As the initial results came in for this year’s back-to-school retail spending forecasts, the numbers were about where I thought they might be: down a couple of percentage points. It’s a modest dip, and certainly nothing to be alarmed about given the degree to which back-to-school spending has spiked over the last decade (average back-to-school spending has increased 42 percent over the last 10 year period). So why is it that these numbers are raising some eyebrows among industry analysts and observers?
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Retail ‘Wrap’
If you’ve been reading this column over the last four years, let me first say, “thank you!” It’s gratifying to think that my musings about retail and retail real estate have kept your attention and interest. In this, my 100th and final (except for an occasional contribution) Retail Rap, I wanted to tackle the big […]
Retail Rap: All Good Things
All good things must come to end — including, after nearly four years, my contributions to this column. “Retail Rap” will soon be forging on without me. This is the first of two final columns I’ll be contributing, and I’ll beg your indulgence if I wax nostalgic at times in this, column number 99, and […]
Retail Rap: Half Foods?
When Whole Foods Market announced in May that it planned to open a new chain of stores offering a lower price point and specifically targeting millennials, it’s safe to say that the reaction from industry analysts and observers was underwhelming. Responses have ranged from confusion to outright skepticism, and there is a general sense of uncertainty surrounding the whole enterprise. My own reaction falls somewhere on the spectrum between “dubious” and “confused.” I have many questions, not least of which is why, if the new chain will continue to remain focused on offering healthy and all natural foods, Whole Foods would go to such lengths to create a brand that has the potential to cannibalize their own business. For this weeks Retail Rap, I’d like to talk about some of the questions that I have about this new concept.
While the announcement promises a “new” and “different” concept, I’m not clear about how “It will be unlike any of the other stores you’re seeing out there.” The stores will reportedly be “technology-oriented,” with a streamlined design and a “curated” product selection. All of which is fine, I suppose, although (again) it doesn’t tell us much in the way of specifics.
There has been lots of discussion about the wisdom of expressly targeting millennials, but the big question to me is why you would go all-in on such a strategy when it seems like Whole Foods is already getting a strong share of millennial business. It depends on which Whole Foods location you go to, of course, but in my experiences millennials seem to be a well-represented demographic.
I don’t know about you, but I’m extremely curious to hear more and to try and get a better sense of just how Whole Foods plans to make this new concept successful. After reading my thoughts in this week’s Retail Rap, I’d love to hear if you could see this type of brand flourishing in the current marketplace? Are there more pieces to the millennial puzzle that we’ve yet to put together?
Retail Rap: Seeing and Being Seen at ICSC
I just got back from the International Council of Shopping Centers’ (ICSC) 2015 RECon Convention in Las Vegas, and I came away feeling as good as I have about the state of the industry in some time (and it wasn’t just the weather, which was delightfully on the cool side). Judging by the buzz on the floor at the convention center, the action was definitely heating up. My sense from talking to colleagues and clients is that developers left the conference with a decidedly positive outlook. I heard from more than a few folks that they were having great meetings—meaning that the retailers were serious about getting deals done, and that more than the usual number of handshake deals were completed—so for this week’s Retail Rap, I wanted to discuss my thoughts on this years ICSC.
While it’s not the first time I’ve used these words, it was clearer than ever before that the hot topic of the conference this year was mixed use. Large numbers of major retail developers are considering either being part of a larger mixed-use development or have taken substantive steps toward adding additional uses such as office, residential, hotel or medical to their own projects. I’m not entirely certain why we seem to have reached a tipping point where mixed-use has moved from the category of “daunting” to “appealing”, but I suspect that there are many causes. Another oddity I noticed at this year’s conference was that while Monday’s traffic at the event was outstanding, Tuesday’s was surprisingly light. While activity always tends to wane somewhat as the conference goes on, the drop-off seemed significantly more noticeable to me than in past years. I was also encouraged to see the beginnings of an infusion of youth into the business—and some small but encouraging signs of racial and ethnic diversity. The difference is small, but noticeable in an industry that has been so comprehensively dominated by an older generation of mostly white men for such a long time. It’s a welcome step in the right direction.
Overall, I left ICSC knowing that this was one of the more positive and productive events in quite some time. After reading my thoughts on ICSC in this week’s Retail Rap, I’d love to hear the thoughts and impressions from my fellow attendees. Were you in Vegas this year? If so, did you have some takeaways?
New liquor store chain targets Central Texas
Gary Dinges/Bloomberg Business – “It’s like Toys R Us for adults.”
That’s how David Trone describes Total Wine & More, the liquor store chain he co-owns. Founded in 1991, the Maryland-based company now has more than 100 locations coast to coast — including several in the Dallas-Fort Worth area and in San Antonio.
After years of eyeing Central Texas, Total Wine & More debuted its first store this week in Sunset Valley at 5601 Brodie Lane. Work is already underway on a second location at 11066 Pecan Park Blvd. in Northwest Austin, and the chain expects to open at least three more stores here. The Arboretum area, in particular, is appealing, Trone said.
“Austin’s the hottest city in America,” Trone said. “It’s got great growth, great education and a great food and wine culture.”
The Austin area also has the state’s highest per-capita alcohol sales, a recent American-Statesman analysis found. In 2013, average alcohol sales were $523 per person in Travis County — almost twice as high as the runner-up, Dallas County.
Total Wine & More would have been here sooner, Trone said, but a lack of available real estate slowed the company down. New figures from Savills Studley, a commercial real estate firm, showed Austin-area retail space was 93.5 percent occupied at the end of the first quarter. Big-box retail spaces, in particular, are hard to come by — and with stores that measure around 30,000 square feet, including classrooms and tasting stations, that’s exactly what Trone and his team are searching for when they look to enter new markets.
In Austin, the Total Wine & More stores, which carry more than $2 million in inventory apiece — 8,000 wines, 3,000 spirits and 2,500 beers — are going up against two well-entrenched competitors. Locally based Twin Liquors has almost 80 locations statewide, with most of them in the Austin area, while Houston-based Spec’s has about a dozen Central Texas stores.
“There’s wonderful competition throughout Texas, but we feel like Total Wine brings something new,” Trone said. “We’re here to help you find the right bottle at the right price for the right occasion.”
David and Margaret Jabour, whose family has led Twin Liquors for generations, said it’s not surprising companies such as Total Wine & More would want to locate in Central Texas.
“Our family has watched Sixth Street develop from a dirt road into the Live Music Capital of the World,” they said in a written statement. “Central Texas is a vibrant and growing community, and we understand why new businesses find it appealing.”
In Texas, most liquor stores are local or regional, like Twin Liquors and Spec’s, making Total Wine & More a bit of an oddity, retail consultant Jeff Green said. Still, he said the chain has managed to make a name for itself in a relatively short span of time and is growing rapidly. This year, the company will add more than a dozen locations nationwide.
“They are, to me, the very best in terms of merchandising for wine, beer and liquor,” said Green, president and CEO of Jeff Green Partners. “They’ll do just fine in Austin.”
