plans to open four additional West Coast stores — at malls in Scottsdale, Ariz.; Santa Clara, Calif.; Irvine, Calif. and San Diego — in the back half of 2024 as well as one in Boston.

The outposts will feature more than 250 Princess Polly apparel items and some 200 accessories and footwear styles, with clothing prices starting at about $24. In keeping with the brand’s fun, socially savvy identity, the stores’ design elements will include walls decorated with selfie mirrors and colorful digital screens. The stores will also host exclusive influencer events showcasing the latest fashions, along with customer-focused events designed to grow the brand’s connection with its new communities beyond the digital world.

Chain Store Age spoke with Princess Polly co-CEO Eirin Bryett about the brand’s positioning in the marketplace and its plans for expansion.

Physical retail is a new business strategy for Princess Polly. What made the brand decide to take the plunge?

Our expansion into physical retail was in direct response to the demand of our CHAINSTOREAGE.COM

PHOTO: BUSINESS WIRE

customers. While our online presence continues to grow, we also recognize the desire for in-person Princess Polly experiences.

The excitement from our U.S. customers since the opening of our Century City store in Los Angeles has reinforced our decision to move into the physical retail space. Being accessible in-store not only enhances our existing customers’ experience, but also introduces Princess Polly to new audiences who can now discover and engage with our trend-driven styles for the first time in person.

How does Princess Polly stand out in what is a very competitive marketplace segment?

Princess Polly is committed to bringing the latest looks and viral styles to everyday trendsetters, both online and in-person.

Not only can our customers access their most wanted looks for the weekend, but they can get them fast, and with an unmatched customer experience.

Our physical retail store is also a reflection of what our customers know and love about the Princess Polly brand online. We are known for our iconic social media presence and [with physical stores] our customers can experience in-person what they’ve been watching through their screens all this time.

What is the real estate strategy?

The strategy is to meet our customers where they already are, providing a mix of locations in key regions that are easily accessible, convenient and appealing to our target audience. The retail shopping experience should be as seamless as online so it makes sense to be available in shopping locations customers would already regularly visit.

SEPTEMBER/OCTOBER 2024

Will the new stores reflect the LA location in their overall look and ambience?

The new Princess Polly stores will reflect aspects of the Century City location and we’re eager to further enhance the store experience with our upcoming locations.

We’ll be integrating more elements of our brand identity into our new stores with the goal of creating an engaging and interactive space that our customers will want to visit regularly. We’re excited to provide our customers with unique and memorable experiences.

What have been the biggest takeaways from your first store?

One of the biggest takeaways has been how much creating our social content instore really engages our online audience.

We’ve found that sharing authentic, behind-the-scenes moments, customer interactions, and in-store product demos really boosts our online engagement. It makes our online followers feel more connected and involved with our brand.

This approach has not only grown our social media presence but also brought more people into the store, creating a great cycle of engagement and growth.

Does the brand have long-term expansion plans in the U.S.? Will it be opening stores in global markets?

We have ambitious long-term expansion plans both in the U.S. and internationally.

We’re in the process of finalizing new locations in the U.S. for 2025 and are very excited to reveal these when the time comes.

Although our current expansion strategy is U.S. focused, we also have plans in Australia. This is part of our broader vision to make Princess Polly more accessible to our global customer base.

19

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TRENDING STORES Foot Locker has reinvented its store footprint with a new format designed to deliver an elevated shopping experience and showcase the brand’s leadership position in sneaker culture. The retailer’s “store of the future” format, which debuted at Willowbrook Mall in Wayne, N.J., has a streamlined, easier-to-shop layout, a more modern and distinctive environment, a bolder storefront, digital fixtures and other technological advances. Highlights of the new format include a communal try-on area, a “sneaker hub” offering specialized lacing and other customization options, and an upfront “drop zone” section spotlighting the latest sneaker releases and trending products. The design puts more emphasis on brand storytelling that enhances product presentations, allowing customers to better understand features and benefits — and find products faster. … Skims, the shapewear and apparel brand founded by reality TV superstar and entrepreneur Kim Kardashian, has landed in Texas. The company opened its third physical store, at the upscale Domain Northside shopping center in Austin. The 3,382-sq.-ft. outpost joins Skims locations in Miami and Washington, D.C.’s Georgetown neighborhood. More locations are planned for 2025, including a New York City flagship and mall locations in Houston and Atlanta. … The fast-growing Raising Cane’s, best known for its chicken finger meals, is celebrating its 28th birthday with a one-of-a-kind loca-

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SEPTEMBER/OCTOBER 2024

Foot Locker

tion. Situated in downtown Boston, the new restaurant (the brand’s 828th) boasts a gold theme, with gold walls, floors and seating. Even the Cane’s signature disco balls that hang from the ceiling are gold. The company is on track to open 100 new locations this year. … Foxtrot, the upscale urban convenience store chain that closed its doors unexpectedly in April, is making a comeback under the leadership of its co-founder. The company has reopened two stores in Chicago under the new Foxtrot Café and Market banner. Foxtrot is reopening with an expanded coffee experience and revamped food offering that includes a expanded, full-day menu featuring breakfast, lunch and afternoon offerings. The stores also feature the brand’s highly curated market assortment of the best new products from small and local makers. More locations are scheduled to reopen in Chicago and Dallas through 2025.

21

STORE SPACES

Costco’s Civic —and Green— Contribution The warehouse club retailer’s sprawling green roof provides vegetation and sports parks for residents.

