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4 Paws Up for Dunkin’ Donuts!

It’s 4 Paws Up for Dunkin’ Donuts!

Dunkin’ Donuts has been on fire lately stepping up to the challenge and firing on all cylinders. They’ve taken their, “BLUEPRINT FOR GROWTH” 2018-2020 initiative to heart  and been mega-strengthening their in-store menu as well as their to-go offerings while staying fresh with topical items. But the fresh, fun, and familiar brand isn’t stopping there. In the past year alone, Dunkin’ Donuts:

 

  • Opened their next gen store that includes a beverage bar tap system with Nitro Coffee and new Double Drive-Thru with the first On-the-Go Lane; kiosk ordering and uniforms designed by Life Is Good

  • Announced they plan to eliminate foam cups by 2020

The chain has also announced it plans on 1,000 net new restaurants by the end of 2020, with 90% built outside the Northeast.

These changes are producing results. Second quarter highlights include:

  • Dunkin’ Donuts U.S. comparable store sales increase of 1.4%
  • 64 net new Dunkin’ Donuts in the U.S.
  • Revenues increased 4.9%

Dunkin’ Donuts has done a great job of playing to win. We think they deserve the Wolfe Pack’s Retail Ratings’ Four Paws Up!  Do you agree? Let us know here LINK to LINKEDIN Post

See our available Dukin’ Donuts property for sale here: http://wolferetailgroup.com/properties/dunkin-donuts-7/

#CRE #RETAIL #Dunkin #Donuts #QSR #Restaurants #Coffee #RealEstate #NNN #STNL #RetailRealEstate #Retailing #RealEstate #Dining #DunkinDonuts

 

Images Courtesy of Dunkin’ Donuts

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Macy’s Gets 2.5 Paws Up!

Macy’s Gets 2.5 Paws Up!

While Macy’s has gotten a bad rap in the last couple of years, we think they’re on their way to making a comeback. Ignoring the recent data breach, Macy’s has been making an effort to reposition itself and play on at least some of its assets.

For example:

  • They’ve recently started to work more closely with influencers, well-known ones with established followings and even more interesting, using its store employees and stylists as Instagram influencers to drive salesRead more here.
  • They’re extending their store-within-a-store concept to include pop-up marketplaces which are meant to drive traffic back repeatedly to view what’s next, similar to Story which they recently acquired
  • Although they’re still trying to figure this out, Macy’s also jumped into the popular off-price segment by opening Backstage

While they’re stumbling in some of these initiatives, we give them credit for making a go of it and for being willing to fight to stay in the game. They’re choosing interesting trends, tapping into their biggest assets–such as beauty, an audience, and real estate–and seem to have stopped looking back to look toward a brighter future for the brand.

We look forward to your comments on LinkedIn here.

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Walmart Vs. Amazon – The Battle of The Retail Giants

Walmart Vs. Amazon – The Battle of The Retail Giants

What’s their next move?

Post by Barry Wolfe

Did you see this one coming?

Sam’s Club is building a small-format concept that will be “centered on convenience and a digital experience” stocking only 1,000 to 2,000 skus. (Read story here: http://www.supermarketnews.com/retail-financial/sam-s-club-develops-small-format-concept)

On the same day, it was revealed that the company opened the first of its new e-commerce fulfillment centers in Memphis, TN.

Interestingly, both announcements were made by Jamie Iannone, CEO of SamsClub.com and EVP of membership and technology.

I see this as a sign of things to come as e-commerce, fulfillment centers and brick-and-mortar locations merge in an omnichanneling landscape. In so many ways, Walmart is ahead of the game on this one. They have 660 Sam’s Clubs ands 4,672 Walmarts in the U.S. for a total of 5,332 sites. Amazon has 75 fulfillment centers and 412 Whole Foods.

This tells me that Walmart is in an excellent position to achieve penetration across a broader spectrum of markets, those that are e-commerce-friendly to slow adapters, from the coasts to rural areas. And, it also tells me that Amazon isn’t likely to sit by on such an unbalanced equation. They are likely to make a move that will allow them deeper market penetration, faster deployment, and access at a localized level. What will give them that advantage?

My inclination is toward drugstores. They’ve tackled food through Whole Foods, whose consumers mirrored their own customer profile and gave them grocery market entry via a physical location in a demographically-aligned trade area.

Next, would be medicine/drugstores/beauty. I’ve said this before as it gives them entry into a growing market segment (beauty) while gaining a foothold in a recession-resistant category (medical/drugstores). I’m not the only one thinking this is their next move. CVS is rolling out delivery for prescriptions and some over-the-counter medicines as it is said to be bracing for Amazon’s possible disruption. (Read more here: https://www.cnbc.com/2018/06/19/cvs-starts-drug-delivery-as-it-braces-for-expected-amazon-disruption.htmlThe drugstore’s merger with Aetna makes it an even more interesting player as Amazon has been making various supply-side moves.

