JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 17 | December 13th, 2023
QUOTE OF THE WEEK: “The most important thing to remember about drunks is that dunks are far more intelligent than non-drunks. They spend a lot of time talking in pubs, unlike workaholics who concentrate on their careers and ambitions, who never develop their higher spiritual values, who never explore the insides of their head like a drunk does.”” - Shane MacGowan (Dec 25, 1957 – Nov 30, 2023)
WHAT DOES AN ECONOMIC SOFT-LANDING LOOK LIKE? This afternoon the Dow Jones Industrial Average jumped more than 400 points in reaction to today’s announcement by the Federal Reserve that it would keep its benchmark overnight borrowing rate steady at 5.25% to 5.5% for the third consecutive time and, more importantly, that it would likely be lowering interest rates in 2024. Along with that decision to keep interest rates where they are, the policymakers on the Federal Open Market Committee (FOMC) penciled in at least three rate cuts for next year. Assuming quarter percentage increments, this potentially would bring the Fed overnight borrowing rate down to 4.5% to 4.75%. This is all contingent, of course, on the FOMC’s inflation projections holding true. In their September 2023 meeting, the Fed had predicted the core personal consumption expenditures (PCE) price index falling to 2.6% in 2024 and 2.3% in 2025. Their revised forecast now sees those numbers dropping to 2.4% next year and to 2.2% in 2025, with PCE hitting their 2.0% target by 2026. According to Fed Chairman Jerome Powell, “Recent indicators suggest that growth in economic activity has slowed substantially from the outsized pace seen in the third quarter. Even so, GDP is on track to expand around 2.5% for the year as a whole.” The current Fed forecast for GDP next year is at 1.4%. In November, total inflation declined slightly last month thanks mostly to falling gas prices. The overall consumer price index (CPI) fell from October’s 3.2% to 3.1% in November. But the PCE index—which is the gauge that the Fed relies on most (it excludes the more volatile categories of food and energy prices) increased 0.2% between October and November. On an annual basis, that uptick was not enough to drive year-over-year increases in this metric—it held steady at 4.0% for the second month in a row. Throughout the last two years as the Federal Reserve has conducted its war on inflation, economic news has been through the looking glass. With the Fed having set a record for the speed with which they raised rates (five full percentage points in just 11 months) to cool the economy, we have seen both the labor market and consumer spending (which drives 70% of US GDP) remain resilient and what is normally good news (a strong jobs or spending report) suddenly becoming bad news because of the likelihood of further rate cuts being needed to curb inflation. But the pace at which both employment and retail sales growth have been slowing have likely been the critical factor behind today’s developments. The US economy added 199,000 jobs in November with unemployment falling to 3.7%. However, over the first ten months of the year the US economy averaged over 235,000 new jobs monthly,
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with that average heavily weighted towards the beginning of the year. What may be most telling is that while healthcare and government accounted for the lion’s share of employment growth last month, retailers actually cut permanent payrolls by about 40,000 jobs. Keep in mind, this occurred in November as the holiday shopping season kicks into high gear. Check out the last issue of the Gazette for a more detailed analysis of the latest retail sales data and why the stars seem to be aligning for a so-so holiday shopping season (our forecast is that growth will likely stay in the 2.0% to 3.0% range). All of which is not so great news for retail. More aggressive markdowns could still change this equation as we enter the final two weeks before Christmas and the final surge of holiday shoppers. But while foot traffic continues to outpace last year’s totals by about 5%, but multiple publicly traded chains have lowered their guidance for the season in the last few weeks. Growth is still expected, but tepid growth. And that is what we are likely in for over the first half of 2024. It is possible, if not likely, that we will see year-over-year retail sales in Q1 finally flatline or go modestly negative (while the month-over-month totals have occasionally been in the red over the past two years, annual growth has been positive since the early days of the pandemic. Likewise, anticipate job growth to continue to slow. We would not be surprised to see it dropping from current levels by as much as 40% over the first half of the year. The unemployment rate is likely to tick up as well, though barring any black swan events, it is not likely under current scenarios to exceed anything beyond the low 4.0% range. What will this mean for the retail real estate market? Considering that one of our featured top ten headlines this week is Costar’s “Demand for Retail Space Hits Record High in US,” leasing demand is going to start to creep down from current peaks. It is already starting to occur; Dollar General is now looking at opening 800 stores in 2024. That total hasn’t been below the 900-unit mark in years, and we would not be surprised to see other incremental, modest declines. The key words being incremental and modest—at least for major chains. But assuming that interest rate hikes are now over, and that the Fed’s plan comes to fruition, we would likely be seeing interest rate cuts by the second half of 2024. This would have profound implications for real estate investment activity, even if modest because it would solidify a sense of bottom in pricing and lure billions of capital currently sitting on the sidelines back into action. For example, Brookfield Asset Management alone has announced they have stockpiled $102 billion of dry powder to “Deploy into attractive market opportunities.” They are, of course, far from being alone in raising funds and waiting for the right moment. A recent Globe Street article puts the total at an estimated $300 billion in funds earmarked for commercial real estate. Consider this, if that amount were to be deployed with a 60% loan-to-value it would be about $750 billion worth of commercial real estate sales volume. We would almost assuredly not see those levels of pent-up demand, but assuming Fed forecasts end up ringing true, get ready for commercial real estate investment activity to finally begin to rebound by the middle of 2024.