By Tony Bouquot

Costco’s location in Mexico City’s Santa Fe neighborhood is topped with a 144,522 sq.ft. metal deck high-performance green roof.

As prime real estate in Mexico City’s Santa Fe neighborhood, Parque La Mexicana is a beautiful 70-acre public park featuring paved trails, vegetation, sculptures, fountains, restaurants and lakes as well as great views of the city skyline.

Focused on bringing visitors to the site and driving revenue, the park commission allows businesses to occupy up to 30% of the park’s footprint in exchange for fronting the association’s operating costs. In setting up shop with a new warehouse store, parking garage and loading dock, Costco Wholesale Corp. contributed to the park with what has been billed 22

as the world’s largest green roof.

Costco’s Santa Fe location features a 144,522-sq,-ft. roof that houses 10 native plants and 15 insect “hotels,” which are designed to accommodate the bees and other critters that help the greenery in the park to thrive. On top of the enormous store’s parking garage and loading dock is a public soccer field, two basketball/volleyball courts, a padel court and a children’s skate park. Each recreational feature is connected by walking, running and biking paths.

Creating such a unique commercial and recreational venue was no small task. Challenges included the

technicalities of landscaping the site so that the Costco structure appears largely concealed and coordinating with the metal building manufacturer that fabricated the warehouse. Othes included addressing the building’s structural and seismic issues, and meeting municipal requirements.

“Working on Costco Santa Fe, Mexico was both incredibly challenging and deeply rewarding,” said MG2 Architects’ Maribel Barba, AIA, who headed up the project’s design. “Integrating innovative solutions with community service meant that we were not only addressing the current needs of the city, but also

SEPTEMBER/OCTOBER 2024

CHAINSTOREAGE.COM

engaging with Parque La Mexicana to tailor solutions that were truly beneficial and sustainable.”

Structural Considerations The metal building portion of the Costco complex supports the extensive vegetated roof area, which helps reduce storm water runoff and enhances the building’s thermal performance. With no requirement to support foot traffic, MG2 was able to go with the same steel that is typically used in other Costco Warehouse projects.

The three-level parking deck, on the other hand, needed to handle the added structural load of the occupied sports courts. Consequently, post-tension concrete was chosen to support this and meet city restrictions on the structure’s height.

“Metal buildings are not as rigid as concrete and tend to move more. So per code, we needed to add a seismic gap between each building type.”

Three Interconnected Buildings The large Costco facility is designed as Landscaping three interconnected buildings: a metal Driven by a goal of treading lightly on building for the retail warehouse, a the land and blending into the park as post-tensioned concrete parking garage much as possible, the team planted small and a loading dock of conventional berms, called Montañitas, around the concret metal decking. walls. The plantation does a remarkable Costco regularly builds out its stores job of camouflaging the buildings. with metal buildings for a number of “If you are standing in Parque La reasons. For starters, speed to construcMexicana, you would never realize there tion is a big one. Whereas conventional is a Costco right underneath the park big box store construction can take extension,” said Barba. up to 180 days, a The green screens metal building, with Costco’s Santa Fe location features a 144,522-sq,-ft. roof are a beautiful extenits foundation, can that houses 10 native plants and 15 insect “hotels,” which sion of the building generally be erectand offer the dual are designed to accommodate the bees and other critters benefits of natural ed in around 110 days. The design ventilation and daythat help the greenery in the park to thrive. team worked with lighting throughout the building manufacturer, Butler “This is a very efficient design that the interiors. As the vegetation grows, Manufacturing, and Span Construction utilizes less concrete than other common the façade dynamically changes, lending and Engineering. concrete structures while still holding an ever-evolving appearance.

In addition, a watertight metal roof heavy loads from the sport park,” Barba Another interesting feature is the enables the MEP installations to proceed said. “The thickness of the floors is a rooftop’s siphonic drainage and gravity simultaneously with the completion of little over 5 inches, which is quite thin drainage systems, designed to collect and the exterior details. A metal building compared to other concrete structures.” send rainwater runoff to help sustain the system is also typically chosen because For the third “building,” the loading park’s fountains and lakes. In addition, the structure is considered affordable, dock below the skate park, the design a wastewater treatment system produces durable, strong, versatile, lightweight team had to figure out how to create greywater for reuse. This decreases the and sustainable. a large enough column-free space to building’s water consumption and helps “The structure is made from 80% recy- enable a semi-truck to drive in, unCostco meet the municipal regulations cled steel. This minimizes the amount of load its stock, make a U-turn and exit within this drought-sensitive location. material utilized,” explained Barba. “In the building. To solve this issue, MG2 As one of the most gratifying projects addition, the decreased thermal mass of ended up custom fabricating a 90-footshe has ever worked on, Barba recently the metal building reduces heat absorplong, 12-foot-tall beam to support the returned to the site, appreciating the tion, as compared to a typical masonry structure while providing the required beauty of the green roof and the comblock wall.” clearance and maneuverability. munity activity taking place.

The design team worked with the metThe remainder of the receiving area is “That filled me with an immense sense al building supplier to specify and size comprised of metal steel columns and of accomplishment, knowing that our the columns, beams, roof joists, roofing conventional concrete metal decking. efforts created a space that enriches lives panels, integral gutter system, wall girts Another important aspect of the projand fosters a strong community spirit,” and metal wall panels. ect was meeting Mexico City’s strict seis- she added.

