The retail landscape is witnessing a diverse range of strategies among brands with a brick-and-mortar presence. While some companies are aggressively opening new locations and exploring innovative concepts and formats, others are taking a more cautious approach by evaluating their real estate footprints or even making the difficult decision to close store locations.
Price-conscious retailers among fastest-growing
Discount retailers continue to thrive in today’s uncertain economic environment, as consumers tighten purse strings.
Dollar General remains committed to its growth strategy with 800 new stores on the horizon for 2024. Five Below continues to expand, too, with up to 600 new locations planned for its next fiscal year.
Established big-box brands like Target and Walmart are taking divergent paths when it comes to the future of their stores, however. Target, with just 30 new locations planned, is exploring a large format concept of more than 150,000 square feet beginning in 2024, while Walmart is focused on remodeling existing stores with the goal of enticing customers to stay and shop longer.
In the apparel sector, Ross Dress For Less and Burlington have long-term plans to open 500 or more stores each. Additionally, both are now close to obtaining a nationwide presence, as Ross just recently entered the Minnesota and New York markets.
A variety of retail brands supporting the automotive industry are also looking to expand. Aftermarket parts retailers AutoZone and O’Reilly have each announced robust growth plans in 2024 and beyond, with a combined 700 or more new locations planned.
Take 5 Oil Change, which now has a presence across 41 states, has 300 new units in the development pipeline. Gas station and convenience store brands Sheetz and Wawa have 300 and 800 stores, respectively, planned in the long-term, while 7-Eleven looks to operate a total of 20,000 locations in the U.S., resulting in future growth of several thousand stores.
ALDI leads the pack in grocery store expansion, with 45 new locations planned for 2024, while European rival Lidl continues to open stores along the east coast, although not at the originally expected pace announced several years ago.
Fast-food expansion goes global
Domestic growth among quick service restaurants continues at a fast pace, as U.S. consumers value their convenience and lower price points compared to casual-dining restaurants. But a number of fast-food chains have announced a substantial focus on international expansion in 2024. Some of the fastest growing brands both home and abroad include:
- McDonald’s – planning 10,000 new locations globally by 2027, with 900 of them in the U.S.
- Starbucks – 2024’s exact plans are unknown, but the fourth quarter of 2023 saw 208 U.S. locations open and more than 800 stores open worldwide
- Chipotle – up to 315 restaurants are planned for 2024
- Bojangles – more than 250 new restaurants are in the pipeline
- Krystal – will open 200 locations in the next three to four years
- Raising Cane’s – plans to open 100 restaurants in 2024
Mergers, acquisitions, and bankruptcies to watch in 2024
In the past few months, several brands have made major announcements that may impact their brick-and-mortar presence in the coming years.
In the drugstore sector, Rite Aid filed for bankruptcy in October and has already closed 200 stores since the filing. Also in the retail pharmacy sector, experts are watching Walgreens – not for bankruptcy or M&A activity necessarily, but in December, Moody’s downgraded the drugstore chain’s credit rating to Ba2, which could impact the pricing of net lease investments and influence the appetites of real estate investors.
ALDI is moving forward with its planned acquisition of Winn-Dixie’s parent company, which was announced in August. Plans call for some Winn-Dixie stores to be converted to the ALDI brand, and although no mention of store closures has been made yet, the company does intend to close all in-store pharmacies and transfer customers to CVS or Walgreens.
In May, Tempur Sealy announced plans to acquire Mattress Firm in a $4 billion deal that’s set to close in the second half of 2024. It’s unclear what impact, if any, the transaction will have on Mattress Firm’s retail footprint of more than 2,300 stores across the U.S., but it’s been several years since any meaningful growth has happened for the brand.
Read Northmarq’s Q4 2023 Top 100: Tenant Expansion Trends report for more information about these retailers and other top brands.
Lanie Beck is senior director of content and marketing research at Northmarq.
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