TOP TEN RETAIL STORIES OF THE WEEK 1
Demand Keeps Growing for Retail Space in Most Major US Markets Coater 12/12
2
US Consumer Inflation Lifted (+0.1%) by Rising Rent Costs in November Reuters 12/12
3
5 Retailers That Need a Strong Finish for the Year Retail Dive 12/12
4
Pardon the Disruption: 7 Grocery Trends That Defined 2023 Grocery Dive 12/12
5
Demand for Retail Space Hits Record High in US Costar 12/11
6
Report: Half of US Consumers Left Most Their Shopping for December Retail Dive 12/8
7
The Revitalization of Urban Retail Globe Street 12/7
8
McDonald’s Spinoff CosMc’s Coming Soon to Chicago, Dallas and San Antonio Areas Costar 12/7
9
Class A Malls Continue to be in High Demand Modern Retail 12/1
In the meantime, what does an economic soft landing look like? Meh. That’s what it looks like.
Our Best CRE Guess for 2024
10 Globe Street 11/30 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.
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 17 | December 13th, 2023
ECONOMIC, RETAIL AND CONSUMER TRENDS
ICSC New York Show Roundup: Highlights from Annual Retail Property Conference in NYC Costar 12/8
Inflation is Slowly Coming Down and No Longer Outweighing Americans’ Wages CNN Business 12/12
Green Street: CRE Prices Fall Another 3% But ‘May Well Have Hit Bottom’ Bisnow 12/8
Inflation Expectations Cool as Oil Tumbles Ahead of Fed Decision Bloomberg 12/12
What’s Next for Drug Stores? Modern Retail 12/7
Inflation Fears Down, Consumer Optimism Up CNBC 12/12
Report: Apparel Retailers Dominate Prime Corridor Leasing Retail Dive 12/7
Early Sales Point to Strong Holiday Season Costar 12/11
When Retail-to-Residential Conversions Make Sense Globe Street 12/7
US Jobs Market Cools Again, Conference Board Employment Trends Index Shows Wall Street Journal 12/11
Retail Bankruptcies Are Opening Ripe Real Estate Opportunities for Competitors Modern Retail 12/6
Misery Has Company, But Recession is a No-Show Bloomberg 12/10
Looking at Risk Retail Loans Might Pose to Banks Globe Street 12/5
Why Americans Are Going Hungry Despite a Strong Economy NBC News 12/9
BUYERS, SELLERS, AND BUILDERS
Americans Are No Longer Ready to Shop Till They Drop CNN Business 12/8
Cap Rates on the Rise at Dollar Stores Globe Street 12/12
US Payrolls Rose 199K in November, Unemployment Falls to 3.7% CNBC 12/8
Sterling Organization Acquires Braemar Village Center in Metro DC for $31.4M Shopping Center Business 12/12
US Luxury Sales Slump Continued Through November Fashion Dive 12/8
October’s Sale Volume Was the Lowest This Year Globe Street 12/11
Toast Reports Most Popular Dining Time is 7PM Pizza Marketplace 12/8
SimonCRE to Develop 15.6 Acre Mixed-Use Development in Arizona Shopping Center Business 12/11
The New Scapegoats: Brands Are Blaming Temu & Shein for Poor Business Performance Modern Retail 12/6
Derby, CT Center Hilltop Commons Sells for $33M Shopping Center Business 12/11
Student Loan Borrowers Are Cutting Expenses to Afford Their Monthly Payments Money 12/6
Large Single Tenant Net Lease Players Wait Out Cap Rate Peak Globe Street 12/8
Retailers Go Big as They Invest in Experiences for Shoppers Globe Street 12/5
One Times Square, Home to New Year’s Ball Drop, Hits Major Redevelopment Milestone Costar 12/8
Small Businesses Struggle to Meet Millennial And Gen Z Consumer Expectations WWD 12/5
Regency Breaks Ground on Redevelopment of 280K SF Mall on Long Island Shopping Center Business 12/8
Miu Miu is the Year’s Buzziest Brand and Other Top 2023 Fashion Trends Fashion Dive 12/4
West Ridge Mall in Topeka to Undergo Redevelopment Retail & Leisure International 12/7
More Retailers Are Offering Returnless Refunds Glossy 12/3
Why Net Lease Investors Should Avoid Car Wash Deals Globe Street 12/7
Once Gloomy US Retailers Now Signaling More Holiday Cheer After Solid Start to Season Fashion Network 12/3
Developer Looks to Tap Las Vegas’ Rising Sports Profile w/$380M Project Costar 12/7
Holiday Spending Spree Fueled by ‘Buy Now, Pay Later’ Shoppers CNN Business 11/29