Leveraging the system’s ability to mic requirements. Because the Costco Tony Bouquot is the general manager of the support large spans between the rafters facility is comprised of three different significantly decreased the quantity of building types, a seismic joint had to be Metal Building Manufacturers Association, joists and columns needed to structuradded in between each of the buildings which provides leadership, research ally support the system. Consequently, to accommodate their varied reactions and education to help builders, owners, Costco patrons enjoy a more seamless to intense vibration. architects, developers and others understand shopping experience with few columns “In an earthquake, concrete and metal the value of metal-building systems for lowdisrupting the aisles. move very differently, explained Barba. rise, non-residential construction.

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SEPTEMBER/OCTOBER 2024

23

STORE SPACES Q&A

The Right Image: Managing barricade, graphic installations

By Marianne Wilson In today’s hyper-competitive landscape, optimizing the branding potential and functionality of retail spaces is more Adam Acosta, important than ever director of sales and — and that includes marketing, Boston temporary barriRetail Solutions cades and graphics.

Chain Store Age spoke with Adam Acosta, director of sales and marketing for Boston Retail Solutions, who discussed how the company’s approach to temporary barricades and graphics saves time, reduces frustration and ensures a smoother process for everyone involved.

What new trends are you seeing in retailers’ use of graphics?

We’re seeing less busy design graphics and more full-scale images that really capture the attention of passersby. We’re helping retailers print large-scale images of models or celebrities endorsing their products.

Inside the store, brands continue to embrace silicone edge graphics that are printed on beautiful fabric. They are very low in cost to ship and easy to install.

What about temporary barricade solutions — are there any new trends there?

More and more barricades are taller than previous years. Storefronts in malls are growing in height, and we find our teams installing 16-ft. to 20-ft. tall barricades now as opposed to the standard 12-ft. in years past. We have patented bracing systems to ensure the barricade goes up quickly, and stays secure during the remodel.

We’re also seeing the need to provide multiple service trips on a storefront remodel due to the use of new glass 24

installation machines. The machines are very large and require the barricade to be opened up so that the robot can install the glass. This works very well with our modular system, but it would be virtually impossible with gypsum walls.

Technology has helped us be more efficient in our offerings. With our proprietary BRIX platform we can share real-time data with our clients so that they don’t have to wait for information or pictures from the field.

Tell us a little about Boston Retail Solutions and the products it provides.

We’ve been in business for more than 30 years and have an incredible list of clients from Apple to Zara. We also are employee-owned by a team of 250 outstanding people.

Our focus is to provide clients with outstanding service so that they can remodel or open new retail stores quickly and easily. The main products we provide are modular barricades, printed graphic wall murals, light boxes and interior store graphics.

We have a few different types of modular construction barricades, with the biggest difference being the duration of use. For example, if a customer needs to cover a space for a long period of time, we have a sustainable solution that is more cost effective and faster than traditional drywall methods.

Can BRS help a retailer with its sustainability commitment — are there sustainable options for barricades?

Absolutely! Our reusable modular barricade system helps eliminate thousands of tons of construction waste from landfills every year. If retailers use single-use solutions such as drywall barricades for each project, they are throwing away thousands of pounds of waste. Most walls go to the landfill with the wrap still on it meaning that the brand’s name is literally printed on the waste.

What is the coverage area?

We cover all of the United States and Canada.

How does BRS’ single-source offering benefit customers?

Since we are a full-service barricade and graphic company, our customers save time and headaches because they don’t have to work with multiple vendors. We really save frustration in the coordination of the construction of the wall and the marketing piece with the graphics. Oftentimes, the two departments have disconnects. But by outsourcing their barricade needs to us, we save our customers dozens of hours connected to barricade and graphic deployment.

Does BRS provide installation and teardown services?

Yes, our barricade service is turnkey. We help clients lay out, install and wrap in graphics. We also remove them when they’re ready to open their beautiful new store.

Has technology affected your offerings?

What advice do you have for a retailer that needs a barricade solution?

Get in touch with our team. We have dedicated account managers standing by to help take barricades and graphics off of your list and onto ours. We can help with the entire process. Once retailers learn all that we can do for them, and the time we save them, they wish theyhad found us years ago.

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STORE SPACES

Walmart Makes History Retail giant uses 3D printing for store addition

By Dan Berthiaume Walmart Inc. can now lay claim to having the largest freestanding, 3D-printed commercial concrete structures in the United States.

In a first-of-its kind construction project, the retail giant undertook a project with 3D concrete printing company Alquist 3D to print a nearly 8,000-sq.-ft. addition to its store in Athens, Tenn., with the expansion used to enhance its online pickup and delivery program at the store. The addition boasts 19’4”- high walls, making it among the tallest, seismic-ready, 3D concrete-printed structures in the world.

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The project marks the first time Walmart has utilized 3D printing technology at this scale.

“Walmart is always looking to innovate and leverage developing technologies, and we looked at several new building methods and companies for this project,” said Mike Neill, VP of new construction for Walmart. “Alquist presented the best ability to work with due to their deep knowledge of 3D materials, robotics, and desire to take on an ambitious and unique project.”

Walmart also views its decision to use 3D construction printing as aligning with its broader goal of becoming

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more environmentally friendly. Based on the results of the 3D project in Athens, Walmart plans to launch a second initiative with Alquist in the near future. ““This is the first such facility of its kind and it’s just incredible that it is a reality,” said Zachary Mannheimer, founder and chairman of Alquist 3D, which is based in Greeley, Col. “This is going to play a major role in the advancement of 3DCP technology.

