If the great American pastime is shopping, then the great American Retail response is arguably opening new stores.
This, as a new blog post from the National Retail Federation noted that “for all of 2022, major U.S.-headquartered retailers announced plans to open about 7,860 stores.” While that pace was down about 3% from a year ago, it is almost five times the number of store closure announcements made in 2022, which themselves were down 55% for the year.
To be sure, discounters and dollar stores made up a large chunk of those new store plans, as brands like Dollar General led the way with over 1,000 additional locations targeted — on top of the 18,000-plus it currently has.
But it’s not just the low-end that is benefiting from the current round of belt-tightening, as reports from retail’s front line suggest the strength is broad based, including the high end.
Simon Property Group CEO David Simon told investors and analysts last week that occupancy for malls and outlets at the end of Q4 was up to 94.9%, with renewal occupancy topping 98%.
When asked by an analyst whether the increase was brought about by occupancy gains or higher rents, Simon replied, “I think it’s all the above. It’s rent bumps, it’s occupancy gains. We still — and this is very important to underscore — we still have a lot of openings scheduled for the latter half of ’23 and the early part of ’24.”
In fact, the Indiana-based billionaire said SPG had signed 4,100 leases totaling more than 14 million square feet, adding that “over the past two years, we’ve now signed 8,000 leases for more than 29 million square feet — plus we have a significant number of leases in our pipeline” slated for late 2023 and 2024 openings.
To be sure, it’s not all up in the physical retail space, but Simon explained some of his tenants take more time to move into new space than others.
Those “high quality” retailers include Christian Louboutin, Hermès and Akris. He noted that for some of the high-end brands setting up new locations, “It’s not a three-month build. In many cases, it’s nine months to a year,” adding that “most of those will either open late ’23 or ’24.” That includes Simon’s renovations to the Phipps Plaza mall in Atlanta.
Pointing to continuing retailer sales momentum, Simon said, “We reached another record in the fourth quarter at $753 per square foot with the malls and outlets combined, an increase of 6% year-over-year.”
See also: Simon Property CEO Says Brick-and-Mortar Is Strong as eCommerce Is Flatlining
From the NRF’s purview, other brands making the list include Five Below, which is planning to “triple its store count to more than 3,500 by the end of fiscal 2030 and open 925-1,000 stores over the next four years on a base of more than 1,200 stores,” as well as Family Dollar’s plan to open 400 new stores in its fiscal 2022 on a base of 8,000-plus stores, and Dollar Tree’s 190 new locations on a base of 8,000-plus stores.
Add to that TJX’s plans to open 150 new stores in its fiscal 2022 on a base of nearly 4,700 total stores, and Burlington’s plans to open more than 115 net new stores on a base of about 840 stores. Additionally, Ross Stores opened of 40 new stores in Q2, which took total openings for the year to 99 and the total store count to 2,019, comprised of 1,696 Ross stores and 323 dd’s DISCOUNTS locations.
NRF added that “many retailers opening stores are digital natives,” noting that Gap’s Athleta brand announced plans to open 60 net new stores, Warby Parker eyeing 40 new locations in 2022, Fabletics plans to open 30 new stores, and Allbirds expected 22 net new stores globally.
See also: Dollar Stores Step up Race to Add Locations Amid Consumer Shift
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