DML Capital Purchases Grocery-Anchored Center in Suurban Houston Costar 12/5
Early Holiday Luxury Apparel Sales Stagnate Fashion Dive 11/27
Investors Are Underweight in Retail. Here’s Why That’s a Mistake Globe Street 12/4
TOP RETAIL REAL ESTATE TREND NEWS
Tanger Acquired Bridge Street Town Centre in Alabama for $193.5M Shopping Center Business 12/1
After Liquidating Stores, Bankrupt Retailers are Staging a Comeback Modern Retail 12/12
CRE Pricing Forecast is Down, Down, Down Globe Street 11/30
Ghost Kitchens Are Making a Post-Pandemic Pivot to Survive Modern Retail 12/11
Unibail Sells Off Troubled Southern California Mall, the Shops at Palm Desert Costar 11/30
Here’s How ‘Golden Tenants’ Can Help Revive Ailing Shopping Centers Costar 12/10
New Mixed-Use Project from Famed Japanese Architect Unveiled for Miami’s Design District Costar 11/30
Gallelli Real Estate - www.gallellire.com
JKG
THE GALLELLI GAZETTE Retail Roundup
REIT-O-RAMA PREIT Files for Bankruptcy Again, Will Go Private as $1.1B Debt Matures Bisnow 12/11 The Top Canadian REITs to Buy in December 2023 Motley Fool 12/11 URW Set to Refinance Signature New Jersey Mall Ahead of Planned Redevelopment Costar 12/8 Recent REIT Performances Underscore Strengths and Challenges in US Retail Market Costar 12/7 Brookfield Secures $190M Refinancing for San Francisco Mall Stonestown Galleria Costar 12/6 Triple Five Group Says American Dream Occupancy Has Hit Critical Mass After Delays & Losses Bisnow 12/5 Macerich Closes $710 Refinancing Deal for Tysons Corner Center Bisnow 12/5 Tanger Acquires its First Open Air Lifestyle Center WWD 12/1 Realty Income Acquires a Decathlon Mega-Portfolio Globally Costar 11/30 Simon Completes Two Mall Refinancings Costar 11/27
SUPPLY CHAIN/ECOMMERCE/OMNICHANNEL/TECH The Halo Effect III: How Physical Stores Drive Online Sales ICSC 12/12 Unveiling the Achilles Heel of eCommerce: The Pitfalls of Poor Delivery Techbullion 12/12 In Seattle eCommerce Clash, Defunct Retailer Zulily Sues Rival Amazon Seattle Times 12/12 Dollar General to Refocus on Store, Supply Chain and Merchandising Strategies Retail Info Systems 12/11 The Self-Checkout Reversal is Growing CNN Business 12/8 Sam’s Club Adds 2 More Distribution n Centers to its 2024 Lineup Grocery Dive 12/4 Retail Tech Trends for 2024 Retail Info Systems 12/1 Sam’s Club to Open Two New DCs: St. Louis & Minneapolis Supermarket News 12/1 Why Grocers Are Experimenting With Sensory-Friendly Shopping Experiences Modern Retail 11/28 Tapestry’s New Las Vegas Fulfillment Center to Tap Robotics Retail Info Systems 11/27
NORTH OF THE BORDER Mountain Warehouse Looks to Open Dozens of Stores Across Canada Retail Insider 12/12 Tourism Recovery Not Expected Until next Year, Destination Canada Reports BIV 12/12
Gallelli Real Estate - www.gallellire.com
Issue No. 17 | December 13th, 2023
Canadian Grocers are Basking in Record Profit Supermarket News 12/12 Upscale Toronto Retailer Carriage Trade Marks 60 Years W/Expansion Plans Retail Insider 12/12 Luxury Children’s Retailer Bonpoint Opens Canadian Flagship in Toronto; Plans More Stores Retail Insider 12/11 Uniqlo is Opening a Second Calgary Location & Here’s Where Curiocity 12/11 Uniqlo is Opening Two More Stores in Toronto & Here’s Where Curiocity 12/11 Calgary-Based Monki Breakfast Club Looks to National Expansion Following Local Success Retail Insider 12/11 SENTALER Opens Toronto Flagship Store With Plans for Expansion Retail Insider 12/10 Peak Performance’s New Vancouver Store Seeing Brisk Sales BIV 12/8 All the New Stores Opening at Toronto’s The Well Curiocity 12/5 Must Have Goods Like Groceries Will Keep Retail Real Estate on Good Footing Into 2024 BIV 12/6 How 16-Unit Canadian Grocer Freson Bros. Embraces its Roots Grocery Dive 12/6 Open Air Retail Centres in Canada Seeing Lower Vacancies and Increased Tenant Demand Retail Insider 12/6 SHEIN is opening holiday pop up experience in Mississauga Curiocity 12/5 Retail Leasing & Investment Picture in Canada Remains Stable Despite Headwinds Retail Insider 12/5 California-Based Wetzel’s Pretzels Plans Aggressive Expansion in Canada Retail Insider 12/5 Mastermind Toys Acquired by Joe Mimran’s Unity Acquisitions; 18 Stores to Close Retail Insider 12/4 BMO Analyst Predicts Retail Renaissance Globe and Mail 11/30 Strong Start to Holiday Shopping as BC Retails Zero in On Experiences BIV 11/30 Vancouver’s 5-Unit MEC Plans to Double Store Count by 2029 BIV 11/28
