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Retail Going to the Dogs?

I have the pleasure of working with two Mars affiliated companies, Blue Pearl Animal Hospital and Banfied Pet Hospital. This article mentions yet another affiliated company, Camp Bow Wow and I thought it was of real interest. These businesses are helping to change the face of retail real estate.

Two Pet Daycare Franchises Battle for Market Dominance - Who Will be Top Dog?

JANUARY 16, 2019 | RICHARD LAWSON

Finding a location can sometimes be...ruff.                                      Photo credit: Dogtopia

Competition in the pet daycare and boarding business is turning into a real dog fight as the leading franchises race to drive expansion.

Dogtopia, based in Phoenix, announced plans to open 50 locations this year to build on the more than 90 it has in the U.S. and Canada. That’s double the number that opened last year. The company said it sold 100 spots last year and more than 30 units so far this month. In all, Dogtopia has more than 200 locations in development and has aggressive plans to grow to more than 400 stores.

“There really aren’t areas we aren’t looking, but a few current hot spots are Seattle, Connecticut, Atlanta, and our backyard, Phoenix,” said Jesse Stiles, Dogtopia’s vice president of real estate. “I have active franchisees looking in 30 plus states.”

Meanwhile, its biggest competitor and market leader, Camp Bow Wow based in Westminster, Colorado, has its own expansion plans for the year. It added 20 locations last year to finish with 165. “The pipeline is enough to achieve 20 this year,” said Jay, Mihulka, Camp Bow Wow’s vice president of real estate.

Each has firepower behind them. Dogtopia, founded in 2002, initially partnered with Phoenix investment firm Thomas Franchising Solutions in 2012 to fuel expansion. But Peter Thomas, who started the firm and once owned all of the Century 21 Real Estate franchises in Canada, later bought all of Dogtopia to put the franchise on a faster growth track.

Camp Bow Wow opened its first store in 2000 and was acquired in 2014 by VCA Inc., a company that has 750 animal hospitals around the U.S. and Canada. Mars Inc., home of M&Ms and Snickers as well as major pet food brands, bought VCA three years later.

Who has the competitive edge? Based on Entrepreneur magazine’s annual Franchise 500 for 2019, Camp  Bow Wow has slight lead, ranked No. 193 to Dogtopia’s No. 204. The ranking considers brand strength, costs, size, growth and support for franchisees and franchisor financials. But in 2017, Franchise Times chose Dogtopia for its Zor Awards, recognizing top franchises to own, over finalists that included Camp Bow Wow.

Both franchises offer similar services -- grooming, daycare, boarding and indoor and outdoor exercise. Both allow dog owners to view their furry children via webcams. But they differ on décor. Camp Bow Wow has more of a rustic look in its stores with lots of wood. Dogtopia leans toward contemporary and bright colors. Its locations, which average 4,000-6,000 square feet, tend be smaller than Camp Bow Wow. At a result, total investment to open a Dogtopia is lower, $606,545-$1,321,245 compared to Camp Bow Wow’s stated estimate of $783,500-$1,485,000.

On the real estate side, though, the playing field is basically level. Local zoning requirements have tended to preclude these franchises from locating in shopping centers or urban areas. They end up at the city edges, often in light industrial areas amid small manufacturing spaces or warehouse users.

That’s changing some. “With the changing retail landscape and the demand lessening for soft goods tenants, service-related businesses that take up larger spaces are more attractive to landlords than they’ve ever been,” he said. “We’ve shown that with our aesthetics, smell and sound attenuation, and clean branding, that we can not only compliment a high-end tenant mix, but even improve a second-generation retail center and be a feature tenant.”

Both concepts typically need “special-use” or “conditional-use” permits through local zoning organizations in order to open. Stiles said that’s “mainly because most zoning codes are slightly antiquated and give a blanket classification of any business like ours as a kennel.”

