Wednesday, October 19, 2016

Preview : Hartford, CT 10-Year Retail Category Special Section

Dramatic Changes in Retail Tenant Store Count and Square Footage Reflect Changes in Lifestyle and Shopping Habits:

In earlier Special Sections we’ve explored long-term changes in the Grocery and Restaurant categories. This year we’ve analyzed 10 years of data on occupancy changes in all retail tenant categories in Greater Hartford, and as we saw in Eastern Massachusetts and Southern New Hampshire, the social values, shopping habits, and lifestyle choices of shoppers in this region have clearly influenced the retail real estate landscape to a high degree.

During this time period, consumers were hit with the Great Recession and emerged on the other side as more value-conscious shoppers. As a result, the past ten years has offered significant opportunity for dollar store development. Among the big three-Dollar Tree, Dollar General, and Family Dollar-store count has gone from 21 to 43 units, making Variety Stores the fastest growing segment of retail space.

As noted earlier in this report, Medical & Dental Services is increasingly becoming a common tenant in shopping centers as demand for traditional retailers has eased somewhat. This trend is certainly reflected in its number two ranking, with this category more than doubling in space since 2006. Ironically, Drinking Places and Health & Fitness Services ended in a virtual tie, each category upping space by about one-half.

While the recession caused shoppers to be more cautious in their shopping in a number of categories, they were less willing to cut back when it came to pets. Consequently, the Pet Shops & Pet Supply Stores category increased its store count by more than 25% in the past decade, good enough to top the list among merchandise categories.
Medical & Dental Services and Drinking Places also finished in second and third place in the growth rate of new units just as they did in square footage.

The charts below track percentage changes in expansion and contraction by major retail tenant categories from 2006 through 2016 by square footage.

Bob Sheehan, Vice President of Research

The 2016 KeyPoint Report for Greater Hartford, CT will be available very soon. The 2016 KeyPoint Reports for Eastern Massachusetts/Greater Boston and Southern New Hampshire are available now at

KeyPoint Partners Company News

Retail Leasing: Vice President of Leasing Don Mace has negotiated a lease with Mr. Mac’s Macaroni & Cheese for 3,971 square feet of space at Tyngsboro Crossing, Tyngsboro, Massachusetts. Congratulations to our leasing team for completing new, renewal, and temporary leases at shopping centers in MA, RI, and CT totaling more than 103,000 SF with tenants such as Spirit Halloween, Gentle Dental, Webster Bank, Best Buy, Olympia Sports, Mooyah Burgers, and others... New Employees: Cheryl MacDougall joined the Burlington, MA office as an Accounts Payable Data Entry Clerk; Carl Fiantago joined the Burlington Office as Property Manager.

National Retail News

US retail sales rose 0.6% in September, a rebound after sales slipped 0.2% in August, the Commerce Department said. Department stores suffered a 0.7 % sales decline in September, part of a broader, long-term setback for anchor tenants at many malls that are competing with online outlets for customers. Stabilizing oil prices meant sales rose 2.4% at gas stations. Spending at restaurants improved 0.8%, while auto dealers, building materials stores and furnishers showed gains of 1% or more. During the first nine months of the year, retail sales have increased 2.9% over 2015. Among retailers still reporting monthly same-store sales, L Brands was up 3.0%, Gap was down 3.0%, and Costco was flat. See our sales reports below.

Accelerating Retail News

The parent company of 7-Eleven wants to more than double its US store portfolio. 7-Eleven Japan Co. is looking to open thousands of new stores in the US, increasing its current total of app. 8,500 locations to 20,000...ZIPS Dry Cleaners has signed leases for its next 4 stores, in California, Texas, Maryland and Pennsylvania. ZIPS operates nearly 50 stores in the Mid-Atlantic region...Dairy Queen is looking to the Buffalo Niagara area as a prime expansion market, adding 100 stores. Dairy Queen has more than 6,700 locations worldwide...Old Chicago Pizza & Taproom has signed franchise development agreements with three of its existing franchise partners to open nearly two dozen new restaurants across eight states. Old Chicago operates in 24 states with more than 100 restaurants nationwide... Fun Eats and Drinks LLC, a company formed by private-equity firm Kelly Investment Group, won an auction last week to acquire Last Call Guarantor LLC, the owner of sports bar chains Fox & Hound and Champps, out of bankruptcy with a bid of $26.8 million. Last Call operates 37 Fox & Hound restaurants, 14 Champps units and 4 Bailey’s locations....Club Pilates is projected to have 150 US studios before the end of 2016, and announced the sale of 300 new franchised locations in 27 states...Tractor Supply Company has paid $116 million to acquire Petsense LLC, a specialty retailer of pet supplies and services with 136 stores across 25 states...Cabela’s Inc agreed to be bought by Bass Pro Shops in a deal valued at $5.5 billion. The combined company will own 184 stores in the US and Canada... ThreeSixty Group has acquired FAO Schwarz from Toys “R” Us. The terms of the transaction were not disclosed.  Toys “R” Us purchased FAO Schwarz in 2009.  ThreeSixty has designed a portfolio of owned and licensed brands including Sharper Image, Black Series, Discovery Kids, Smithsonian, and Animal Planet. FAO Schwarz was the oldest toy store in the US when its sole remaining store, on Manhattan’s Fifth Avenue, closed in 2015. A new FAO Schwarz toy collection, designed by ThreeSixty, will be available at select retailers in the fall of 2017... Ross Stores is opening 25 Ross Dress for Less stores and 9 dd’s Discounts stores across 16 different states by the end of October, part of a plan to add approximately 90 locations in 2016. The company currently operates 1,342 Ross locations in 36 states, the District of Columbia and Guam, along with 193 dd’s Discounts stores in 15 states...Macy’s plans to open LensCrafters stores inside 280 locations by the end of 2017. The eyewear retailer is owned by Luxottica, as is Macy’s existing in-store partner Sunglass Hut. Macy’s currently operates about 675 full-line stores, but has announced it will be closing 100 stores by early 2017...Ulta Beauty raised its outlook for US store expansion to a range of 1,400 to 1,700 stores, with new stores targeted to smaller markets and urban markets. As of October 1, 2016 the company operates 928 retail stores across 49 states...Save-A-Lot plans to open 75 new stores in fiscal 2017, and believes the US can eventually support more than 3,500 stores. Save-A-Lot currently has 1,368 stores nationwide.