EXPERIENTIAL EVOLUTION The Heights Food Hall Opens at Last in Chevy Chase Axios DC 12/12 Newly Completed Market Halls That Revitalize Their Urban Communities Arch Daily 12/12 Atlanta’s Newest Food Hall, Halidom Eatery, is Coming to East Atlanta in April 2024 Secret Atlanta 12/11 Food Halls Are Booming in the DC Area. Here’s Why WTOP News 12/11 New Restaurants Coming Soon to Mekong Plaza, Metro Phoenix’s Biggest Asian Food Hall AZ Central 12/11
JKG
THE GALLELLI GAZETTE Retail Roundup
The Ultimate Guide to Portland Food Halls Travel Portland 12/10 13 Food Halls for Getting Lost in LA’s Diverse Cuisines Los Angeles Times 12/9 Eat, Sip, Shop: Twisted Tees Nears Opening in Bethlehem, PA WFMZ 12/9 Experiential Concept Commonwealth Texas to Open in Temple, TX in Early 2024 KCENTV 12/8 Two Story Food Hall Concept, Junction Hall, Planned for Downtown Aberdeen NC The Pilot 12/8 New Food Hall Opening Soon in Pittsburgh’s Lawrenceville Neighborhood KDKA 12/8 Puttshack Opens New 32K SF Location in North Texas FSR Magazine 12/7 Little Rock Topgolf Location Opening in Late December KARK 12/7 This New Experiential Jewelry Store Lets You Watch Designs Come to Life Robb Report 12/6 Flight Club Aims its Darts at DC Commercial Observer 12/6 Seminole Heights Food Hall Flocale is on the Market for $3M Creative Loafing 12/6 Eataly Opens Third Manhattan Location in SoHo Neighborhood Costar 12/5 Orlando is Getting a $1.5B Resort w/an 8-Acre Lagoon, Food Hall and Vacation Homes Travel + Leisure 12/5 Foodie Labs, St. Pete’s New Virtual Food Hall, Opens in the Warehouse Arts District Creative Loafing 12/5 BierBath to Open December 9 Retail & Leisure International 12/4 Downtown San Jose Stealth Food Hall Work Proceeds; May Open in Weeks San Jose Mercury News 12/4 Gaming Concept, Activate, Plans Rapid Cross Canada Expansion Retail Insider 12/3 Bowlero Commits to Long-Term Tenancy in Aliso Viejo, CA Shopping Center Costar 11/30 NAP to Add Entertainment Elements to 2.4 MSF Avalon Mixed-Use Development in Atlanta Shopping Center Business 11/29 Disneyland Files Construction Permits for $8M Food Hall San Jose Mercury News 11/28 Puttshack to Debut in Addison, TX FSR Magazine 11/28 Pickleball Mania is Sweeping Phoenix: Five of Top 20 Leases in 2023 Were Pickleball Deals Costar 11/28 Topgolf Opens Third Venue in Alabama and 95th Overall Shopping Center Business 11/28 Pinstripes Eyes Global Identity as Demand for Experiential Dining Surges FSR Magazine 11/2
Gallelli Real Estate - www.gallellire.com
Issue No. 17 | December 13th, 2023
POP-UP-A-PALOOZA Blackberry is Opening a Popup Store in NYC Cellular News 12/12 The Pinterest Popup Store in NYC: A Showcase of Future Trends TickerTV News 12/10 Tyler, the Creator’s Golf Wang Opens Holiday Pop Up in Chicago Axios Chicago 12/8 Tyler, the Creator, Opens New Golf le Fleur Popup in Culver City, CA WWD 12/8 Frosty’s Christmas Themed Popup Bars Showcasing the Allure of Experiential Marketing Forbes 12/8 Bal Harbour Shops’ Moveable Feast WWD 12/7 Bomber’s Luxury Play WWD 12/7 Apple is Opening a Taylor Swift Popup Experience in NYC Music Ally 12/4 A Creepy Christmas Pop-up Celebrating Krampus is Opening in NYC Time Out 12/1 Tanner Fletcher Opens First Retail Popup WWD 11/27
