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Week Ending February 19th, 2022

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Brown's Rants

No Closure Season This Year Thanks to Sustained Consumer Spending Boom

Once again, we had a week in which store opening announcements far outpaced closure news. The first quarter of the year—more specifically January and February—has traditionally been the time (in good years and bad) where retailers, after the holiday rush, look to optimize their store fleets. Yet, that simply isn’t happening this year outside of a few brands. There are two basic reasons for this.

Before the CoVid-19 crisis, chain store and restaurant closures were already heightened. Remember, this was the era of the “retail apocalypse” headlines. In 2017, we tracked 8,500 major chain closures (chains with at least 50 stores). That number fell in 2018 to 7,300 and then shot up to 11,500 in 2019. But the arrival of the CoVid-19 crisis brought roughly 27,000 closures in 2020.

I had always found the “retail apocalypse” headlines annoying in their lack of nuance; they painted the entire sector with the same broad, bleak brush (as opposed to delineating the fact that the “apocalypse” was only impacting certain retail categories—others were booming). But in 2020, we saw something as close to a real “retail apocalypse” as I hope we will ever see in our lifetimes. In that year, the market contracted at a pace 3X the average of the previous three years combined. But this time, it included those categories that had previously thrived (restaurants, gyms/health clubs, entertainment, experiential, etc.). Only the discounters, dollar stores, and grocers seemed to be spared.

But the pandemic economic downturn ended up being one of the shortest in U.S. history and easily the strangest and most lopsided. Thanks both to the disparate impacts of the pandemic and immense amounts of stimulus, consumers started going on a spending spree before the close of 2020.

That spending spree continued in January 2022, despite the Omicron variant’s rampage, worker shortages, and 40 year-high inflation. Ultimately, what happened in 2020 was that retail’s nasty bandage was ripped off all at once, only to be followed by an unprecedented surge in consumer spending that has proven to be remarkably sustained and deep.

In the 20 years before the pandemic (2000 through 2019), retail sales growth averaged 3.6% annually. January’s numbers put us at 12.7% growth over 2021—but more importantly, at 23.3% above January 2020, before CoVid hit. This stretches across every retail category, including restaurants—which despite Omicron issues are still up 8.6% from pre-Covid January 2020 totals (they were up 27.9% over last year, but that was still before consumers had fully returned to eating out).

How long will this continue? Well, according to the Federal Reserve, Americans are still sitting on about $5 trillion more in their bank accounts today than before the pandemic. Stock market volatility, inflation, war, and other black swan events are all risks… but for the first time in about 15 years when I look at the risks to retail ahead, I am talking about cyclical economic risks… not structural issues created by the disruption of eCommerce. It’s a really nice change.

See you next week.

Garrick

Ten Retail Brands to Watch in 2022
Chain Store Age 2/18

The Pandemic’s Toll in CA and FL Revisited; Trading Off Saving Lives for Preserving Jobs
Medium 2/18

Its Still Early to Know if CRE Will Treat the Metaverse as Real
Globe Street 2/18

Americans Are Emerging From the Pandemic Ready to Splurge on Events and Travel
Wall Street Journal 2/17

The Surprising Upside to the Big Quit
Medium 2/17

Monthly Retail Sales From US Commerce Department
Retail Dive 2/16

Retail Sales Jumped in January
New York Times 2/16

Kohl’s Plans 400 Sephora Shop-in-Shops for 2022
Retail Dive 2/15

Officials Push Back Against Rapid Grocery Delivery
Grocery Dive 2/15

Selling Out: What Retailers Need to Know Before Striking a Deal With Private Equity
Retail Dive 2/15

Economic Headlines stories of the week

As Omicron Variant Rises, Lab Studies Point to Signs of Severity
CNN 2/19

Michigan’s First Cannabis Consumption Lounges Will Likely Soon Be Open
Crain’s Detroit Business 2/18

Retailer and Consumer Shift to Open-Air Malls to Continue Past Pandemic
PYMNTS 2/18