And for Walmart to see the value in this project demonstrates how forward-thinking the leadership of this organization is.”

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STORE SPACES

Ace Unveils Experiential Store format Hardware giant to invest $1billion in remodels, new stores

By Zachary Russell Ace Hardware has unveiled an experiential store concept designed to enhance the customer shopping experience while also driving store growth.

The hardware chain will begin rolling out the new concept, dubbed “Elevate3 Ace, in January. The format puts a spotlight on the retailer’s best and most exclusive brands by giving them immersive brand shops within the store, while also enhancing customer service.

The flagship model features an outdoor space —complete with a goods display and grilling space for demos and events

— that aims to provide an aspirational backyard experience.

During the next five years, Ace plans to invest more than $1 billion in opening new stores and remodeling existing stores, with Elevate3 Ace being at the heart of the investment. The company hopes to bring the concept to 1,900 locations during the next five years.

Dale Fennel, VP of merchandising at Ace Hardware, told Chain Store Age that the new concept offers customers a more experiential, in-depth shopping experience.

“We tried to create a unique shopping experience that can’t easily be replicated online or in-store anywhere,” he said.

“We have a small number of our best, most-exclusive brands that really have been fueling most of our growth, and so we set out to elevate those brands.

This is a fundamental change in the Ace store model.”

Ace is the world’s largest retailer-owned hardware cooperative, with over 5,900 locally owned and operated hardware stores in approximately 60 countries.

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REAL ESTATE

Regency Centers’ MidtownEast center in Raleigh

Rents are on the rise in grocery-anchored centers

Restaurants and personal service providers--as well as off-price retailers—are flocking to neighborhood retail properties.

By Al Urbanski Top neighborhood center operators are on a buying spree in this stalled era of retail real estate construction.

The nation’s biggest owner of grocery-anchored centers, Kimco, closed on a $2 billion acquisition of RPT Realty’s 13 million-sq.-ft. portfolio at the beginning of 2024, a buy that included the CHAINSTOREAGE.COM

Mary Brickell Village center in Brickell Village, Swire’s billion-dollar-plus development that has transformed Miami’s financial district into a luxe residential and retail neighborhood.

The RPT acquisition was part of a joint venture with Singapore-based wealth fund GIC, which has committed to

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investing half-a-billion dollars to acquiring open-air centers in the United States.

“In an environment marked by virtually no new supply, strong demand from new, recurring, traditional, and non-traditional anchor and small shop tenants, along with the resilient consumer, we continue to produce strong operating 27

REAL ESTATE

results,” said Kimco CEO Conor Flynn on the company’s fourth-quarter 2023 earnings call.

Small-shop occupancy throughout Kimco’s 560-center-plus portfolio, said the report, had reached an all-time high in excess of 90%, and renewal rates were at their highest levels.

“Our combined spread of 13.4% is the highest in six years,” Flynn said.

Kimco’s recent focus has been on properties in the Sun Belt, a region it took greater hold of with its 2021 acquisition of Weingarten Realty. While it has not been actively constructing new centers in the region, it has partnered with residential developers to make self-sufficient communities of their centers in suburban areas.

“In first-ring suburbs, you have the ability to create an environment in which people can live and shop and have all the amenities they desire at their fingertips,” Kimco president and chief investment officer Ross Cooper told Chain Store Age. “It’s really exciting to be working in the retail real estate industry. It’s very dynamic,” Ross said. “The key is having the ability to re-adapt. Seventy-five percent of our landmass is non-income-producing parking lot. When you have the ability to create a center with residential space and strong entertainment and food and beverage options, and customers living on-site, it’s really a winning combination.”

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incinnati-based Phillips Edison & Company [PECO], which owns and operates more than 300 grocery-anchored centers nationwide completed over $275 million worth of center acquisitions in 2023 and is on track to hit close to the same number in 2024.

“This is one of the best operating environments we’ve seen over the last 20 years. New leasing spreads were 34%.

Renewal spreads are as high as 20%,” said PECO’s president Bob Myers. “There’s a lack of new supply. Rents will have to go up by forty-to-fifty percent over the next eight to 10 years to justify any meaningful new development.”

Sales and foot traffic in PECO’s portfolio, including at fast-casual restaurants, supermarkets, and medtail tenants are strong, with a 5% increase year-to-date, year-over-year.

With available retail space and new construction at its lowest levels in the 20 or so years, Myers said that top national chains are currently attempting to lock in new locations for 2025 through 2027.

“Retailers are getting more creative with their store sizes and value engineering space, and they’re moving into new, emerging markets,” Myers noted. “TJX is doing that with Home Goods, Sierra and TJ Maxx.”

As Kroger’s largest landlord and Publix’s second-largest landlord, PECO puts lots of thought into filling its centers with leading brands—something it now finds itself doing with important necessity-based goods and services.

“Lots of due diligence goes into making the decisions as to 28

At Philly’s Andorra Shopping Center, it’s “Goodbye, Acme” and “Hello Giant!”

The Supermarket Switch “Grocers set the tone for shopping centers in so many ways,” says Jeffrey Fisher, VP of regional leasing at Federal Realty.

“It is of absolute importance to get the grocer right at a center, and it’s not an inexpensive deal to make,” he noted. “You have to ensure that it’s the right concept for the market and serves the demos of the community.”