HIGH STREET HAPPENINGS Hermes Reopens Las Vegas Bellagio Store Fashion Network 12/12 Kith to Open Women’s Store in NYC WWD 12/11 La Ligne Opens First West Coast Store, Plots Expansion WWD 12/11 Swarovski Opens Flagship on New York’s Fifth Avenue Fashion Network 12/10 Tod’s Unveils NYC Flagship Retail & Leisure International 12/8 Still Here Brings Downtown Cool to New Madison Avenue Store Glossy 12/7 Citizen Opens First US Store on Fifth Avenue Glossy 12/6 Sunspel is Mapping Out New Retail Territory in California WWD 12/6 Aether Opens New Store in SoHo, NYC Fashion Network 12/5 Italian Home Furnishing Brand Poliform Taking a Seat in Georgetown Commercial Observer 12/5 Bogner Opens Flagship Stores in NYC and LA Fashion Network 12/1 Tanishq, Indian’s Top Jewelry Retailer, Expands US Presence w/New Texas Stores Cision PR Newswire 12/1 Lulu’s Fashion Lounge is Opening First Permanent Store on LA’s Melrose Modern Retail 11/30
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 17 | December 13th, 2023
Madhappy Opens First Store in LA Modern Retail 11/30
Casey’s Acquires 11 Former EZ GO Stores in OK and NE Convenience Store News 12/1
Kirna Zabete Unveils Newest Boutique in Nashville; Opening in Miami in June 2024 WWD 11/29
Little Words Project to Open 11th Store in Mall of America Retail Dive 12/1
RETAIL CHAIN STORE OPENINGS AND GROWTH
Cos Enters Brooklyn WWD 12/1
Uniqlo to Expand in North America in 2024 Fashion Network 12/12
Container Store Reaches Milestone Opening: 100th Store Retail & Leisure International 11/30
MINISO Opens 100th US Store in Orlando Cision PR Newswire 12/12
Crunch Fitness Expands Into Anaheim, CA Costar 11/30
Macy’s Future Up in the Air WWD 12/11
EoS Fitness Opens 42K SF Gym in Phoenix Shopping Center Business 11/30
Vuori Opens Second NYC Store Retail Dive 12/11
Victoria’s Secret Shows Off Updated Store Design Retail & Leisure International 11/29
Costco Buys Land in Suburban Houston for Third Location in Fort Bend County Costar 12/11
Buybuy Baby Brings Back Brick and Mortar Under New Parent: Wants 100 Stores in 3 Years Bisnow 11/28
Bang & Olufsen Opens Doors to NYC Flagship Showroom Retail & Leisure International 12/11
Batteries Plus Builds Florida Footprint w/6 Unit Agreement Franchise Times 11/28
Pickle Opens Peer-to-Peer Fashion Rental Storefront in NYC Fashion Network 12/10
Fitness International Signs 36.5K SF Lease in Manhattan Shopping Center Business 11/28
Birkenstock Opens Miami Design District Store Fashion Network 12/9
Diamonds Direct Opens 6K SF Store in Aventura, FL Shopping Center Business 11/28
Circle K Parent Charts Mix of Growth Opportunity Convenience Store News 12/8
Wilson Sporting Goods Expands Presence with Store at Mall of America Modern Retail 11/28
BJ’s Wholesale Club to Open New Clubs in Ohio and Tennessee Shelby Report 12/8
Nordstrom Pushes Rack Expansion as Full-Line Fleet Contracts Fashion Dive 11/27
26-Unit Rusty Lantern Debuts Next Generation Convenience Store Convenience Store News 12/7
THE GROCERY AISLE
Dollar General to Open 800 Stores in 2024 Grocery Dive 12/7
BJ’s Whole Sale Club to Open Second Tennessee Warehouse Store Winsight Grocery Business 12/11
630+ Unit Men’s Wearhouse Announced New Store Opening in Burlington. NC Cision PR Newswire 12/7
Stater Bros. Introduces New Supermarket in Ontario, CA Shelby Report 12/8
Eileen Fishers Newest Store Takes Advantage of Historic District Filled With Charm WWD 12/7
Aldi Opens Nearly a Dozen Stores Across 10 States in December Supermarket News 12/8
It’Sugar Expands in Florida Retail & Leisure International 12/7
Grocery Openings Pick Up in November: 33 New Stores Opened Nationally Winsight Grocery Business 12/7
Sears is a Shell of its Former Self. So Why is it Reopening Some Stores? Retail Dive 12/6
H-E-B Opens Joe V’s Smart Shop in Katy, TX Shelby Report 12/7
DTC Shoe Brand Wolf & Shepherd to Open First US Flagship in Manhattan Costar 12/5
Brookshire Grocery Plans New Generation Fresh Banner Store in Longview, TX Grocery Dive 12/7
Daiso Opening New Phoenix AZ Store Cision PR Newswire 12/5
Chicago Business Owners Dispute Proposed Foxtrot Location Grocery Dive 12/7
36-Unit Beauty & Wellness Concept 4Ever Young Wants to Hit 50 Units by End of 2024 Franchise Times 12/4
Meijer to Open Fairfax Market in Cleveland Supermarket News 12/6