To help franchisees with their pitch to local governments, Dogtopia shows off a location in a shopping center anchored by a Sprouts Farmers Market in Oro Valley, Arizona, a suburb north of Tucson. Camp Bow Wow has opened in retail centers in Las Vegas and Plano, Texas. “Retail works for us if we can get into them,” Mihulka said. “It’s an education and sales process” generally to show landlords the steps taken to sound proof the space and keep impact to neighbors to a minimum.

Mihulka said one of the challenges has been finding available space anywhere because vacancy in buildings has dropped so much. “Inventory is extremely low,” he said. Some Camp Bow Wow franchisees have changed course by buying a parcel to build a freestanding location, which adds to construction costs and lengthens the time it takes to open a location. But for the franchisee, owning the real estate provides a long-term real estate investment along with the business.

The Winners in Retail, 2018

Walmart isn't the only retailer already winning...

By Lauren Thomas, CNBC

In any competition, there are winners and losers. And among retailers competing for customers, the winners of 2018 beat their rivals by providing faster delivery, better online and mobile shopping options, and the trendiest products.

Those who failed or were slow to adapt? Bon-Ton, Sears, Mattress Firm and David's Bridal were among the slew of retailers that filed for bankruptcy in 2018. Toys R Us also closed all of its stores after filing for bankruptcy near the end of 2017.

But that doesn't mean consumers weren't whipping out their wallets and filling their shopping carts ahead of the new year. Many headed in throngs to off-price retailers like T.J. Maxx and big-box chains like Walmart. Here's a better look at some of the winners in retail to round out 2018.

To read the article in full, click here...

These Retail Trends May Not Make It Through 2019

This author believes fast fashion and grocery delivery are the biggest retail trends that will come to an end next year.  I would love to get your opinion.  

GlobeStreet.com.  By Kelsi Maree Borland | December 07, 2018

The retail industry is rapidly evolving, and trends that were once mainstays have been dying out. This has manifested as major store closures in the last couple of years, and unfortunately, we aren’t out of the dark yet. In 2019, expect fast fashion brands like H&M and Forever 21 to start to show signs of trouble, according to Sean Slater of Retail Design Collaborative.

Fast fashion isn’t the only retail trend that Slater expects to end next year. Grocery delivery efforts, he says, are also on their way out—despite the recent surge in attention. “Curbside pick-up has been a start and stop process over the last few years. We have seen a ton of investment from Walmart, Kroger and Target into this idea, but I think that we are going to have another downturn in the importance of that,” he explains. “This year, there have been a huge capital investment into curbside pick-up, but I think that those investments will go on pause. It is going to be much more about the in-store satisfaction and much less about how fast you can pick up a bag of groceries.”

To read the rest of the article, click here...

Amazon Fresh Future in Doubt?

Some Amazon Fresh customers are slamming the grocery-delivery service over disappearing and ruined orders, and it raises questions about its future.

BusinessInsider.com, Dennis Green.

Some customers are saying that Amazon Fresh is growing rotten.

The online grocery-delivery service has undergone many changes in the past year, and it's racking up poor customer reviews as its future — and its place within the Amazon Prime ecosystem — is increasingly being questioned.

Business Insider spoke with more than a dozen Amazon Fresh customers who said they had experienced issues with the service in places like Los Angeles, New York, and Washington, DC. These customers complained of poor-quality and even spoiled produce, orders being packed incorrectly or illogically, canceled or late deliveries, and regularly missing items.

To read more of this article, click here...

Dramatic 10% Increase in Top Retailer Foot Traffic

Placer.ai (foot traffic analytics platform) just released its initial ‘Retail Index’ measuring foot traffic at over 24,000 major retail brands and shopping centers across the United States, comparing the Black Friday weekend in 2018 vs Black Friday weekend visits for 2017.

Key takeaways for the Black Friday weekend 2018 shopping period include:

• Overall foot traffic increased 10.1% year over year at the top 30 retailers, as compared to 2017. 

• The top 3 retailers in the Retail Index for the Thanksgiving weekend 2018 were Hobby Lobby, Ulta Beauty, and T.J. Maxx, each delivering a 26% increase in foot traffic. 

