JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
QUOTE OF THE WEEK: “…if you are using a shovel to dig yourself into a hole, a credit card company will be happy to give you a backhoe.” - Jason G. Miller
HUMDRUM BLACK FRIDAY MEANS MARKDOWNS WILL PROBABLY RAMP UP Heading into the holiday shopping season, most retailers were preparing for what was likely going to be a humdrum holiday. While holiday sales increased 5.3% in 2022, the National Retail Federation was only predicting them to increase by 3.0% to 4.0% this year. Investment bank TD Cowen predicted growth would be even slower—between 2.0% and 3.0%, reflecting the greater trend of slowly eroding retail sales growth that has occurred over the past year. Though October’s retail sales figures were still up 2.5% on an annual basis, they reflected a monthly decline of -0.1% from where they had stood in September. This was the first time in seven months where monthly totals had faltered, though most economists had been expecting this trend to begin going back a few months. It has been two years since inflation first began to climb (it jumped from 2.6% to 4.2% in April 2021) and more than a year since it peaked (at 9.1% in June 2022). Yet, retail sales, as measured annually, have not been in the red once since 2020. In fact, in 2021 this number this metric averaged being up 19.0%, in 2022 it averaged 9.8%, and so far in 2023 it has averaged 3.5%. Even while they have been gradually coming back to earth, those are still some stellar numbers for consumers struggling with elevated inflation levels. Unfortunately, what is also apparent is that spending has largely been kept afloat by two things; a large cushion of savings consumers built up in the first year of the pandemic and credit card debt. But there are reasons for concern on both of those fronts. Before the pandemic hit, Americans had over $1.5 trillion in personal savings. One year later they were sitting on a nearly $3.9 trillion savings cushion. According to the Federal Reserve, as of July of this year, Americans had just under $777 billion in total savings. In other words, the savings dividend of the pandemic is gone, and Americans now have less money in the bank than they did before CoVid-19. Likewise, in January 2020 Americans had just over $890 billion in credit card debt. Over the next year, they used that savings dividend to pay credit card debt down to $770 billion (it’s lowest amount since 2017). That number, according to the Federal
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Reserve, now (end of Q3) now stands at nearly $1.1 trillion—an increase of $189 billion from pre-pandemic totals. It is, unfortunately, at the highest levels ever recorded just in time for the holidays. Yet, once again, it appears that there is no stopping an American consumer with a credit card. According to Sensormatic Solutions, instore foot traffic was up 4.6% compared to last year on Black Friday as consumers showed up. According to Mastercard Spendingpulse, which measures in-store and online retail sales across all forms of payment, retail sales on Black Friday were up 2.5% annually, with online retailers experiencing an 8.5% annual gain while in-store sales increased by just 1.1%. Meanwhile, Adobe Analytics reported their tracking of online sales to be up 7.5% with electronics being the major growth driver. According to Retail Dive, the winners on Friday were mobile and online, the calendar and discount hunters. The losers were doorbuster deals. For years the signature element of big box retailers on Black Friday, the long-term trend of holiday sales beginning earlier both in-store and online has made camping out in front of the Best Buy Thanksgiving night for a super deal on a flatscreen TV a strange memory from yesteryear. Incidentally, the Buffalo News had a great article the other day on that phenomenon, Black Friday definitely not the same as it used to be. Considering that Black Friday foot traffic was up over last year—a year in which the industry did well—the current sales estimates are exactly what economists thought they would be… humdrum. This is not to say that this year’s holiday shopping season could not potentially outperform growth estimates in the 2.0% to 3.0% range. Black Friday’s importance has been dwindling for 20 years. While it remains the busiest shopping day of the year in the United States, Super Saturday (the final Saturday before Christmas) over the past decade has become a neck-and-neck second place contender— even beating Black Friday by 10% in 2019. In fact, the final week before the holiday is where physical retail has maintained its dominance over online players due to delivery windows closing and aggressive in-store discounting. Speaking of aggressive in-store discounting, get ready for a lot of retailers to ramp up the markdown cycle. Strong foot traffic producing mediocre sales would seem to suggest that Fortune’s take, Pinched shoppers hold out for deeper discounts, is correct. Holiday markdowns are always a game of chicken between retailers and the consumer. Retailers that move too early can destroy their own margins and profitability and find themselves running out of stock before that critical final week where stores dominate holiday sales. Retailers that wait too long risk stockpiles of inventory they may have to discount even more sharply to move in their postholiday sales promotions. This year, the dilemma for retailers should be easy if they’ve been paying attention to what the economy is telling us. All the signs are there. It’s time for the discounting cycle to ramp up. If this was shared with you and you would like to receive the Gallelli Gazette Retail Roundup weekly in your email, email me directly at gbrown@gallellire.com and get on my mailing list.