Airbrush Tanning Concept Pure Glow to Franchise Following $1.4M Seed Funding Franchise Times 12/4
Publix Set to Open First Kentucky Store in January Winsight Grocery Business 12/6
Paris Saint-Germain Store to Relocate to Larger Space in NYC WWD 12/4
Trader Joe’s to Open Store in Forest Hills, NY Winsight Grocery Business 12/6
Academy Sports + Outdoors Adds Seven New Stores Now at 282 Units Retail & Leisure International 12/4
Cardenas Markets to Debut 6th Las Vegas Store Grocery Dive 12/5
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JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 17 | December 13th, 2023
Meijer to Open Latest Small Format Store in Early 2024 in Cleveland Grocery Dive 12/5
16-Unit Atomic Wings to Debut in Indiana Next Year QSR Magazine 12/8
Chicago Developer Signs Indy Grocer Commissary Market to Proposed Chicago Apartment Tower Costar 12/5
Is Poke Ready for Another Growth Surge? QSR Magazine 12/8
Wegmans Updates Planned Store Openings in PA, NY Winsight Grocery Business 12/5 Whole Foods Store Will Anchor $112M Mixed-Use Project in Arkansas Supermarket News 12/4 Inside Giant’s New Riverwalk Flagship: What the Food Shopping Experience Can Be Winsight Grocery Business 12/4 Grocery Outlet to Open 4 New Stores in 4 New States Winsight Grocery Business 12/1 Natural Grocers Relocations Store in Albuquerque, NM Shelby Report 11/30 Price Chopper Purchases Five Former New York ShopRite Stores Grocery Dive 11/29 Whole Foods to Open 50K SF Store in Madison, WI Shopping Center Business 11/27
FOOD & BEVERAGE Will CosMc’s Challenge Starbucks and Dutch Bros? QSR Magazine 12/12 Fogo de Chao Opening Fourth NYC Location in the Oculus Commercial Observer 12/12 379-Unit Biggby Coffee Finishes Year w/150 Units in Development on Way to 500 Goal QSR Magazine 12/12 Jeff’s Bagel Run Announced Eighth Store in Central Florida QSR Magazine 12/12 46-Unit Grimaldi’s Pizzeria Continues Expansion in Alabama Pizza Marketplace 12/12 Caribou Coffee Expands Into Florida Retail & Leisure International 12/12 Shake Shack Expands Drive-Thru Locations w/New Las Vegas Restaurant Costar 12/11 64-Unit Mr. Pickle’s Plots CA and AZ Expansion Following Brand Revamp Franchise Times 12/11 Tijuana Flats Opens First Unit in Tennessee QSR Magazine 12/11 Gong cha Signs New Master Franchisees in the US w/Goal of 1,000 North American Stores by 2026 QSR Magazine 12/11 Scooter’s Coffee Opens 750th Location QSR Magazine 12/11 McDonald’s Getting into the Cold Coffee Business w/New Pilot Store Globe Street 12/8 Hawaiian Bros Franchisee Opens Two Stores in One Week QSR Magazine 12/8 90+ Unit La Madeleine Looks to Ramp up US Franchise Growth QSR Magazine 12/8
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Margarita’s Forges Ahead with East Coast Expansion Franchise Times 12/7 Sixty Vines to Debut in Virginia FSR Magazine 12/7 Zaxby’s Announces Midwest Expansion QSR Magazine 12/7 Golden Corral Spinoff Jomeward Kitchen Opens in Southern Pines, NC QSR Magazine 12/7 Smoothie King Signs Deal to Grow in Vegas and Chicago QSR Magazine 12/7 Slice House by Tony Gemignani Enters Texas Market Pizza Marketplace 12/6 McDonald’s Looks to Add Nearly 9,000 Global Locations by 2027 Costar 12/6 Wagamama to Open First Texas Location in Dallas FSR Magazine 12/5 Checkers & Rally’s Looks to Accelerate Arizona Growth QSR Magazine 12/5 Mountain Mike’s Pizza Signs Franchise Deal for 10 Locations in Washington Shopping Center Business 12/5 Pizza Factory Opens in Arnold, CA Pizza Marketplace 12/5 Walk-On’s Opens in La Porte, TX FSR Magazine 12/4 Dave’s Hot Chicken Locks in Deal for Six More Locations QSR Magazine 12/4 530+ Unit Captain D’s Opens in Claxton, GA QSR Magazine 12/4 Fast Food Joints Recall Heyday of American Roadside Architecture Costar 12/4 Slim Chickens Signs Franchise Deal for Five Locations in Virginia Shopping Center Business 12/1 First Watch Signs Lease at 63-Acre Mixed-Use Property in Fort Worth TX Shopping Center Business 12/1 Charleys Philly Steaks Franchisee Expands in Painesville OH Cision PR Newswire 12/1 Jack in the Box Welcomed in New Markets w/Open Arms QSR Magazine 12/1 Georgia-Based Amici Italian Café Opens 13th Unit, Will Add Another in Early 2024 FSR Magazine 11/30 Salt Lick BBQ to Open at New Development in Fredericksburg TX FSR Magazine 11/29 Keke’s Breakfast Café Shows Off New Growth Playbook FSR Magazine 11/28 Fox Restaurant Concepts to Open Doughbird in Dallas QSR Magazine 11/28