Bust to Boom: The Retail Resurgence
EisnerAmper 2/18

Gen-Z and Millennials are More Likely to Buy Products Described as…
YPulse 2/16

The Four Day Work Week is Gaining Ground in Europe; It’s Time Americans Give it a Serious Look
Washington Post 2/15

Only 3% of White Collar Workers Want to Return to the Office Full-Time
Fortune 2/14

Inflation Hits Low Income Americans Hardest of All
Washington Post 2/13

Property Trends stories of the week

Can a Giant Empty Sears Building Help Solve LA Homelessness
Los Angeles Times 2/19

Improved Leasing Provides Boost to Milwaukee Retail
Costar 2/18

Non-Traditional Tenants Could Diversify San Antonio’s South Side Retail
San Antonio Business Journal 2/18

Marshalltown (IA) Mall Small Business Owners Rethinking Mall Strategy
We Are Iowa 2/18

Still Tough Out There for Retail But Costar Sees Hope
REJournals 2/17

Evanston IL Shopping Center Doubles Occupancy in Two Months
Chicago Business Journal 2/16

Urban Retail Not Recovering Like Malls & Shopping Centers
The Real Deal 2/15

NYC Retail—Manhattan High Street—May Never Fully Recover
The Real Deal 2/15

Retail Headlines stories of the week

A Look Inside Amazon’s New Fashion Store
CNBC 2/19

The RealReal Opens 19th Store
Sourcing Journal 2/19

Discover the Galaxy—Samsung’s Fifth Experience Store Opens in Texas
Samsung 2/19

Warby Parker Opens Sixth Ohio Store
Cleveland Business Journal 2/18

Target Coming to Port Chester’s Gateway Shopping Center
Greenwich Free Press 2/18

Allbirds Opening in Carlsbad, CA
Bakersfield.com 2/18

PetSmart Planning Vallejo CA Store
What Now SF 2/18

Sears Hometown Closes Saginaw (MI) Mall Store
Mlive.com 2/18

Williams Sonoma Reopening in San Antonio at New Location
MySA 2/18

Hobby Lobby Taking Former JC Penney in Montrose CO
Montrose Press 2/18

QuikTrip Brings Travel Concept to Alabama
Convenience Store News 2/18

Case Study: Foxtrot—Reimagining the C-Store Experience
Food Institute 2/17

Kering Flags Possible M&A and US Expansion as Gucci Rides Luxury Boom
Reuters 2/17

Allbirds Launches ReSale Program for Used Footwear
Retail Dive 2/17

Nike May Vacate Georgetown Store
Washington Business Journal 2/17

The Great Luxury Bounceback: How Brands Like Burberry Are Returning to Growth
The Drum 2/16

Brooks Brothers Permanently Closes, But Other Stores Join Durham’s (NC) Southpoint Mall
News Observer 2/16

RH Outlet to Open in Louisville
Louisville Business First 2/16

Five Below to Open Times Square Flagship
Chain Store Age 2/16

Hobby Lobby to Open in Clarksburg, WV
WVNews.com 2/16

Kendra Scott Opens at Disney Springs
West Orlando News 2/16

Visionworks Expands in Richardson TX
Community Impact 2/16

Sherwin Williams & Others Opening Stores in Round Rock TX
Community Impact 2/16

Forte Forte Opens First US Store
WWD 2/15

RH Proposes New Cleveland Store
Crain’s Cleveland Business 2/15

British Travel Retailer WHSmith Makes US Debut
Chain Store Age 2/15

DTC Sock Retailer Bombas Exploring IPO
Bloomberg 2/14

Grocery Headlines stories of the week

Amazon’s Sprawling Grocery Business Has Become an Expensive Hobby with a Cloudy Future
CNBC 2/18

Details of Whole Foods New SF Flagship Emerge
Winsight Grocery Business 2/18

HEB Likely to Anchor New San Antonio Center
MySA 2/18

Cubs Opens 30th Wine & Spirits Store in Maple Grove MN
Winsight Grocery Business 2/18