• As a category, mass merchants like Walmart and Target showed the largest lift in traffic, at 12% year over year increase compared to 2017.

To read more key takeaways, click here...

Mall Doctors: Filling Vacant Retail with Medical Office

POSTED ON OCTOBER 17, 2018  BY BETSY ROSSO

NAIOP COMMERCIAL REAL ESTATE DEVELOPMENT ASSOCIATION

As health care systems consolidate and consumers expect easier access to medical care, empty storefronts and abandoned shopping malls are increasingly transforming into health care hubs.

CVS now operates more than 1,100 MinuteClinics within its pharmacies as well as some Target stores, and recently bought the insurance company Aetna, further shifting its role from simply a drugstore to a health care provider. According to Eric Johnson, national director of Transwestern, who spoke at CRE.Converge 2018 in Washington, D.C., 20 percent growth in these “quick clinics” is expected over the next five years.

With the recent announcement of Sears filing for bankruptcy, significant square footage will be available to be retrofitted for medical use. Empty retail space can be and is often be used for “urgent care, freestanding emergency departments, wellness centers, primary care clinics, pediatric clinics, women’s clinics, dermatology, eye care, and plastic surgery,” Johnson explained. “Larger stores can house multispecialty clinics, or combine with pharmacy, imaging and ancillary services to provide more convenience to the consumer.” Some sites are even offering outpatient surgery rather than just diagnostic services or considering micro hospitals.

Some medical facilities have long been anchored in retail space, such as dialysis, post-acute rehabilitation and behavioral health services. These services typically serve uninsured patients.

One model of the transformation of retail to medical is Duke Health’s creation of an outpatient health center in a former 180,000-square-foot Macy’s in Durham, North Carolina’s 900,000-square-foot Northgate Mall. “The site had an excellent location and visibility,” explained Tony Ruggeri, co-managing director of ATR & Associates, Inc. What was once a department store now houses internal medicine, primary care, urgent care, women’s care, pediatric care, outpatient surgery, orthopedics and cardiac care.

In Houston, bookseller Barnes & Noble closed three stores, and the Kelsey-Seybold Clinic took the opportunity to consolidate 10 different physician groups that were scattered across the city, adding pharmacy and imaging, into one 20,000-square-foot block of retail space.

The primary case study of the session was the build-out of a new Vanderbilt Health campus in what was an unsightly mall in Nashville, Tennessee, that residents remembered fondly but now avoided visiting. “When we took on the 100 Oaks Mall project, everyone said, ‘What were they thinking?’ recalled Ruggeri. “It was an enormous site – the mall ran 2,000 linear feet, from JC Penney to what used to be a Woolco.” The 18,400 square feet included two levels of retail with some three-level areas and an adjacent five-story office tower, set on 56 acres.

“It was a great location,” Ruggeri explained, “visible to 135,000 cars daily on I-65. It’s right across the interstate from the highest-income part of Nashville. And it had ground-level retailers with strong sales. It was the second and third levels and the office space that was dying.” There was also a shortage of restaurants nearby and serious problems with the traffic patterns going in and out of the mall area.

When Vanderbilt University Medical Center expressed interest in using the former mall space as medical suites, the developer had to take an environment no one even wanted to shop in and make it a modern and attractive health care center. Where stores used to be there were clinics, with a central waiting area in the open area in the middle. The buildout took less than two years, whereas constructing a medical facility from scratch typically takes five to seven. Rebranding the site simply meant dropping “mall” from the name and calling it Vanderbilt Health’s 100 Oaks campus. Soon, patients and doctors alike were choosing 100 Oaks over the main campus because of convenience. Vanderbilt reached its projected 2013 patient count at the new site by December 2011. The retailers that remain on the property are thriving, as are the four restaurants that were built on the grounds.

While licensing, zoning and other specific requirements must be met to enable a medical facility to be built in what was formerly a retail space, the benefits and opportunities of expanding high-quality health care more broadly into communities seem to far outweigh the potential obstacles.