JKG
THE GALLELLI GAZETTE Retail Roundup
Golden Chick Opens Two New Units in Texas QSR Magazine 11/28 Mo’ Bettahs to Open Second Las Vegas Location QSR Magazine 11/28
LOCAL MARKET NEWS Average Retail Lease Size in Minneapolis Hits Six-Year High, Bucks National Trend Costar 12/12 Fontainebleu Las Vegas Announces Retail Partners WWD 12/11 Phoenix Retail Space Availability Falls Below US for First Time in 15 Years Costar 12/11 Retail Tenants in Portland OR are Holding On to Their Space Costar 12/11 Indianapolis Retail Rent Growth Expected to Cool Costar 12/7 Small Tenants Drive Bulk of Recent Retail Leasing in San Diego Costar 12/6 Demand for Retail Space in Grand Rapids, MI Improves Since Last Year Costar 12/6 Retail Availability Rate Near 15-Year Low in Sacramento Costar 12/4 Phoenix and Palm Beach Boast Strongest Retail Rent Growth in US Costar 11/29 Omaha, Nebraska’s Average Retail Lease Size Hits All-Time Low Costar 11/29
RETAIL CHAIN STORE CLOSINGS AND CONTRACTION Boston Market Owner Jay Pandya Files Personal Bankruptcy QSR Magazine 12/12 eCom Player Zulily to Cut More Than 800 Jobs Amid Shutdown Retail Dive 12/11 Saks to Vendors: ‘We Have Sufficient Liquidity’ WWD 12/7 Walgreens Shutters 10 Florida VillageMD Clinics Supermarket News 12/7 Rite Aid Store Closings Mark Shopper Acquisition Opportunity for Other Merchants Winsight Grocery Business 12/7 Rite Aid Plans to Sell 79 More Stores Retail Dive 12/5 Rite Aid Closing 31 More Stores as Bankruptcy Proceedings Continue Retail Info Systems 12/4 Activewear Brand Bandier Seeks Buyer for IP, Assets Retail Dive 12/1 Dollar Tree May Shrink Family Dollar Footprint Grocery Dive 11/30 Kitchen United Closes all Kroger Locations as Ghost Kitchen Company Shifts to Software Focus Supermarket News 11/29
Gallelli Real Estate - www.gallellire.com
Issue No. 17 | December 13th, 2023
M&A’S, IPO’S, AND OTHER SHENANIGANS Lowball Bid Could Spur Macy’s to Look for Better Options Reuters 12/12 Soft Surroundings Acquired by Coldwater Creek Retail & Leisure International 12/11 Macy’s Investors Mount $5.8B Buyout Bid Reuters 12/11 UFCW: Study Concludes Kroger-Albertsons Merger Would Sap Labor Power Winsight Grocery Business 12/7 Shein’s IPO and its Quest for Legitimacy: Analysts Weigh In Fashion Dive 12/1 PFSbrands Acquires Mid-Missouri Grocer Moser’s Foods Grocery Dive 12/1 Barre3 Buys The Barre Code, Bringing Brand to 185 Studios Franchise Times 12/1 Shein Reportedly Files for IPO Fashion Dive 11/28
CULTURE CORNER: THE DEATH OF A PUB SINGER
The music world lost one of its most unique voices and characters nearly two weeks ago with the death of the Irish singer and songwriter Shane MacGowan. Noted as much for the artistry of his lyrics and music as for his heavy alcohol use and bad teeth, The New York Times once described him as “a titanically destructive personality and a master songsmith whose lyrics painted vivid portraits of the underbelly of Irish immigrant life.” MacGowan was born in 1957 in Tipperary, Ireland and discovered literature at an early age. By the age of 11 he was reading James Joyce and Fyodor Dostoevsky. By 13 he had won a literary contest sponsored by the British tabloid, The Daily Mirror, and won a scholarship to the prestigious Westminster School in London. But MacGowan had been introduced to drink at an early age, stating in later interviews (usually conducted while he was inebriated) that his family gave him two bottles of Guinness per night to help him sleep starting at the age of five. He would later claim, “I was smoking and drinking and gambling before I could talk.”