At Federal’s Andorra Shopping center in the Roxborough section of Philadelphia, the longtime grocer was Acme, and the grocer wasn’t right. So Federal tore up its lease and will invest more than $25 million to build a 50,000-sq.-ft. Giant supermarket and reposition 30,000 sq. ft. of existing retail at the center.

“It’s a mature market, true to its roots, but 17 new residential developments have gone up in the neighborhood over the last three to four years,” Fisher noted. “The Acme was undersized, and we have done really well with Giant at three other centers in Philadelphia, so we’re building them a 50,000-sq.-ft. store in which we estimate we will generate almost four to five times the volume.”

Three years ago, Federal renovated Andorra, adding new facades as well as national brand tenants the likes of T.J. Maxx and Five Below.

“There’s no Whole Foods or Trader Joe’s in this market,” said Fisher, “so this will cause a huge buzz.”

which restaurants—national, local, or regional—we put in our centers,” said Myers. “Without question, restaurant buildouts cost more than buildouts for a traditional retailer. But what we’ve found is that they’ll do longer terms because they’re investing a lot of money.”

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t least one leading grocery-anchored center developer, Regency Centers, remains busy building as well as buying new centers.

The average household income across the company’s portfolio of 482 centers in the U.S. is $150,000, and it has been a placemaking trend-setter, building or renovating properties that are laid out with green spaces and walkways that conform to its “Fresh Look” site plans. It has some 50 redevelopments and new developments currently underway.

One prime example is the 167,000-sq.-ft., Kroger-anchored Market at Springwoods Village in Spring, Texas. Near the headquarters of Exxon Mobil and Southwestern Energy, the neighborhood-focused center includes parks, patios, and a bike path. Its food and beverage lineup is large and varied with such choices as Jinya Ramen Bar, Cava, and Torchy’s Tacos. Personal service tenants the likes of Nails of America, SEPTEMBER/OCTOBER 2024

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Phillips Edison’s Cascades Overlook Center in Sterling, Va.

Supercuts, and Memorial Hermann-GoHealth Urgent Care, too, abound.

Examples of ground-up developments under construction include the 79,000-sq.-ft. Oakley Shops at Laurel Fields in California and the 152,000-sq.-ft. Cheshire Crossing in in central Connecticut that will feature the only Whole Foods store within 20 miles.

“Food and beverage has served as the new activity in our centers, but also the higher move-out.”

Alan Roth, COO of Regency Centers

“Cheshire Crossing is a great example of how Regency is remaining active in the region, and how we can leverage our experience and retailer relationships to develop best-in-class shopping centers from the ground up,” said Rebecca Wing, Regency’s VP of investments. “We have a long history and working relationship with Whole Foods Market, and we look forward to demonstrating continued success as long-term stewards of this shopping center.”

Regency takes great care in developing food and beverage lineups that will have wide appeal to the high-income populations of its markets.

“Their sales volumes remain strong. Their ability to grow rents remains strong,” said Alan Roth, Regency’s East Region president and COO. “Food and beverage has served as the new activity in our centers, but also the higher move-out.”

Also finding favor across Regency’s portfolio are off-price brands such as TJX concepts, Five Below, and even Nordstrom Rack. Often, they claim endcap locations that restaurant CHAINSTOREAGE.COM

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brands have long insisted on.

“Now some restaurants have to go in-line and there’s a tremendous amount of flexibility for us,” said Roth.

CoStar, the commercial real estate data provider, has noted that tenant lists in neighborhood centers have become more service-oriented.

“Health care, food services, wellness, medical…services have become major players in grocery-anchored centers,” said Brandon Svec, CoStar’s national director of retail analytics.

“But Ulta, Burlington, and TJX are scooping up stores left and right in those centers, as well.”

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hris Wilson, JLL’s national retail agency lead, thinks that the neighborhood shopping center is the most sought-after retail environment in the industry right now.

“One of the more interesting developments in the traditional grocery store business is their willingness to be flexible with their formats,” said Wilson. “When mixed-use centers started getting built, they were very rigid with their retail lineups.

Grocery-anchored centers got more flexible and did a lot of deals.”

JLL’s Income Property Trust is an institutionally managed REIT that owns and manages a diversified portfolio of industrial, office, and retail properties, primarily in the United States. All of its retail investments are invested in grocery-anchored properties, based on two key premises: They should remain resilient to the impact of e-commerce, and they should continue to be a defensive sector that will deliver stable returns through adverse economic environments.

And they should, until the day retail space construction picks up, continue to draw great interest and high purchase prices from investors.

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Brokers looking for space have been tracking Big Lots lease expiration dates for years.

Despite Tight Space, Brands Keep Expanding

Class A retail space is 94% occupied, so growing chains are depending on second-generation space.

By Al Urbanski Consider the following …

Spirit Halloween plans to have a record 1,525 locations open in the United States this fall. Sprouts has plans to open 21 new supermarkets by year’s end. Houston TX Hot Chicken expects to debut 75 new franchises by the end of 2025. And Ace Hardware opened a record 111 new locations in the first six months of 2024, reaching the 5,000-store milestone.

Meanwhile, CoStar’s September 2024 Real Estate Update reported that a mere 4.5% of total U.S. retail space was available for lease at the end of August— and that available retail space has decreased by more than a third over the past decade with more than 310 million sq. ft. either leased or pulled off the market.