TOP TEN RETAIL STORIES OF THE WEEK 1
US Consumer Confidence Rises; House Prices Accelerate Reuters 11/28
2
Here’s Who is Moving into Empty Bed Bath & Beyond Stores CBS News Boston 11/27
3
BofA, Deutsch Bank Predict Interest Rate Cuts in 2024 Fox Business 11/27
4
Average Retail Lease Size Falls to New Historic Low of 3,200 SF Bisnow 11/20
5
Economic Conditions Ideal for Sale Leaseback Strategies Globe Street 11/20
6
Mall Traffic Gains Momentum, US Recession Risks Lowered, Construction Employment Rises Costar 11/20
7
CRE Price Declines Starting to Stabilize Globe Street 11/16
8
Coffee Chains Add Major Expansion to the Menu Bisnow 11/15
9
Into the Wild: Is 2024 the Year the Ice Breaks on Commercial Real Estate? Commercial Observer 11/13
CRE Values Could Fall Another 10%, CBRE Boss
10 Says Bisnow 11/13
JKG
THE GALLELLI GAZETTE Retail Roundup
ECONOMIC, RETAIL AND CONSUMER TRENDS Cyber Monday Rings in $12.4B in Sales as Consumers Hunt for Bargains Yahoo! Finance 11/28 US Home Prices Hit Record with Eight Straight Months of Gains Bloomberg 11/28 Energized Shoppers Break One Day Holiday Sales Record CNN 11/25 Chicken and Coffee Wars Shopping Center Business 11/22 Two Consumer Trends Shaping the First Post Pandemic Holiday Season Forbes 11/22 Black Friday Evolution: How Early Shopping Trends Are Shaping New Holiday Norms Forbes 11/22 US Consumer Sentiment Drops Again on Inflation Fears Fox Business 11/22 Fashion Loves Food: How to Turn Restaurants into Power Brands Like Fashion Houses WWD 11/20 Even Walmart is Worried About the US Consumer Fashion Network 11/20 Shoppers to Spend $130B Thanksgiving Weekend: ICSC Retail Dive 11/16 The Market Thinks the Fed is Going to Start Cutting Rates. Investors Could be in for a Letdown CNBC 11/15 Hard Landing? Soft Landing? These Economists Say There’ll be No Landing at All Globe Street 11/15 Retail Sales Fall for First Time in Six Months WWD 11/15 Retail Sales Fall Less Than Forecast in October as US Consumers Defy Expectations Again Yahoo! Finance 11/15 Early Spending Sets Stage for Drawn Out Holiday Shopping, but What About Black Friday? WWD 11/14 Student Loan Repayments Will Probably Make for a Sad Holiday for Retailers Yahoo! Finance 11/13 Americans Losing Faith Inflation Will Return to Normal. Fed is Terrified CNN Business 11/12 Consumer Confidence Slips for Fourth Month in a Row Costar 11/12 Credit Card Balances Just Grew by the Biggest Amount in Over 20 Years Money 11/9 In Face of Consolidation, More Watch Retailers Turning to ReSale Glossy 11/8
TOP RETAIL REAL ESTATE TREND NEWS Don’t Count on CRE Prices Bottoming Out Any Time Soon Costar 11/27 Restaurant Forecast Predicts a Return to Stability in 2024 Costar 11/26 Fifth Avenue, Via Montenapoleone Top List of World’s Priciest Retail Venues WWD 11/21
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Issue No. 16 | November 28th, 2023
Economic Uncertainty Driving Consumers to Discount Stores Globe Street 11/21 More Landlords Chart Post-WeWork Path, Including a Residential Conversion Bisnow 11/15 Restaurants Remain Bright Spot as Retail Sales Dip Costar 11/15 Clearest Sign Yet That CRE is in Trouble: Foreclosures Surging Wall Street Journal 11/13 Multitenant Retail Sales Jump 34% from Previous Quarter Globe Street 11/13 Luxury Brands Struggle with Slowing Demand Glossy 11/12 Liquidity Gridlock Worsens in US Commercial Real Estate Sector Reuters 11/8
BUYERS, SELLERS, AND BUILDERS CTO Sells Eastern Commons Shopping Center in Las Vegas Metro for $18.2M Shopping Center Business 11/27 Ziff Buys Suburban Charleston (SC) Retail Center Wando Crossing for $46.8M Costar 11/27 Silver Star REIT Sells 3 Properties in Bid to Pay Down $217M Loan in Default Bisnow 11/22 De La Vega Adds Retail to Dallas 4M SF Development The Real Deal 11/22 Decades Old Charlotte Mill Recast as Office, Retail, Housing Connect CRE 11/22 JV Develops Plans for $500M Mixed-Use Development in Downtown Orlando Shopping Center Business 11/22 San Francisco Area Shopping Center Sells for $34M Shopping Center Business 11/22 Trademark to Develop 37-Acres Mixed-Use Center Outside of Houston Chain Store Age 11/20 DLC Purchases Four Open Air Shopping Centers for $100M from ShopCore Costar 11/20 Retail Properties Near Raiders Practice Facility in Vegas Sell for Almost $350 PSF Costar 11/16 Ovation Hollywood Shopping Center Raises Curtain on $100M Remodel WWD 11/15 Scottsdale, AZ Center Northsight Crossing Sells for $27.4M Costar 11/15 Retail Lenders Appetite is for Budget Friendly Dining Globe Street 11/14 Net Lease Cap Rates Up for Sixth Consecutive Quarter Globe Street 11/14 Tanger Factory Outlets Acquires Asheville, North Carolina Outlet Center for $70M Costar 11/14 Tenants Sign Leases Totaling 120K Sf of Space at Florida Shopping Center Under Construction Shopping Center Business 11/14 CIM Puts Block 37 Vertical Shopping Mall Up for Sale in the Heart of Chicago’s Loop Costar 11/13
