Part 4 of an SCT series lending insight into the year ahead
To witness the popularity of discount retail, stop by just about any grand opening for T.J.Maxx. “There will be a line on the road and around the corner, there are so many people waiting to get into that store,” said Ryan Mitzel, director of national accounts for the East for Phillips Edison & Co., an internally managed REIT that owns and/or manages 309 grocery-anchored centers.
Phillips Edison & Co.’s Ryan Mitzel
In the year ahead, Mitzel and his colleagues will closely watch T.J.Maxx and other larger-format operators in the discount category, including HomeGoods, Marshalls (July opening at Shorewood Crossing in Illinois pictured above), Burlington and Ross Dress for Less. “We really like those box users,” he said. “People crave that treasure hunt concept where you never know what you’re going to get when you walk into the store. It generates repeat customers.”
The expansions of midsize discount operators like Five Below, Dollar Tree, Dollar General and Dollar General’s Popshelf concept, announced in October, also will be important for landlords seeking to backfill, Mitzel says. “Popshelf is looking for space around 9,000 square feet, and they see the value in backfilling a Pier 1 space or a former Rite Aid building on an outparcel,” he noted. “If the landlord gets that size space back, there are only a select few retailers they can call on nationally.”
Popshelf offers seasonal and home decor, health and beauty items, home cleaning supplies, party goods and more, most items priced at $5 or less
According to Dollar General, Popshelf’s target customer is a suburban woman in a household that has a total annual income of $50,000 to $125,000. While Popshelf is a potential competitor with Five Below on price, it focuses on a different part of the market. “Five Below is more geared toward kids,” Mitzel said. “We’re excited to see where Popshelf goes.”
Mitzel and his colleagues also have been talking with other fast-expanding chains, including AutoZone, Starbucks, Jersey Mike’s Subs, Wingstop, Chipotle, Tropical Smoothie Cafe and Scooter’s Coffee. Medical tenants and home improvement retailers like American Family Care, ATI Physical Therapy, Sherwin-Williams and Ace Hardware also will continue to be a major focus.
As vaccinations continue nationwide, owners and managers of grocery-anchored shopping centers likely will see increased demand for space among lower-priced fitness centers, as well, Mitzel predicts. Examples include Planet Fitness, Crunch Fitness and Anytime Fitness. “They see the value of offering membership at $20 a month rather than, say, $100 or more.”
Read more from SCT’s 2021 look ahead series
The restaurant sector is planning for a comeback
Plan for omnichannel; don’t wait for certainty on 2021 shopping behavior
Too soon to plan for the end of COVID, so what will a healthy center look like?
Faster and more collaborative style for retail real estate companies
E-commerce will face a reality check just like brick-and-mortar
By Joel Groover
Contributor, Commerce + Communities Today