JKG
THE GALLELLI GAZETTE Retail Roundup
Issue No. 17 | December 13th, 2023
MacGowan would be kicked out of the Pogues in 1991, having become too unreliable, though they would later briefly reunite. By 1999, his friend Sinead O’Connor had become so distressed by his heroin addiction that she turned him into the police. The arrest would help him wean off narcotics for the last 30 years of his life, but the drinking would continue nearly unabated until near the end. Though MacGowan would later reunite with the Pogues for a tour and have a modestly successful solo career, his health—always fragile due to the impact of his lifestyle—began to deteriorate. He lost the last of his natural teeth in 2008 and eventually had implants installed in what the English paper The Guardian referred to as the ‘Everest of dentistry.” But after decades of abuse, MacGowan was wheelchair bound by 2015 and repeatedly hospitalized over the years for ailments ranging from ulcers to viral encephalitis. His body finally gave out after a long bout with pneumonia on November 30th, less than a month shy of his 66th birthday. MacGowan would move on to harder substances while away at school, including heroin. He would eventually be expelled for his drug use and by the age of 17 spent six months in psychiatric care at the Bethlem Royal Hospital in London in his first attempt at rehab. Upon his release, he became active in the London punk scene of the late 1970s under the alias Shane O’Hooligan. He worked in a record shop, attended gigs, started his first band and self-published a punk rock fanzine. He also fell further into both drug and alcohol dependency. In 1982, he co-founded the band, The Pogues fusing punk influences with traditional Irish music. The band met near immediate critical acclaim, even as MacGowan’s antics worsened. On one occasion, he reportedly took 100 tabs of LSD and ate a Beach Brothers album, causing his mouth to bleed profusely. Throughout the 1980s he was repeatedly injured in falls. His habit of walking drunkenly into traffic and his occasional bar fights meant he often performed bloodied and battered. By this time, MacGowan’s already crooked teeth were beginning to rot and fall out—becoming one of his trademarks. As were his drunken performances and interviews with the music press. But in the mid-1980s MacGowan was not only building his reputation for excess, but that as a deeply talented songwriter and lyricist. The music industry at that time didn’t quite know what to make of him and the Pogues, marketing them as a college alternative band in the US and looking to capitalize on the group’s early punk influences. MacGowan would later say, “I’m not so much a rock star… I play Irish music. There’s really no age when you stop playing Irish music. Even if I retired from playing onstage, I’d still be singing in pubs.” Elvis Costello sought him out and ended up producing the Pogues’ breakout album, “Rum, Sodomy and the Lash” in 1985 which would reach number 13 on the UK charts and be described by one critic as “a proud, defiant bruise of an album that manages to be both profoundly bleak and immoderately romantic.” It was during the recording of this album that MacGowan would write what would become their biggest hit, “Fairytale of New York.” The song reportedly came about when Elvis Costello challenged MacGowan to record “an interesting” holiday song. This Irish folk-style duet would become a UK Christmas favorite, reaching number two on its original release in 1987 and charting again every Christmas since 2005. However, MacGowan’s drinking only continued to intensify. The actor Kiefer Sutherland would later recount meeting MacGowan at a bar in London. The two got into a fight that ended with both rolling around on the floor and having to be separated. The anecdote is best provided by Sutherland himself (click here to listen), but tends to be par for the course for Shane MacGowan stories.
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But, despite his rowdy persona and his deeply troubled life, MacGowan became a beloved figure in Ireland, which would honor him with a public procession through the streets of Dublin on December 8th, followed by a funeral attended by the President of Ireland, Michael Higgins who stated, “Shane will be remembered as one of music’s greatest lyricists. So many of his songs would be perfectly crafter poems, if that would not have deprived us of the opportunity to hear him sing them.” McGowan reportedly left aside $12,500 to cover the beer tab for mourners at his own wake as a last request. Meanwhile, the Pogues’ holiday anthem, “The Fairytale of New York,” is back on the
UK charts and expected to finally hit number one. The Pogues: I’m a Man You Don’t Meet Every Day The Pogues: Dirty Old Town The Pogues: A Pair of Brown Eyes The Pogues: The Band Played Waltzing Matilda The Pogues: Fairytale of New York Fairytale of New York performed at Shane MacGowan’s funeral
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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.