JKG
THE GALLELLI GAZETTE Retail Roundup
Bell Works Chicagoland: A New Mixed-Use Metro-Burb in Northern Illinois Bisnow 11/9 NY Investor Expands Selloff of Chicago-Area Retail Properties Costar 11/9 Net Lease’s Biggest Competitor: Risk Free Money Globe Street 11/8
REIT-O-RAMA Simon Property Group Completes Two Mall Refinancings Costar 11/27 Plaza Retail REIT Appoints New COO Tradingpedia 11/24 Lenders Agree to Refinance Macerich’s Tysons Corner Center Costar 11/22 Washington Prime Secures $1B in Mortgage Financing Chain Store Age 11/21 Silver Star REIT Tackles $217M Loan w/Property Sales Costar 11/21 ‘We Want to Own Malls’: Primaris REIT CEO on $370M Halifax Mall Purchase BNN Bloomberg 11/20 Strong Leasing Activity in the Canadian Retail Sector: Cadillac Fairview Retail Insider 11/19 PREIT Posts Quarterly Loss as Clock Ticks on $1B Debt Bisnow 11/15 REITs Rally to Beat S&P’s Best Day on New Inflation Data Bisnow 11/14 Counterintuitive Strength in Physical Retail Lifts Outlook for Retail REITs Bisnow 11/7
SUPPLY CHAIN/ECOMMERCE/OMNICHANNEL/TECH Black Friday Shoppers Set ONLINE Spending Record, Adobe Says Fashion Network 11/26 Brands on TikTok Shop are Using Livestreams to Ramp up Black Friday & Cyber Monday Sales Modern Retail 11/24 Crate and Barrel Debuts Virtual Store Retail Dive 11/21 USPS Says it’s Ready for the Holiday Surge eCommerce Bytes 11/21 Tapestry Opens North Las Vegas Fulfillment Center for West Coast Deliveries Fashion Network 11/20 Luxury: The Decline of Multibrand E-tailers Fashion Network 11/20 US Retailers Stuck with Excess Stock Offer Bargains as Holiday Season Nears Fashion Network 11/20 October Online Grocery Sales Up to $8.2B Vs. $7.8B A Year Ago Shelby Report 11/13 Instacart Reports $2B Loss, but Sales Still Beat Expectations Supermarket News 11/9 Ahold Delhaize USA Selling Grocery eCommerce Service FreshDirect to Getir Grocery Dive 11/8
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Issue No. 16 | November 28th, 2023
NORTH OF THE BORDER Canadian Black Friday Numbers Hit $4.1B, Top 2023 by 22% BIV 11/27 International Visitor Spending in Canada Nearly Doubles Year-Over-Year BIV 11/27 Mastermind Toys: A Surprising Entry into Creditor Protection… Retail Insider 11/26 Korean Corndog Concept Chung Chun Opening in Vancouver Burbs Dished 11/24 Indigenous-Owned Streetwear Concept SECTION 35 Launches in BC; Eyeing Vancouver Expansion Retail Insider 11/23 Black Friday Becomes Top Day to Shop in Canada as US Tradition Takes Hold Costar 11/22 Lastman’s Bad Boy Furniture Proceeds to Liquidation Following BK Retail Insider 11/22 First Store for Sleep Country’s New Concept, ‘the rest,’ Opens in Toronto Retail Insider 11/22 Firehouse Subs to Expand to Western Canada in 2024 Dished 11/22 Toronto’s Yonge Street Sees Resurgence in Pedestrian Traffic Retail Insider 11/21 STRONG Pilates Planning Canadian Expansion in 2024 Retail Insider 11/21 Metro Expanding Super C Discount Concept in Quebec; Opening 106th Store Grocery Business Canada 11/20 Online Mattress Concept Endy Opens First Store in CF Sherway Gardens in Etobicoke Toronto.com 11/27 Scottish Outdoor Clothing Concept Trespass Enters Canada w/Aggressive Plans Retail Insider 11/16 Decathlon Expands Canadian Presence w/1st BC Store—More to Come Retail Insider 11/16 Nespresso Canada Opens in Toronto’s Union Station Grocery Business Canada 11/15 Swedish Outdoor Brand Peak Performance Lands in Vancouver Retail Insider 11/14 Three Richemont-Owned Luxury Watch Brands to Open Stores at the Park Hyatt in Toronto Retail Insider 11/13 Indigo Books & Music Opens New Urban Concept Store in Toronto Retail Leader 11/10 Morguard Locks Down Brown’s Shoes for Downtown Toronto Location Costar 11/10 POP Mart Expanding to Canada Retail Insider 11/9
