GPS Retail Newsletter

Second Quarter 2018

Santa Barbara

  • Bell’s, a French bistro, opens in Los Alamos.
  • Peet’s Coffee closes their downtown location.
  • Mollie’s restaurant, an Italian food eatery, is coming to Tupelo Junction site on State St. in the first week of June.
  • Core Power opens in La Cumbre Plaza.
  • Locavore to serve rustic California comfort food in downtown Santa Barbara.
  • After 38 years, the Chocolate Gallery in Goleta is closing.
  • Santa Barbara concierge services launched.
  • Choppa ice cream has opened in Goleta.
  • The Flightline Restaurant Bar and Grill, an aviation-themed eatery, is set to replace High Sierra Grill.
  • Staples and Aaron Bros are leaving downtown SB and Verizon closes there
  • Target to open in Santa Barbara and likely also Goleta

Ventura

  • Owner of Cisco’s Mexican Restuarant and Sports Bar plans to open a new Mexican seafood and prime beef restaurant, called Julio’s Agave Grill, in Westlake, TO.
  • Gargantua, a lunch service restaurant, in Ojai goes from pop up to permanent.
  • Stonefire Grill is opening up in Ventura, taking the place of Romano’s Macaroni Grill. It will feature local beer on tap as well as an array of vegan and gluten-free dishes.
  • Camarillo Cupcake opened with fun cupcake flavors and gluten-free options as well!
  • Afters Ice Cream opened in Oxnard, catering to a late night audience looking to indulge in fun desserts such as doughnuts stuffed with ice cream!

San Luis Obispo

  • As of May 1st, San Luis Obispo City Council allows counties first recreational marijuana stores. The 3 retail storefronts will be on Broad St., S. Higuera, and Tank Farm Rd.
  • New water purification facility in Pismo.
  • 88 hotel room, three-story with creekside dining and retail spaceapproved in Atascadero.
  • Nite Creamery opens in San Luis Obispo, using liquid nitrogen to freeze their ice cream.
  • Cider Bar opened in San Luis Obispo on Higuera! They are known for creating their own wild ciders that are fermented in-house. Instead of the basic apple flavors, they also use others fruits such as white peach, strawberries, and kiwi.
  • Aaron Bros is closing in downtown SLO
  • Paso Robles looking to add a new event center that will hold up to 1,000 people

Investment & Development News

  • In order to fill empty spaces, some major developments are beginning to line up not only restaurants, but elaborate arcades, such as Round One Entertainment (Japan-based), as well as grocery stores, gyms, and various types of service businesses.
  • By 2025, at least 20% of all retail space will be occupied by food-and-beverage concepts,
  • Investors’ desire to own stabilized assets with long-term tenantsand the ability of owners to unlock equity for reinvestment into operations keep retail sale-leaseback transactions steady.
  • Vacancy trends continue to fall and rents remain on an upward trend. Limited developments will support these current trends throughout 2018, reinforcing the demand of these generally stable assets.
  • Most companies are not coming into new developments with an aggressive strategy to roll out hundreds of stores, but are instead dipping a toe in the water to test things out.
  • Mixed use is comprising most retail development nationally.
  • Paso Robles, once again, is experiencing a boom in hotel development.
  • Retail owner/users are most prevalent in the 1,000-5,000sf range, occupying roughly 30% of properties traded in this tranche last year

Retail News

  • Retailer Nine West to close all stores, Gibson Guitars filed for bankruptcy.
  • Nordstrom set to open a full-line flagship in New York City, which is also its first freestanding men’s store.
  • Sears will be closing its last store in Chicago.
  • Retailer Express has begun using its Madison Avenue location to test new technology such as phone chargers, digital styling screens, and lounges. Most notably though, is the ability to choose items online, then go to the store where the items and a dressing room will be waiting for you.
  • Sears Auto Centers will offer full-service tire installation and balancing for customers who purchase any brand of tires on Amazon.com.
  • Burgerim Gourmet Burgers, from Tel Aviv, Israel, is looking to open 56 additional locations in California.
  • Planet Fitness opened its 1500th unit last December and has agreements for about 1,000 more which about half will open over the next three years.
  • Crunch Fitness says it will add about 500 more franchise units over the next few years.
  • Dave and Buster’s to add 14 units this year to its existing 110.
  • Round One, which has a mixture of bowling, karaoke, billiards, and video games, will open 10 new U.S. sites.
  • 7-Eleven will open at about 300 U.S. locations this year.
  • Indochino, an online seller of customized men’s clothing, will open 18 more showrooms this year.
  • Warby Parky, a former online-only eyewear retailer will have as many as 100 physical stores up and running by the end of the year.
  • H&M says it will open 390 stores in the U.S. and elsewhere while closing 170 stores.
  • Nordstrom Rack is opening 14 stores this year, five of them in Canada.
  • With increased demand, Ulta Beauty is planning to open about 100 new U.S. stores this year in order to reach out to smaller markets.
  • Lowe’s Home Improvement is planning 25 new warehouse stores for 2018.
  • Hobby Lobby will open about 60 stores this year, including several relocations.
  • Dick’s Sporting Good’s plans to open about 20 stores this year.
  • Dollar Tree says it will open about 600 stores.
  • Walmart openings have slowed as the retailer plans to only open 25 additional stores this year.
  • Aldi, a discount grocer, is planning to open 180 new units.
  • Grocery Outlet is opening 25 stores throughout several states.
  • Five Below, a so-called “dollar store for millennials” is opening 125 stores this year.
  • TJX Cos. is looking to open 15 HomeSense stores this year.
  • Ross rolled out with 25 of its own stores and 6 DD’s Discountstores.
  • Target has plans for 35 more store this year, mostly with small prototypes.
  • Vacant sites are being filled by tenants such as Flix Brewhouse, Phoenix Theatres, Studio Movie Grill, and other entertainment companies such as Altitude Trampoline Park, which is opening 44 locations this year.
  • Canada’s Showcase plans to launch its U.S. expansion this summer to sell products related to the latest trends in health, beauty, household items, and toys.
  • Miniso, a Chinese discount retailer, is planning for a huge expansion; they are aiming to increase store locations by about 3,400 by 2020.
  • American Apparel is to open its first store since being sold at auction last year. The brand’s new owner is Gildan Activewear, a Canadian brand.

Retail Trends

  • According to the “2018 International Loyalty Study,” by TCC Global, the number one factor driving store choice globally is proximity (54%), followed by “easy to get to” (48%), product selection (41%), good value offers (38%) and “I always shop there” (38%).
  • Retail will start to become embedded in vehicles. General Motors has created an online system called GM Marketplace which allows users to make reservations and purchases fro the vehicle dashboard.
  • Artificial Intelligence is going to start helping consumers make decisions on their next shopping trip.
  • Retailers are rethinking how workers are prepared for customer-facing roles. Macy’s has recently invested in hiring stylists to help shoppers pick their wardrobes.
  • Retailers are exercising “extreme caution“, owing to competitive pressures in the market-place. Retailers are weighing lower-cost options for flagship stores.
  • Sporting-goods, sportswear, and cosmetics retailers have shown particular interest in the U.S. Sporting-goods stores here generate some $49 billion in annual revenues, while beauty, cosmetics, and fragrance stores generate about $23 billion.
  • International brands are entering expensive markets such as New York City with pop-up stores.
  • According to industry leaders, Food Tenants make up around 20%-40% of shopping center tenants, which is up 10%-15% from a decade ago.