Interestingly, Walmart just recently filed for several patents including a patents system for accessing medical records stored on a #blockchain, and just last month, Walmart was awarded two patents; one for a digital marketplace system that customers may use to resell items and the other geared towards facilitating customer deliveries to restricted areas using autonomous ground vehicles. Read full story here: https://www.ccn.com/walmart-patents-system-for-accessing-medical-records-stored-on-a-blockchain/

What will be Walmart’s next move? What will be Amazon’s next play?

Let me know your thoughts here: https://www.linkedin.com/feed/update/urn:li:activity:6415976467259224064

 

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Panera Bread Four Paws Up

We’re giving Panera Bread Four Paws Up for their commitment to continuous innovation and evolution while staying true to who they are as a brand.

 

 

As an example of their willingness to innovate, Panera recently grew their omni-channeling capabilities by expanding its delivery program to ~13,000 drivers and employees, up from 10k in 2017, making delivery available from 1,300 locations, in 897 cities, in 43 states using their app or website. 

Delivery is driving their digital sales which currently account for 30% of total sales, including kiosk orders. Unlike other chains that have turned to 3rd party delivery partners, which can take a significant cut (up to 30%!), Panera has developed their own fleet to control the process and profit end-to-end. (Think, pizza delivery but for bakery-cafe set.)

In addition, they’ve extended their technology to include mobile ordering and Rapid PickUp®, have a commitment to 100% clean food, and have one of the largest loyalty programs in the industry with over 25 million members (APR ’17).

As a result, Panera has been one of the most successful restaurant companies in history. Before the JAB acquisition in July 2017, Panera was the best-performing restaurant stock of the past 20 years, delivering a total shareholder return up 86-fold from July 18, 1997, to July 18, 2017, compared to a less than twofold increase for the S&P 500 during the same period.

Panera’s vision isn’t solely focused on technology and delivery.

In late 2017, Panera further enhanced its brick-and-mortar commitment by acquiring Au Bon Pain Holding Co. Inc., parent company of the 304-unit Au Bon Pain bakery-café chain. The acquisition reunites Panera and Au Bon Pain, and enhances Panera’s positioning and growth opportunities in new real estate channels, including hospitals, universities and transportation centers.

Excluding the Au Bon Pain acquisition, Panera grew its brick-and-mortar footprint through franchise and company-owned location growth with:

2017 Franchise-Owned*:

  • Outlets at the Start of the Year:  1,099
  • Outlets at the End of the Year:  1,112
  • Net Change:  +13

2017 Company-Owned

  • Outlets at the Start of the Year:  901
  • Outlets at the End of the Year:  931
  • Net Change:  +30

(*Source: FranchiseChatter.com)

In their last public quarterly report in APR 2017 (the same month in which they entered into an agreement to be acquired by JAB), the company reported that company-owned comparable net bakery-cafe sales increased 5.3%, franchise-operated comparable net bakery-cafe sales increased 0.3%, and system-wide comparable net bakery-cafe sales increased 2.6% compared to the same period in fiscal 2016.

 

Be a part of the Panera success model. See our extraordinary selection of single-tenant Panera properties from across the country here: http://wolferetailgroup.com/available-properties-for-sale/

 

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Single-Tenant Net Leased Trends Report JAN-DEC 2017

In this January – December 2017 Single-Tenant Net Leased Report, we look at key performance metrics for leading brands in several of the retail industry’s top-performing categories, including average cap rates, S&P credit ratings, and more.

Segments include:

  • Beauty/Health/Drugstore
  • Dollar Stores
  • Auto Parts
  • Coffee/Bakery
  • Restaurants (QSR/Fast Casual)
  • Banks
  • Wireless
  • Others

Download the JAN-DEC 2017 Single-Tenant Net Leased Trends Report now.

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A Conversation on Restaurant Expansion

Barry Wolfe joined Jim White from Katz, Sapper & Miller for a discussion on restaurant expansion

Topics included:

  • How target customers impact site selection decisions
  • Considerations and potential benefits of sale leaseback transactions
  • Pros and cons of owning vs. leasing property
  • Negotiating lease agreement terms
  • Trends in the restaurant real estate market

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Amazon’s Next Brick-and-Mortar Move

We can all agree that Amazon has been a trigger in the evolution of the retail landscape. This infographic offers a quick look at Amazon’s acquisitions. We think Amazon’s purchase of brick-and-mortar Whole Foods will not be its only foray into physical stores. It was a strategic move that gives them an advantage into a segment which they can service online and offline to maximize their purchasing power and economies of scale in a category which everyone on the planet buys from: food. Plus, it strengthens its Amazon Fresh division and investment. We predict one of its upcoming brick-and-mortar moves will be into another must-have category: drug, health, & beauty. 