EXPERIENTIAL EVOLUTION Pinstripes Eyes Global Identity as Demand for Experiential Dining Surges; At Least 6 Units for 2024 FSR Magazine 11/27 Topgolf Opens Third Venue in Alabama and 95th Nationally Shopping Center Business 11/27
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
Disneyland Files Construction Permits for $8M Food Hall Orange County Register 11/27
Philly’s Northern Liberties Neighborhood is Getting a Food Hall Philadelphia Inquirer 11/7
DC’s Friendship Heights Food Hall to Open in Two Weeks DC Urban Turf 11/27
In Las Vegas, The Rio’s Carnival World Buffet to be Replaced by Canteen Food Hall KTNV 11/7
Popular Chef Driven Food Hall, Strang Chef Collective, Opens Third Location at a Plaza Hotel Kansas City 11/27
Developers Drop Plans for Hawn Tower Food Hall in Killeen, TX Killeen Daily Herald 11/7
Mix Food Halls Shut Down All Three Locations in Ohio Krogers After Just 10 Months 614 Now 11/27
POP-UP-A-PALOOZA
Best Project Renovation/Restoration: The Warehouse Food Hall in Boise ENR Mountain States 11/27
Tanner Fletcher Opens First Retail PopUp WWD 11/27
This LAX-Adjacent Food Hall (The Proud Bird) Serves Bird’s Eye Views of Planes SF Gate 11/27
Corksicle Opens Rockefeller Plaza Popup Westfair Business Journal 11/27
Ellsworth Place Updates Opening Plans for Commas Food Hall Source of the Spring 11/24
VICI Women’s Brand Testing the Market w.2 SoCal PopUps WWD 11/22
The Heights Food Hall in Chevy Chase Finally Has an Opening Date WTOP 11/23
San Diego FC Bringing New Pop-Up Store to Mission Valley Mall Fox 5 San Diego 11/18
Retailtainment Goes a Mile High: 10 Concepts That Came to Denver in 2023 Bisnow 11/22
Bal Harbour Shops to Test Luxury Brands with Pop-Up in Raleigh, NC Costar 11/15
Dave & Buster’s Opening Soon in One of Austin’s Largest Retail Centers Austin Business Journal 11/22
Von Dutch Launches Pop-Ups in LA While Hunting for Permanent Location WWD 11/14
Mason-Bibb to Open World’s Largest Indoor Pickleball Facility at Macon Mall 41 WMGT 11/21
Shein, Forever 21 Unveil ‘Home for the Holidays’ PupUp in NYC Fashion Network 11/11
Bar, Arcade Entertainment & More Coming w/Austin’s St. Elmo Public Market Redevelopment KXAN 11/21
Carhartt Launches Popup Store in Detroit’s Midtown WRIF 11/8
Baseline Social Debuts at the Commissary at Baseline in Monmouth, NJ Costar 11/21
Cider Bets on Physical Retail with First US Pop-Up Store Modern Retail 11/7
St. Paul’s Keg & Case Food Hall Defaults on Loans, is Repossessed by Bank Minneapolis Star Tribune 11/21
Body Shop Opens Holiday Pop-Up in Toronto Fashion Network 11/7
3rd Shot Pickleball Opening in Longmont, CO—A Second One is Planned for Wheat Ridge, CO Longmont Leader 11/21
HIGH STREET HAPPENINGS
D.C. Chinatown Food Hall (Luna Hall DC) Plans Expansion to Tysons Corner FFX Now 11/16 Investors Be3hind New Eatertainment Fund Serve Up Big Plans for DFW Bisnow 11/15 Jaguar Bolera is Opening in Atlanta, Bringing Duckpin Bowling, Karaoke and Needlepoint Eater Atlanta 11/14 Is Atlanta Finally Reaching Peak Eatertainment? Eater Atlanta 11/14 Seventh Flight Club Location to Open in Philadelphia in Summer 2024 FSR Magazine 11/14 Center Court Pickleball Club to Open Three Valley Locations Across Phoenix Metro Fabulous Arizona 11/13 Dill Dinkers is Latest Franchise Making its Play in Pickleball: Plan to Open 40 in 2024 Franchise Times 11/9 Food Hall Track 15 at providence’s Union Station to Open Early 2024 Boston Globe 11/8 Electric Pickle to Open in Roseville, CA and Las Vegas, NV in 2024 Las Vegas Sun 11/7 Smash Park Opens Latest Location in Roseville, MN—Omaha is Next in 2024 FSR Magazine 11/7
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Tod’s Reveals Renovated Flagship at 650 Madison Avenue WWD 11/28 Madhappy Opens First Store in West Hollywood Retail Dive 11/27 Maison Valentino is Latest Fashion House to Open New Flagship on Madison Avenue Haute Living 11/24 Loewe Lands in Texas with its First Lone Star State Store Fashion Network 11/22 Luxury Furniture Concept Worth & CO. Debuts in Texas Retail & Leisure International 11/21 RH Opens On 151-Acre Estate in Indiana Chain Store Age 11/20 Cartier Opens New Store in NYC’s SoHo Fashion Network 11/18 Officine Generale Opens Second NYC Store at Madison Avenue Fashion Network 11/18 John Lobb Opens New Concept Store in NYC Fashion Network 11/16 Wasteland Coming to LA’s Silver Lake Fashion Network 11/10