New construction remains at a near 30

standstill due to high interest rates and high construction costs. Three-quarters of the space available today was built prior to 2000 — only 11% of it was built after 2010. Just 6% of the Class A space preferred by national and regional retailers is currently open to rent, leading them to consider fulfilling their expansion plans in widely available Class C spaces they have traditionally shunned.

And yet, somehow, retail expansion continues apace.

“Retailers are getting it done, somehow, some way,” said Brian Katz, CEO of Katz & Associates, a retail real estate services company that represents hundreds of landlords and tenants in the eastern half of the United States.

“They’re expanding into new markets,

going into smaller markets and making better economic deals,” he continued.

They’re flexing on store size and finding ways to put themselves at the top of the list when space becomes available. There are a lot of big box tenants coming off leases and doing short-term renewals, so landlords are doing long-term deals with higher-quality tenants.”

A big part of the expansion game in our limited-space retail world is staying ahead of the trends.

“We’ve been watching Big Lots for two years, tracking expiration and adoption dates,” Katz said. “It gives you a head start in terms of the review process. Getting people to the site. Getting due diligence done.”

And getting higher rents paid.

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“Rent increases are ranging up from 7% to 12%,” Katz noted. “Retailers are selective about paying higher rents where they don’t think traffic will support it, but most national brands have thought about everything. It’s all about having the right information, whether you’re paying $20 or $12 per square foot.”

Investors regale retail JLL’s national retail agency lead expressed sympathy for brokers like Brian Katz.

“They’ve had a hard time keeping everybody fed due to not having a lot of space to lease,” said Chris Wilson, who sold his Los Angeles-based brokerage to JLL in 2015. “Investors in retail space, however, have never had it this good.”

Indeed, retail real estate, shuttered and shunted to the sidelines by online shopping during the pandemic, is now the strongest investment in commercial real estate. In August, retail real estate re-emerged as the No. 2 CRE class with a value of $3.03 trillion and a nationwide occupancy rate of 96% Multifamily retained its No. 1 standing with a value of $4.51 trillion — though that number is the current low point of a swan dive from a $6 trillion worth recorded in 2021.

“There’s been very little development in square footage of retail space over the past four or five years, and that’s been in the face of an incredibly aggressive consumer coming out of COVID,” noted Wilson.

Aggressively expanding retailers, then, concluded Wilson, are going to have to depend on more second-generation space coming available in order to hit their store count targets. He asked JLL’s research team for an estimate of how much vacated space might become available over the next few years and got a number of 70 million sq. ft.

“Sears has shown that their buildings can be very efficiently subdivided for big box tenants. They can slice and dice their spaces for adaptive re-use,” he said. “So you’re going to see a growing trend of second-generation space getting leased, CHAINSTOREAGE.COM

CoStar’s Brandon Svec

CoStar: Prime retail real estate options dwindle Are fast-expanding retail chains hitting their numbers by settling for sub-par locations?

“The reduction in available retail space, combined with limited new construction, has led to a highly competitive market for prime retail locations,” said Brandon Svec, national director of retail analytics for CoStar, the commercial real estate data provider.

Retail availability has decreased by 35% over the past decade, with more than 310 million sq. ft. either leased or removed from the market. Two-thirds of that space reduction took place over just the last three years, according to CoStar’s September retail sector report.

Retail construction is at its lowest levels in 15 years due to high interest rates and construction costs. CoStar noted that 75% of currently available retail was built prior to the year 2000. Only 11% of it was built after 2010.

Higher-valued retail real estate in high-income neighborhoods is incredibly hard to find. Just 1% of the available space tracked by CoStar can be found in areas with average household incomes topping $100,000.

Sixty percent of the retail space currently available resides in areas with incomes below the national average of $75,000.

“Prime retail locations will remain scarce, making it harder for retailers to expand into desirable markets,” Svec said.

and you’re going to see new development happening as interest rates back off.”

Wilson says he finds developers very optimistic about development money

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flowing into the retail sector, but worries that, over time, the industry could be in danger of returning to its “overbuilt and under-demolished” standing.

“The investor money fills an imbalance, but there’s a possibility that we could at some point find ourselves with too much space,” he said. “Still, I’m really, really optimistic that retailers will find all the space they need.”

Restaurants on a roll One retail sector that every landlord pays close attention to these days are food and beverage brands. From Jersey Mike’s to The Habit Burger Grill to chef-driven white tablecloth restaurants, top eateries can command steady traffic across several dayparts.

This year, Raising Cane’s celebrated 28 years in business with the opening of its 828th restaurant on Aug. 28 in Boston.

Jersey Mike’s has embarked on a 300-store expansion in Canada. And Chick-fil-A announced it plans to have 25 locations operating in Puerto Rico by 2030.

“In everything that we’re involved in in leasing and development investment, one of the most important things is the F&B execution,” said Mark Masinter, chairman of global retail at Newmark Retail Services. “In our minds, the way you create culture is with food and beverage.

Still, if you’re not careful, the potential for failure in food and beverage is massive.”

That’s because buildout costs are high.

Ovens, grease traps, and dishwashers aren’t cheap. However, broker Stuart Zall, president of the Denver-based Zall Company, said that landlords are willing to invest in the cost because they’re quickly signing a new tenant as soon as the other one departs.

“We haven’t seen a ton of restaurants going out of business,” Zall said. “As soon as someone closes, the space gets gobbled up right away by another restaurant.”