Decelerating Retail News

Golfsmith International Holdings Inc. filed for bankruptcy, hoping to reorganize or attract a buyer. Golfsmith said it would try to sell part of the chain while shutting some stores. If that fails, the Austin, Texas-based company will liquidate. The company blamed an aggressive plan that began in 2011 to open bigger stores that cost more to operate just as golf began to lose popularity...Kmart is closing 64 locations, in addition to a decision in April by parent Sears Holdings Corp. to close about 68 Kmart stores this year... Garden Fresh Restaurant Corp., owner of Souplantation and Sweet Tomatoes, has filed for bankruptcy. The company plans to close locations and put itself up for sale. Garden Fresh plans to close 20 to 30 underperforming locations. The company has 124 units, primarily on the West Coast and in the Southwest. The brands are known as Souplantation in Southern California and Sweet Tomatoes elsewhere....Red Robin Gourmet Burgers Inc. has closed 9 of its fast-casual Burger Works locations and is rebranding the remaining 3 as Red Robin Express...Walmart  will slow the pace of new store openings to focus on online sales, improve existing stores, and invest in tech. Walmart now plans to open 130 US stores this year, less than the 135 to 155 stores it had forecast previously (and compared to 230 last year), and only 55 stores next year. Walmart operates about 4,500 US stores... Supervalu is selling its Save-A-Lot supermarket chain for $1.37 billion to Canadian private equity firm Onex Corp. The deal is expected to close before the end of January. There are more than 1,300 Save-A-Lot grocery stores.

New England Retail News

Boston’s second Trader Joe’s, the first within city limits to sell alcohol will open in Allston next year at the Continuum, a 335,000 s/f residential/retail project 219 Western Ave.  The first Boston Trader Joe’s opened in 2001 in Back Bay. Trader Joe’s operates 18 MA stores. Nationwide, the company operates 455 stores in 41 states...H&M closed its 35,000 s/f store in Boston’s Downtown Crossing. H&M has stores on Newbury Street and in Cambridge...Krispy Kreme is opening 3 stores in Maine and 4 in New Hampshire under the franchise name NH Glazed LLC. The first will be completed this fall... Fast casual chain Cosi, Inc. filed voluntary Chapter 11 petitions in the US Bankruptcy Court. There are currently 45 company-owned and 31 franchise restaurants...Nordstrom Rack opened last month at Braintree (MA) Marketplace in part of the building that had housed a K-Mart store. Also moving into the building is a Saks Off 5th Outlet store, which should be open in time for the holiday shopping season...L.L. Bean will establish its first urban location outside Maine in November. The retailer will open a 150 s/f  kiosk in the Shops at Prudential Center in Boston, selling Bean Boots as well as a selection of outerwear and accessories. The company has three Boston-area stores, in Burlington, Dedham and Mansfield... Sephora opened its 16th Boston area store this month, a 3,800 s/f store will open at the Van Ness, a mixed-use development on Boylston St. The Van Ness includes a 232,000 s/f office and 174-unit residential tower atop a 165,000 s/f retail base anchored by Target...Rita’s Italian Ice and frozen custard opened its first MA location in Chelsea this month. The company has over 600 US locations around the country. Roxbury native Patricia Shelton plans up to 30 Boston area locations...Wegmans signed a lease for a 120,000 s/f store in Medford’s Meadow Glen Mall, to open in fall 2017. There are Wegmans locations in Burlington, Chestnut Hill, Northborough and Westwood, and plans for stores at the Natick Mall and Boston’s Landmark Center... Ohio-based REIT Phillips Edison grew its Bay State footprint with a purchase of the 732,000 s/f Hanover (MA) Mall from CWCapital. The regional mall opened in 1971 and was modernized in 2004. Tenants include Sears, Macy’s, Walmart’s, Office Max, Petco, Sleepy’s and Trader Joe’s. A 59,000 s/f stand-alone Dick’s Sporting Goods store opened in 2012 and Buffalo Wild Wings opened in an outparcel earlier this year.


Notes: figures gathered from individual company websites, press releases, and Federal filings.  Not all companies report all figures; results not reported will be marked “n/r”. Quarterly results will be updated when available; quarterly figures are shown in italics. Figures from companies not calculated to one decimal point automatically received an ending digit of 0. 


Sales at retail stores, online retailers, and restaurants rose a seasonally adjusted 0.6% in September from the prior month, the Commerce Department reported. Spending excluding gas and autos rose a more modest 0.3%, though that was still the best gain in three months.

Source: U.S. Department of Commerce -


Treasury Yield Sources:;


The Conference Board Consumer Confidence Index®, which had increased in August, improved further in September. The Index now stands at 104.1 (1985=100), up from 101.8 in August. The Present Situation Index rose from 125.3 to 128.5, while the Expectations Index improved from 86.1 last month to 87.8.

Source: The Conference Board -


Manufacturing expanded in September as the PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent, indicating growth in manufacturing following one month of contraction. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

Source: Institute for Supply Management - Manufacturing Report on Business -