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
Maison Kitsube Opens First Café Kitsune in Los Angeles Fashion Network 11/10
Michaels Craft Store to Open in Aiken, GA Next Year Post and Courier 11/17
Gabriela Hearst’s LA Flagship is Mannequin-Free and Kind to Trees WWD 11/9
Michael’s Craft Store Coming to Auburn, Maine Sun Journal 11/17
Genny, the Sophisticated Italian Womenswear Brand, Opens First US Store in Beverly Hills WWD 11/9
Mitchells Undertakes Massive Renovation of Two Stores, Building a Third WWD 11/16
Colombian Brand Wanitta Arrives in Miami Retail & Leisure International 11/8
Macy’s Plots 30 Small Format Stores in Former Bed Bath Locations Thru Fall 2025 Costar 11/16
Valentino Unveils Mega Flagship in New York WWD 11/7
Miniso Accelerates US Expansion with Over 20 New Stores Fashion Network 11/16
RETAIL CHAIN STORE OPENINGS AND GROWTH
Skims Plans Georgetown Store Retail Dive 11/16
Container Store Opens 100th Store in Princeton, NJ Chain Store Age 11/27
Vuori Opens Store in DC’s Georgetown Neighborhood Retail Dive 11/15
Barnes & Noble to Open New Store in Kenwood a Decade After Closing Original Store Cincinnati Business Courier 11/27
Primark Expanding into Texas, Here are the Two Locations Chain Store Age 11/14
Crate & Barrel to Open Seal Beach, CA Store in Early 2024 Costar 11/27
BuyBuyBaby Opening 11 Stores This Week; Wants 100 in Three Years Chain Store Age 11/13
Barnes & Noble Books Return Date for Roxbury NJ Store—Part of Ledgewood Mall Makeover Daily Record 11/27
Beyond Yoga Opens First Store Outside of California—in Chicago’s Fulton Market District Retail Dive 11/13
Nordstrom Pushes Rack Expansion (+17 in 2024) as Full-Line Fleet Contracts Fashion Dive 11/27
Phenix Salon Suites Opening Three Units in Greater NYC Area Suburbs Costar 11/10
Australia’s Frankie4 Opens First US Flagship in Seattle Fashion Network 11/26
Next-Gen Ear-Piercing Concept Studs Expands to Chicago w/20th Store Chain Store Age 11/10
Bang & Olafsen Opens Doors to New York Flagship Showroom Retail & Leisure International 11/24
Boot Barn to Open a Store a Week in 2024 Retail & Leisure International 11/8
Rally House Adds New Store in Detroit Area Cision PR Newswire 11/24
REI Opening in Dayton, OH Costar 11/8
Italian Fashion Brand Etro Now Open at Atlanta’s Phipps Plaza What Now Atlanta 11/24
Look Out Buc-ee’s and 7-Eleven, Casey’s is Coming to North Texas Dallas Morning News 11/8
Workwear Brand Carhartt is Opening Stores in Dickies Country Dallas Morning News 11/24
GNC Unveils New Pittsburgh Flagship as it Seeks to Establish New Retail Identity Modern Retail 11/7
Espirit Opens First LA Store in Venice Fashion Network 11/23
THE GROCERY AISLE
Toy Store Henry’s Bear Park to Open in Trendy Charlestown (Boston) Charlestown Bridge 11/23
All Hail the Grocery Store Reason 11/23
Salt Life Continues Brick and Mortar Expansion w/Virginia Opening Next Month Marking 28th Unit Retail Dive 11/22
Fareway Finalizes Plans for New Location in Eldora, IA Shelby Report 11/22
Wilson Opens 8th USA Store… in Mall of America Retail Dive 11/22 It’Sugar to Close Year w/20 New Stores: Will Experiment w/popups and larger formats in 2024 Chain Store Age 11/22 Boll & Branch Plots Retail Expansion Modern Retail 11/21 Why Menswear Brand Rhone Has More Than Doubled its Store Counts This Year Modern Retail 11/21 Sheetz Plots New Stores in North Carolina in Latest Expansion Costar 11/20 After 30 Years, Crate & Barrel Finds New NYC Home WWD 11/17
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Grocery Outlet Opens Sixth Store in Maryland Shelby Report 11/22 Grocers Try to Pull Shoppers into Bakery Despite High Prices Supermarket News 11/21 Indie Grocers are Popping Up All Over the Country Winsight Grocery Business 11/21 Inserra Supermarkets Opens ShopRite in Elmwood Park, NJ Shelby Report 11/21 Whole Foods Market Relocating to New Site in Madison, WI Shelby Report 11/20 Grocery Outlet Enters Ninth State with Ohio Opening Winsight Grocery Business 11/19
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
Whole Foods Market Celebrates Opening in Overland Park, KS Shelby Report 11/17
