Grocers, Discounters And Electric Car Dealers: The Retailers Opening Stores In 2021
Roughly 10,000 U.S. stores will close this year. Only a fraction of that figure will open in 2021, and expansion is focused on the lower-cost end.
Between 3,500 and 4,000 new stores will open in 2021, according to Coresight Research estimates, up from 3,304 store openings in 2020. That marks a sizable net closure for retail this year, but the openings will reflect the ongoing bifurcation of retail. While some upmarket brands will be among those expanding in 2021, a much larger number of discount stores are poised to enter the market.
At the less-expensive end of the spectrum, discount grocers are set for growth this year. Aldi is planning to add 100 stores in 2021 to its existing total of more than 2,000 units, focusing on Arizona, Florida, California and the northeastern U.S., Chain Store Age reports. The company is also planning a regional headquarters and 564K SF distribution center in Loxley, Alabama, which is near Mobile.
Dollar stores, which function as borderline grocers in some markets, are likewise ratcheting up their growth this year. Dollar General, when it announced its Q3 2020 earnings in December, said that it plans to open 1,050 stores this year, on top of its 17,000 existing stores. It will also remodel 1,750 of its stores.
"We plan to further accelerate our pace of new store openings and remodels in 2021," Dollar General CEO Todd Vasos said during the company's most recent earnings call in December. "Importantly, our data suggests an increase in new customers this quarter. ... These new customers skew younger, higher income and more ethnically diverse, further underscoring the broadening appeal of our value and convenience proposition."
Fast-food operators were buoyed during the pandemic by their ability to scale up their drive-thru and other takeout options, unlike standard sit-down places, which were hit much harder. This year, that flexibility will translate into an acceleration of openings.
McDonald's, which is the No. 1 restaurant chain in the country in terms of sales, said during its Q4 earnings call that it would open 500 new U.S. restaurants this year, which is part of a larger initiative to open more than 1,300 new units worldwide, including 500 in China. McDonald's is also in the process of creating more dual-lane drive-thrus to allow two customers to order at the same time. In some cases, the company is adding a third drive-thru line.
"We continue to build out our delivery advantage, much like we're extending our competitive advantage on drive-thru," McDonald's CEO Chris Kempczinski said during the earnings call.
"With over 25,000 drive-thrus around the world, we've made smart investments to bolster foundational elements like staffing, positioning and order assembly. We've reduced service times each of the past two years, even as a greater percentage of customers went through our drive-thrus during 2020."
At the upper end of the retail spectrum, not all retailers are doing that well. Brooks Brothers, Neiman Marcus and Lord & Taylor were all slammed by changing tastes and the pandemic recently, sometimes to the point of extinction. But there will be some notable expansions among carriage trade retailers this year. Two in particular almost literally involve carriages: electric vehicle dealerships.
Lucid Motors, which specializes in luxury EVs (its lowest-price model starts at $77K), has plans to open 20 retail locations, — which it calls Lucid studios, not showrooms — and service centers in North America by the end of 2021, up from six studios and two service centers.
Rival Rivian, an EV maker backed by Amazon, will open 10 new stores this year and is planning an initial public offering as soon as September, according to Bloomberg. Rivian recently raised $2.7B in a private equity round led by T. Rowe Price.