Sprouts Opening in Homestead FL
Winsight Grocery Business 2/18

Fareway Opens Store in Iowa With More on the Way
Winsight Grocery Business 2/18

Aldi Opens Two More DC Area Stores Next Week
WTOP 2/16

Sprouts Plans New Miami Location
REBusinessOnline 2/16

Restaurant News stories of the week

Peter Piper Pizza Opening Fast Casual Express Locations
Business Insider 2/19

Jollibee Opens at American Dream Mall
Asian Journal 2/19

Coffee Shop Sweetwaters, Now Open in Frisco, Continues to Expand in DFW
Dallas Morning News 2/19

Inside New Midtown Manhattan Food Hall, The Hugh
4 New York 2/19

New Food Hall, The Mosaic, Coming to Detroit’s Eastern Market
Eater Detroit 2/18

Shake Shack Coming to Richmond VA
Richmond Biz Sense 2/18

Bojangles Inks Virginia Franchise Deal
QSRWeb 2/18

Booze & Burritos; Taco Bell Cantina Opens in KC Area
KansasCity.com 2/18

Freddy’s Expansion Continues in 2022; to Double Footprint in Four Years
Chain Store Age 2/18

Dog Haus to Expand National Footprint by 50% in 2022
Restaurant News 2/16

The First Food Hall in Prince George’s County Has New Name & Owner
Washington City Paper 2/16

Plans for a New Food Hall in Charlotte, NC
Fox46.com 2/16

Taco John’s to Continue Growth in 2022
QSRWeb 2/18

Whataburger to Open First Colorado Restaurant
Denver Gazette 2/17

Stan’s Donuts Opens New Chicago Location
Block Club Chicago 2/17

Jeremiah’s Italian Ice Continues Rapid Growth in the Southeast
Restaurant News 2/16

Reno Gets New In-n-Out and Chipotle w/Drive Thru
Reno Gazette Journal 2/16

New Food Hall, The Hall at Ashford Lane, Part of Perimeter Place Revamp
Atlanta 2/15

Fords Food Hall Now Open in ROAR Building on North Liberty
Winston Salem Journal 2/15

Food Hall, High Street Place, to Take on Boston Food Scene This March
Suffolk Journal 2/15

Chipotle Launches Another Drive-Thru in Orlando
Orlando Business Journal 2/15

REITs, Landlord & Development stories of the week

Empire State Realty Trust Eyes More Multifamily, Retail Diversification
Bisnow 2/18

Disney to Develop Branded “Storyliving” Communities with Shopping, Dining
Chain Store Age 2/18

Kimco May Develop South Miami Retail Center to Mixed-Use
South Florida Business Journal 2/18

ecommerce, omnichannel, retail tech stories of the week

Take A Look Inside a Staff-Free Fully Autonomous, Robot Kitchen
Business Insider 2/19

Will Timberland’s Stores Lure Consumers to the MetaVerse
Retail Wire 2/18

White Castle Orders 100 Fast Food Robots
Robotics and Automation 2/18

Kroger to Expand Delivery Service to Oklahoma City
Grocery Dive 2/18

Should More Retailers Be on Roblox
Retail Dive 2/17

Save Mart Adds Robotic Delivery to Another Store (Pleasanton, CA)
Grocery Dive 2/17

Luxury Retailer Shifts Store Operations to Mobile Platform
Chain Store Age 2/17

DoorDash Rolls Out 30 Minute Delivery With Albertson’s
Grocery Dive 2/17

GrubHub Expands Convenience Channel GrubHub Goods Nationwide
Retail Dive 2/16

Jamba Opens Robot Kiosks at Two Colleges
Chain Store Age 2/16

Farmstead Arrives in Chicago; Ultrafast Delivery Concept Enters Fifth Market
Grocery Dive 2/15

Southern C-Store Retailer Mapco to Add Checkout-Free Shopping
Chain Store Age 2/15

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