Donatos Announces Franchise Development Deals for Louisville and Orlando QSR Web 11/17
Superior Grocers Holds Grand Opening in Victorville, CA Shelby Report 11/17
Red’s Savoy Pizza Opens 1st Iowa Location Pizza Marketplace 11/17
Vallarta Supermarkets Opens 56th Store in Salinas, CA Winsight Grocery Business 11/15
Dae Gee Korean BBQ Opens First US Franchise in Fort Wayne, IN: Wants to Open 10-12 Annually FSR Magazine 11/17
Publix Plans to Enter Kroger’s Home Turf w/Cincinnati-Area Store Grocery Dive 11/14
Gen Korean BBQ Touts Financial Strength as New Public Company—Ramping Up 2024 Growth FSR Magazine 11/17
Kroger Breaks Ground in Central Ohio on One of the Largest Stores in the Midwest (123K SF) Supermarket News 11/14
Budlong Southern Chicken Opens in Irving, TX QSR Magazine 11/17
Amazon Fresh Focusing on Grocery Fundamentals w/Updated Stores Grocery Dive 11/13
Whataburger to Open 10 Units in South Carolina Shopping Center Business 11/16
Dorothy Lane Market Breaks Ground on its Largest Store in Mason, OH Grocery Dive 11/13
Emmy Squared Pizza to Open 26th Unit in Fort Lauderdale FSR Magazine 11/16
The Rising Stores of Grocery Supermarket News 11/10
Another Broken Egg Café Approaches Milestone 100th Location FSR Magazine 11/15
Target’s Grocery Muscle May Surprise You Winsight Grocery Business 11/10
Fogo de Chao Signs Lease in Nashville FSR Magazine 11/15
Smart & Final Opening Three New California Stores Winsight Grocery Business 11/10
Flower Child Sets Sights on Salt Lake City QSR Magazine 11/15
Vallarta Supermarkets Opens 55th Store in Carson, CA Winsight Grocery Business 11/9
Robeks Ramping Up Arizona Expansion QSR Magazine 11/15
Publix Ups the Ante in Kentucky with 6th Store Winsight Grocery Business 11/9
Huey Magoo’s Opens 54th Restaurant in Ozark, MO QSR Magazine 11/15
Soon-to-be 20-Unit New Seasons Plans 4 New Stores Over Next 3 Years Shelby Report 11/9
Atomic Wings to Open New Location in Houston QSR Magazine 11/15
Gerrity’s Completes Rebrand of 10 PA Stores to Fresh Grocer Format Grocery Dive 11/8
Dank Burrito to Open in Rock Hill, SC Next Year QSR Magazine 11/15
Gelson’s Opens First West LA Store; 28th Overall Winsight Grocery Business 11/8
Hash Kitchen Comes to Draper, UT FSR Magazine 11/14
Trader Joe’s to Open Store in Forest Hills, NY Winsight Grocery Business 11/8
The Brass Tap Expands to Milton, GA FSR Magazine 11/14
Desi Brothers Farmers Market to Open 48K SF Store in Metro Austin Shopping Center Business 11/8
Twin Peaks Opens 108th Unit in Schererville, IN FSR Magazine 11/14
FOOD & BEVERAGE
Modern Market Eatery to Open Chain’s First Drive Thru in Colorado Springs QSR Magazine 11/14
Mountain Mike’s Pizza Debuts in Colorado QSR Magazine 11/27
Bad Ass Coffee of Hawaii Signs Phoenix Five Store Franchise Deal QSR Magazine 11/14
Jollibee Opens 70th US Store in Dallas, TX QSR Web 11/21
Seven Brothers Burgers Signs Franchise Deal to Add 19 Units in AZ, NV, and ID QSR Magazine 11/14
Flying Biscuit Café Opens 30th Unit for 30th Birthday: Closing 2023 w/5 New Restaurants FSR Magazine 11/21
Honeygrow Announces Three New Stores in Maryland (2) and Massachusetts (1) QSR Magazine 11/14
Kora Sushi to Open 11-13 Units in 2024—Targets 290 Units Nationally FSR Magazine 11/21
Beans & Brew Coffeehouse Signs Deal to Grow in Houston QSR Magazine 11/13
Big Dave’s Cheesesteaks Announces Franchise Program—Wants 100 by End of 2025 QSR Magazine 11/21
Chick N Max Signs Lease in Lufkin, TX: Wants to Open 5-7 Restaurants in 2024 QSR Magazine 11/13
New Potbelly Deal (+/- 425 Units) Expands Brand’s Presence in Seattle-Tacoma on Way to 2,000 Shops Franchise Times 11/21
Pizza Guys Plan to Open Nearly 150 Locations in Texas Over Next Decade Costar 11/13
Walk-Ons Opens First Location in West Little Rock, Arkansas FSR Magazine 11/20
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365-Unit Taco John’s Expands Presence in Wisconsin w/Milwaukee Restaurant QSR Web 11/10
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
49-Unit Sarpino’s Opens 1st Colorado Pizza Restaurant Pizza Marketplace 11/9
Net Lease Investors Can Relax About Rite Aid Globe Street 11/13
Dutch Bros Brews Strong Quarter; Sees Potential for 4,000 Stores Chain Store Age 11/8
Grand Lux Café Shutting Down on Chicago’s Mag Mile Costar 11/13
Hot Dog Shoppe Signs First Franchisee in Venice, FL QSR Web 11/8