According to data compiled by Yelp, restaurant openings increased by 6% between May 2023 and April 2024 compared to the previous year period.

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TECH VIEWPOINT

Every Tuesday

Delivery, AI and Resale Trends Shake Up Retail

The premier newsletter showcasing technology and multi-channel, seamless retailing.

Seasons change, and so do retailers’ technology initiatives.

Fall is here and along with football-themed promotions and the insertion of pumpkin spice flavor and aroma into virtually every product, it marks the emergence of retail technology trends worth keeping an eye on.

Three retail technology trends are having an impact on enterprise activity this fall: automated delivery, proprietary artificial intelligence and resale.

From e-commerce and mobility to in-store technology and social media, Connected Retail keeps retail executives in the know about the fast-paced, ever-evolving world of retail tech.

Sign up TODAY! www.chainstoreage.com/register

Automated Delivery The idea of delivering online orders via robotic vehicles is nothing new. However, the automated delivery space heated up during the summer and continues to operate at high temperature as holiday season e-commerce begins.

Drone technology is one of the most talked-about automated delivery solutions.

And now that Amazon has received Federal Aviation Administration permission to fly its Prime Air delivery drones beyond the visual line of sight of the pilot and Walmart is enabling select drone delivery orders directly in its app, other retailers will surely follow. Some smaller retailers already have: Quick service restaurant chains Panera Bread and Jet’s Pizza recently launching delivery via Zipline drones in select markets.

Sidewalk robots are also a burgeoning automated delivery platform, as evidenced by recent rollouts from a variety of quick-service restaurants and online delivery platforms.

Resale Whether motivated by sustainability concerns or a desire to save money (or both), consumers keep turning to an expanding roster of resale providers that should only grow bigger as the holidays approach.

As with proprietary AI, Amazon and Walmart both offer robust used goods marketplaces. But Dick’s Sporting Goods has been building on its collaboration with SidelineSwap, an online marketplace for new and used sporting goods. Even tony Bloomingdale’s has entered the resale market via an omnichannel partnership with luxury resale platform Rebag.

A resale sub-trend worth keeping track of is retailers adding star power to their resale efforts by joining forces with celebrities emptying their closets. Recent examples include rock icon Elton John partnering with eBay in a charity resale event called “Rocket Man Resale” that benefited the Elton John AIDS Foundation, as well as used furniture platform Kaiyo selling more than 100 pieces of furniture from Sonja Morgan, of Bravo TV’s “Real Housewives of New York” fame.

Proprietary AI AI is an undercurrent through almost everything happening in retail right now, but retailers developing their own proprietary

Dan Berthiaume dberthiaume@chainstoreage.com

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platforms is a hot topic this fall.

Amazon and Walmart were both early proprietary retail AI players and have been steadily building upon their AI foundations.

But they are operating in an increasingly crowded environment.

Notably, Apple recently unveiled a proprietary AI system called Apple Intelligence that the company is positioning as focused on the needs of individual users. Apple said the new platform combines generative AI with “personal context” to deliver “useful and relevant” capabilities, using on-device processing.

Also, China-based global e-commerce giant Alibaba plans to debut an AI-powered conversational sourcing engine aimed at small-to-midsized businesses this month.

Even global cosmetics conglomerate Estee Lauder is getting in on the action via a recently launched initiative with Microsoft to create an AI Innovation Lab to develop solutions for Estee Lauder’s more than 20 beauty brands.

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TECH

Amazon VP Discusses Expansion of Just Walk Out Technology rolling out to more stadiums, college campuses

By Dan Berthiaume often time-constrained, so we see the technology resonate there. We’re also starting to see that in other areas as well. For example, hospitals are another place where Just Walk Out is taking off. There are doctors and nurses with busy schedules that are trying to get food.

Amazon’s Just Walk Out tech enables frictionless checkout.

Amazon is actively expanding the presence of its Just Walk Out frictionless shopping platform in stadiums and universities.

Based on generative AI technology, the Just Walk Out shopping platform uses computer vision, sensor fusion and deep learning technology to enable customers to take what they want without having to stop to check out. It detects what customers take from — or return to — the shelves.

Chain Store Age recently spoke with Jon Jenkins, VP of Just Walk Out technology at Amazon, about the company’s ongoing efforts to bring the solution to stadium concessions stores and college campuses. [The stores referenced below are not Amazon-operated stores but are stores deploying the company’s Just Walk Out technology.]

How does RFID enablement enhance the Just Walk Out model?

RFID-enabled stores are a new Just Walk Out store format used to sell apparel and fan merchandise within stadiums. These types of products have been a challenge in the past for other computer vision-based stores, because the products can look visually similar but have very different prices.

For example, a small and an extra-large jersey might have different prices, and Amazon’s Just Walk Out RFID solution makes that an easier problem to solve while making it less important for the store to remain organized.

About 15 minutes after the doors open in a stadium merchandise store, it looks like a tornado has gone through there. In an RFID-enabled Just Walk Out store, that’s not a problem at all.

What are some of the unique advantages that Just Walk Out offers in a stadium or collegiate setting?

Stadium concessions are focused on getting the customer what they need as quickly as possible. That’s a common theme across both universities and stadiums. When you’re at a game, your primary purpose is to see the game. When you go to a Just Walk Out store, you want to get in and out fast, and it’s a perfect solution for that.