Graphic via The Visual Capitalist and Business Insider

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Single Tenant Net-Leased Trends Report | JAN-OCT 2017

The Wolfe Retail Group of Marcus & Millichap is proud to present our most recent Single-Tenant Net-Leased Trends Report, January-October 2017. This year, the retail landscape has experienced unprecedented change with major moves by online giants that included acquisitions, expansion, and offline territory encroachment. Meanwhile, moves by major offline players across the spectrum of categories have ranged from withering to aggressive action to take advantage of the opportunity presenting itself in the market. In this report, we look at cap rates for leading brands in several of the retail industry’s top-performing categories, as well as S&P credit ratings, estimated sales per square foot, and YOY average cap rates to identify possible trends.

Barry Wolfe, of the Wolfe Retail Group of Marcus & Millichap, provides a quick intro in this video.

Segments include:

  • Beauty/Health/Drugstore
  • Dollar Stores
  • Auto Parts
  • Coffee/Bakery
  • Restaurants (QSR/Fast Casual)
  • Banks
  • Wireless
  • Others

Download the Single-Tenant Net Leased Trends Report now.

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Net-Leased Retail Research (Fall 2017)

Marcus & Millichap recently released the Net-Leased Retail Research Fall 2017 Report which looks at the current net-lease landscape including key indicators such as employment, 1031-exchange activity, retail sales growth, and the 10-year Treasury. Following are key highlights I gathered from the report:

  • Job growth remains steady, with gains averaging 174,000 positions per month over the past year. This has resulted in the unemployment rate reaching the lowest level since 2001.
  • Net-leased development remains the predominant sector of overall retail construction. Of the approximately 60.4 million square feet of retail space delivered over the past year, more than 46 million square feet was composed of single tenant net-leased retail. Dollar stores, quick-service restaurants, and pharmacies are the single-tenant concepts that have experienced the most construction activity in 2017.
  • Driven by investor desire to shift their portfolios toward less management-intensive assets, 1031-exchange volumes make up a considerable portion of the net-lease marketplace. So far in 2017, exchange-related buyers encompass more than 40 percent of transaction volumes. As a result, the status of this tax provision moving forward will remain a major driver of deal flow and investment demand. Any potential changes to the tax code that significantly impact 1031 Exchanges would have a serious impact on this sector so it is certainly something to watch closely.
  • Overall, leverage on acquisition loans has continued to reflect disciplined underwriting, with LTVs typically ranging from 60 percent to 70 percent for most retail properties. Going forward, The Federal Reserve’s plans to normalize its balance sheet will place upward pressure on interest rates.

The Net Lease Report also includes a summary of credit rating, number of locations and range of cap rates related to sales by several different brands and sectors. Download the report below. As always, at the Wolfe Retail Group of Marcus & Millichap, we are available to discuss this information in depth, including any impact this may have on any of your projects. We remain optimistic that 2018 will be another strong year for our sector of the commercial real estate industry. Feel free to message me via LinkedIn.

 

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STARBUCKS SALES SNAPSHOT

By Barry Wolfe, Senior Managing Director Investments, The Wolfe Retail Group of Marcus & Millichap

Starbucks closed its online store last week to focus its attention on providing the best in-store experience possible for its customers as well as enhancing its digital app and experiences. Let’s look at the facts and how things break down with the coffee icon in this snapshot of its U.S. operations.

  • Starbucks’ revenue has continued to grow YOY with TTM sales at $22,399.20 (millions).
  • Same-store sales have have continued to growth, although the rate of growth has decelerated year-over-year for the last two years.
  • Transaction growth has remained on the positive side but declined to 1% last year from 3% in 2015.
  • Same-store transaction volume has continued to grow YOY as have average sales per square foot.

Starbucks Key Metrics Cheat Sheet

The Wolfe Perspective: I think Starbucks made the right move to focus on its retail locations and digital experiences. The coffee giant knows its strengths and understands that the future of retail is in the customer experience. They’re expanding their digital storytelling online through content development and partnerships with Amazon and Audible. At the same time, they’re funneling their online customers to the app and in-store pick-ups for a true omnichannel experience that centers around their iconic stores which have become meeting places and workspaces around the world.

  • See my video report from a Starbucks store here: https://youtu.be/a1OK2mczrpo
  • Message for Starbucks market comps or other information
  • Follow Wolfe Retail Group for more industry research and insights here: https://www.linkedin.com/company/18067219/

#Investing #Starbucks #CommercialRealEstate #CRE #Retail #Retailing #Coffee #Retailers #CREInvesting #PropertyDevelopers #CREDevelopers #CommercialRealEstateDevelopment #PropertyDevelopment