Another Big Burger King Franchisee Files for BK, the Third This Year Franchise Times 11/10
Jersey Mike’s Has No Plans to Let Up—Wants to Open 350 Units in 2024 QSR Magazine 11/8
Will JOANN Facing Bankruptcy be the End for the Retailer? RetailWire 11/10
6-Unit Vicious Biscuit Ramps Up Franchising—Wants 75 Units by End of 2028 QSR Magazine 11/8
Clover Food Lab Declares BK: Unclear if 12 Restaurants Will Remain Open QSR Magazine 11/8
Sip Fresh Announces 3-Unit Deal in Orange County, CA QSR Magazine 11/8
M&A’S, IPO’S, AND OTHER SHENANIGANS
Little Caesars Inks Franchise Deals to Add 15 Units to Boston and Chicago Pizza Marketplace 11/8
Foxtrot and Dom’s Announce Merger Grocery Dive 11/27
Mister 01 Pizza Opens 13th Unit in Mansfield, TX FSR Magazine 11/7
FTC Fights Grocery Merger That May Bring Down Prices Reason 11/24
LOCAL MARKET NEWS
PE Firm Riverside Buys 24-Unit Frenchies Modern Nail Care Franchise Times 11/22
Shifts in Portland’s Retail Leasing Landscape Take Form as Year Winds Down Costar 11/27
Rreal Tacos Acquires Iconic Mexican Staple Zocalo’s FSR Magazine 11/15
Chicago’s Michigan Avenue Retail Rents See Steepest Decline of any Prime Shopping District Chicago Business Journal 11/22
Natura Sells Body Shop to Aurelius at a Loss—New Owner to Re-Energize Brand Modern Retail 11/14
A Great Reset is on the Horizon for Downtown San Francisco Bisnow 11/21
Bain Eyes Varsity Brands Cash Out at $6B Plus Valuation Modern Retail 11/14
Number of Retail Spaces Dwindles Across Manhattan Costar 11/20
Pearl Street Equity Buys Mrs. Fields & TCBY Franchise Times 11/14
Detroit Retail Leasing Activity Declines to 2020 Levels Costar 11/20
Coborn’s Sells 14 Holiday Stationstores locations Grocery Dive 11/10
Retail Construction Surges in Austin to Meet Growing Tenant Demand Costar 11/16
Bagel Jay’s Sold to Bruegger’s Buffalo Business First 11/9
CRE Sales in Charlotte Hit Lowest Point in Nearly a Decade Costar 11/15
Casey’s Picks Up 22 Lone Star Food Stores Convenience Store News 11/8
Is it Raleigh? Nashville? Experts Identify Which Market Could be the ‘Next Austin’ Globe Street 11/15 Best Places to Retire? Pennsylvania Dominates New Ranking as Florida Markets Drop Costar 11/14 Retailers Flock to the Suburbs as Many Boston-Area Residents Shop, Dine Closer to Home Bisnow 11/9
RETAIL CHAIN STORE CLOSINGS AND CONTRACTION Container Store May be Facing Bankruptcy 700 WLW 11/27 The Fall of the Retail Pharmacist Supermarket News 11/21 With Hundreds of Closures Coming, Drug Stores Can’t Find the Cure for What Ails Them Bisnow 11/20 Ron Herman, Icon on the LA Retail Scene, Closing WWD 11/17 Big Wendy’s Franchisee Files for BK Amid Fast Food Pain Bloomberg Law 11/15
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JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 16 | November 28th, 2023
Christmas-decorated downtown Philadelphia, the popularity of a “family-day outing” to the department stores during the Thanksgiving weekend, the increased parking facilities, and the use of additional police officers for guaranteeing a free flow of traffic…”
CULTURE CORNER In this week’s culture corner, we are going to explore the origin of the term Black Friday. My first job in high school was working at a Brookstone store. One of my managers had shared with me the story that Black Friday was named in honor of black ink, or profits. His explanation was that by the time the holiday season comes around, most retailers have recouped all their expenses and are earning nothing but profit. Of course, he was completely wrong but that may have been by industry design. The earliest recorded use of the phrase Black Friday being applied to shopping the day after Thanksgiving comes from the Philadelphia police department in the late 1950s. Black Friday reflected the horrible traffic conditions the city faced thanks to the surge of newly transplanted suburbanites flooding the retail district of the Center City all at once. This was complicated by the fact that the city also served as host of the annual Army-Navy football game that for most of its history was played on the Saturday after Thanksgiving. The now defunct Evening Bulletin reportedly ran a front-page story on the terrible traffic conditions Philadelphia experienced on the Friday after Thanksgiving in 1961 declaring, “Black Friday.”