Similarly at universities, students are

How have stadiums and universities responded to Just Walk Out? We have been seeing improvement over time in the performance of these stores, which is leading to increased adoption.

A good example is Lumen Field in Seattle. In 2022, the first year we opened stores there, the number of shoppers was up 60% and sales were up about 100%.

By 2023, the number of shoppers was up by 85%, with sales up 112%. This year, we’re opening six new stores there, which will give us a total of 15 stores, because

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the Seattle Seahawks and Lumen Field see how well these stores are performing over time and they want to keep adding more.

Also, a lot of the newer stadiums, instead of opening one store their first year, are going all in from the start. We are opening seven stores right out of the gates at Commanders Field in Washington, D.C., this year.

And it shouldn’t be surprising that universities have caught on so quickly, since students are early technology adopters in general. Some of the busiest Just Walk Out stores are on university campuses where students love the fact that they can have access to food and other things they need at all hours of the day.

Looking ahead to the next six to 12 months, what do you see happening with Just Walk Out? One of the areas where we will continue to expand and improve the technology is in ways to pay. Universities are a good example. Sometimes students have meal plans, which are often run by a third-party company. We have added the capability for students to use those meal plans in the Just Walk Out stores so they can take advantage of the money they already have available to shop there.

We will continue to add more ways to pay. In stadiums, season ticket-holders may have a certain amount of spend per game that’s pre-funded. Supporting things like that are really important for us.

In addition, the variety of items that can be sold in a Just Walk Out store continues to expand. Each year, we increase the capabilities of the technology to support a broader product selection, with our goal being that someday anything you could ever want to buy in a store could be sold using Just Walk Out. 33

TECH

Stores Get “Smarter” Retailers using AI to improve store operations

By Dan Berthiaume The brick-and-mortar store is alive and well. While rates of e-commerce and particularly mobile commerce to climb, the overwhelming majority of retail sales transactions continue to occur in stores.

The modern store environment is now “smarter” than ever, thanks to the increasing ease with which retailers can connect brick-and-mortar stores to AI solutions that streamline everything from checkout to customer service to associate training.

Let’s take a look at how Sainsbury’s, Target, Tractor Supply Company and Wendy’s are all making different aspects of their store operations a little smarter with AI. Sainsbury’s: The U.K.’s second-largest supermarket retailer is transforming store operations as part of its broader “Next Level” business development strategy.

Sainsbury’s is rolling out the NCR Voyix Commerce Platform, POS solutions and self-checkout systems to 22,500 checkouts across its supermarkets, convenience stores and gas stations.

The seven-year implementation agreement expands the grocer’s more than 20-year strategic partnership with NCR Voyix. Leveraging NCR Voyix hosted cloud technology, Sainsbury’s will receive real-time data and analytics on store operations while also utilizing AI to better analyze sales, estimate future store performance, improve productivity and manage cash.

As a result of the rollout, Sainsbury’s hopes to obtain the flexibility to adapt to market trends in its stores more quickly with its enhanced AI-based analytical capability. The new platform will also enable employees to approve transactions remotely via tablet, which Sainsbury’s 34

hopes will speed up the checkout process.

And AI-based self-checkout terminals will deliver personalized promotions uniquely tailored to each customer.

Target: Target Corp. is rolling out a new proprietary generative AI chatbot called Store Companion that will help store associates answer customer inquiries, answer on- the-job process questions, coach new team members and support store operations management.

The new chatbot will be available as an app on specially equipped handheld employee devices, providing immediate answers to their questions about processes and procedures. For example, associates can input prompts such as “How do I sign a guest up for a Target Circle Card” and “How do I restart the cash register in the event of a power outage” and receive instructions and resources in seconds.

The tool is also designed to serve as a store process expert and coach, helping new and seasonal associates learn on the job. In developing the new chatbox, Target used actual frequently asked questions and process documents from its store teams across the U.S. Currently, Target is piloting the solution at about 400 stores, using feedback from the teams to improve the experience ahead of the chainwide rollout.

According to Target, early feedback is positive and since the pilot began, experienced associates have helping shape the tool.

Tractor Supply Company: Retailers are also using AI to improve store operations at the management level. Tractor Supply Company, the nation’s largest rural lifestyle retailer, has rolled out the CoPilot AI platform from store operations

technology provider Quorso in an effort to simplify daily work for store-level and field managers while driving sales, customer service and other key in-store performance indicators.

The solution provides store and field managers with personalized, top-priority actions and intelligent workflows designed to improve store operations.

These data-driven insights can address a wide range of issues including out-ofstock inventory, planogram execution, product attachment and customer service.

In addition, the solution provides managers with a real-time view of the results of their actions. This deployment is part of a larger effort to improve store operations and customer experience with advanced technology.

Wendy’s: The Wendy’s Company is building upon a pilot of artificial intelligence and hybrid cloud drive-thru technology at its restaurants. In October 2021, Wendy’s first announced plans to utilize Google Cloud data analytics, AI, machine learning, and hybrid cloud technology, such as speech-to-text and Google search and maps, to create new ways customers can order food via touchpoints, including drive-thru and mobile device.

More recently, Wendy’s moved into pilot with the “Wendy’s FreshAI” platform based on Google Cloud’s generative AI and large language models technology. FreshAI includes Google Cloud solutions such as the Looker business intelligence and analytics tool, as well as the Anthos modernization platform.

Since December 2023, it has expanded the FreshAI rollout to 28 corporate restaurants in Ohio and Florida.

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