Obviously, “Big Friday” didn’t stick. But Black Friday did, and by the 1980s retailers had effectively put a positive spin on the term—hence the widely held belief that Black Friday was the catalyst day for sending profits into the black. Ultimately, the word has become cover for an entire promotional season, more than just that one day, which is another reason why Black Friday as a singular event has continued to become less relevant in the digital age. Black Friday used to act as the starting gun to a consumer race that was held at a specific place… the shopping center. It created a sense of urgency that has since been diffused by retailers starting their promotions earlier and earlier. It has been diffused by eCommerce. It has been diffused by more choices for consumers. It has been diffused by the fact that now on Black Friday you can sit at home watching an NFL game on Amazon Prime while ordering goods during the commercial breaks from… Amazon. Incidentally, am I the only one that thinks Amazon lobbying the NFL to approve Black Friday football games they get to broadcast on their streaming network that simultaneously would keep a certain percentage of shoppers at home was just a diabolically genius plan? I have a friend that mourns the decline of Black Friday. Her family had made it a big tradition to go shopping together when she was growing up, so I understand her sense of loss. Even though my memories of the day come more from working at malls in my youth and dealing with difficult customers, lines out the door, hellscape mall parking lots and aching, sore feet at the end of the day. Black Friday as a cultural touchstone day is something that has only been with us for a little over 50 years. It’s meaning has shifted from the start and it will continue to do so.
There is also some evidence that the phrase was used to describe rampant absenteeism on the Friday before Thanksgiving. An article from 1951 in an issue of Factory Management and Maintenance read, “’Friday-after-Thanksgiving-itis’ is a disease second only to the bubonic plague in its effects. At least that’s the feeling of those who have to get production out, when the ‘Black Friday’ comes along. The shop may be half empty, but every absentee was sick—and can prove it.” By 1961, the industry was looking at how change what they felt was a derisive and gloomy term for their biggest day of the year. A 1961 issue of Public Relations News defines the problem, as well as the attempts of a PR executive to rebrand the day. “For downtown merchants throughout the nation, the biggest shopping days normally are the two following Thanksgiving Day. Resulting traffic jams are an irksome problem to the police and, in Philadelphia, it became customary for officers to refer to the postThanksgiving days as Black Friday and Black Saturday. Hardly a stimulus for good business, the problem was discussed by the merchants with their Deputy City Representative, Abe S. Rosen, one of the country’s most experienced municipal PR executives. He recommended adoption of a positive approach which would convert Black Friday and Black Saturday to Big Friday and Big Saturday. The media cooperated in spreading the news of the beauty of
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But whatever retail has lost from the declining importance of Black Friday over the last 20 years, it has gained elsewhere.
Gary Gallelli
CEO - Partner gary@gallellire.com
Pat Ronan
Vice President pat@gallellire.com
JKG
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Garrick also produces a regular podcast, The Retail Grind, with Bill Yanek, the CEO of ConnexFM (North America’s largest facilities management trade group), where he explores the latest economic, retail and real estate news.
Garrick H. Brown Gallelli Real Estate gbrown@gallellire.com (916) 789-3324
ABOUT THE WRITER Garrick Brown is one of the leading real estate analysts in the United States; he is a 25-year industry veteran analyst and thought leader in the space, as well as an experienced manager of large, national teams of researchers. He has a strong background in all the commercial real estate product types, though for the last 15 years he has primarily been known for his work in the retail space. Garrick is regularly quoted on real estate, retail and economic matters by the Wall Street Journal, the CBS Evening News, NBC News, CNBC, National Public Radio, Women’s Wear Daily and dozens of Business Journals and other industry publications. Mr. Brown is a major business influencer; he has over 21,000 followers on LinkedIn, where he regularly posts economic and commercial real estate commentary to an audience consisting primarily of brokers, retailers, developers, site selection professionals, appraisers, lenders, investors, private equity, economic development professionals and business media.
Mr. Brown is frequently asked to contribute to major industry publications. He authored the retail real estate portion of the 2023 edition of the Urban Land Institute and PriceWaterhouseCoopers’ trademark industry publication, Emerging Trends in Real Estate. Garrick is a renown public speaker on economic, real estate and retail matters. He is known for his dynamic and entertaining speaking style and for his ability to tell the stories behind the data, synthesizing trends and connecting dots beyond the obvious. He regularly speaks to private and academic groups (Baruch College, Florida State University, Harvard Graduate School of Design, UCLA Ziman Center for Real Estate, etc.), and all the major, national commercial real estate-focused trade groups (BOMA, California Bankers Association, CCIM, ConnexFM, CREW, ICSC, NAIOP, Urban Land Institute, etc.). Mr. Brown currently works as a freelance writer and consultant for a number of private clients. In addition to his public speaking engagements, Garrick frequently advises corporate real estate teams regarding economic conditions, market forecasting, business and brokerage strategies. His previous experience includes managing Cushman & Wakefield’s retail research for the Americas, as well as managing commercial real estate research functions (all property types) for the Western United States for Cassidy Turley and Newmark. He began his career as a research associate with Grubb & Ellis in Kansas City, Missouri and later managed research operations for Colliers International for the Indianapolis, Indiana and Sacramento, California markets.