Retail Strategies Optimizing Retail Recruitmentkansaseda.com/Links/Documents/Retail Strategies...

[email protected](205) 314-0386

2200 Magnolia Ave, Suite 100Birmingham, AL

Optimizing Retail Recruitment

Retail Strategies



Who We Area

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Matt PetroChief Development [email protected](205) 427-7030

As Chief Development Officer, Matt Petro works with elected and city officials to make a positive impact on communities nationwide. His primary focus is understanding the needs of communities and providing solutions that help them achieve their goals.

mailto:[email protected]



Our Services

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Partnered with 200 communities nationwide



Our Services

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• Extension of City Hall

• Tools – Data, Analytics, Retail Recruitment Plan

• Team – Real Estate Expertise & Connections

• Man Power – Calls, Emails, Tradeshow Representation



Our Services

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• Revitalizing & Rejuvenating Downtowns

• The Next Step in Your Downtown’s Journey

• Assess the 5 Pillars of Main Street



Our Services

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• Empowering Communities

• Tools – Data, Analytics, Retail Recruitment Plan

• Education – Best Practices



• What’s Going on In Retail?

• Retail Expansion Process

• Retail Recruitment Best Practices

Agenda

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Retail = Revenue

Retail = Jobs

Retail = Quality of Life



Technology Trends

13 products advertised by Radio Shack in 1991

$3,055 in 1991

$6,000+ Today



Technology Trends

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VS

Convenience & Experience



E-Commerce

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Roughly 19% of Retail Sales are Online

High Online Purchases• Electronics & Appliance• Apparel• Home & Sporting Goods

Low Online Purchases• Food (Grocery & Restaurant)• Automotive• Home Improvement• Personal Care Source: IHL Group



convenience experience




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Retail Decline

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Retail Growth

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Closures and Openings

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Net Openings vs Closings Openings Closings Net Change

2017 Actuals 18,532 -14,404 4,128

2018 Actuals 21,213 -19,731 1,482

2019 Estimates 11,393 -8,428 2,965

Net Increase In Stores 51,138 -42,563 8,575

Source: IHL Group

• Includes 1,660+ retailers and restaurants that are public and private in our Sophia system

• Threshold for this study is 50 locations

• Sources include SEC and SEDAR filings, websites, presentations, press releases, phone

conversations w/corporate, industry compilations, etc.

• All of the news out there (from other research houses) is based only on large public retailers through

7/31/19

• Detailed list of retailers and opens and closings is available here.

https://www.ihlservices.com/product/2019-store-openings-closings-detailed-list/



Retail Growth

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Source: Lee Holman & Greg Buzek, IHL Group, “Debunking the Retail Apocalypse, August 2017

SegmentNet

Store Growth

Food/Supermarkets 383

Drug Stores 480

Superstores/WH Clubs 38

Department Stores -301

Specialty Hardgoods 1,668

Specialty Softgoods -3,728

Mass Merchandisers 659

Convenience Stores 855

Bar / Restaurants 2,911

+2,965

Net

Stores Opening

2017 - 2019 Openings Closings Net Change

All Other Segments 46,501 -28,275 +18,226

Softgoods and Dept. Stores 4,637 -14,288 -9,651

-------------------------------------- Mall Based Stores Are Struggling ----------------------------------



Retail Growth

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Every 5 Hours in America a New Dollar Store Opens.



Restaurant Consumer Trends

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• Selfie Age• Control Our Time• Looking for an Experience




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Restaurant Decline

TOP 20 BY NUMBER OF CLOSINGS

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Net Loss = -1,893 for 20 brands

New Units = + 3,225 for 20 Brands

Previously Shown Brands

Rank Chain Net Loss

1 Subway -836

2 Pizza Hut -167

3 McDonald's -119

4 Applebee's Neighborhood Grill & Bar -76

5 Church's Chicken -61

6 Joe's Crab Shack -60

7 Sam's Cafe (Walmart stores) -59

8 KFC -58

9 Papa Murphy's Take 'N' Bake Pizza -54

10 Dairy Queen -52

11 Noodles & Company -52

12 Tim Hortons -50

13 Bruegger's Bagels -41

14 Romano's Macaroni Grill -37

15 Long John Silver's -33

16 TGI Fridays -31

17 Pollo Tropical -31

18 Bob Evans Restaurants -28

19 Famous Dave's -27

20 Ruby Tuesday -21



Restaurant Decline

TOP 20 BY NUMBER OF CLOSINGS

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18




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Retail Growth

FAST CASUAL GROWING BRANDS

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Retail Growth

QUICK SERVICE RESTAURANT (QSR) GROWING BRANDS

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Convenience

PICK UP LANES + ORDER FOOD & DRINKS AHEAD

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convenience experience



5% of Consumers Make a Purchase After Browsing and Online Store

20% of Consumers Make a Purchase After Browsing a Physical Store



• Two Ways to Get Your Money Back

• Credit Card or Bank Account Balance Isn’t Reimbursed Until…..

• Credit Card or Bank Account Immediately Reimbursed and…

Returns?

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or



• You are in their store. Full of Deals!

Returns?



retail is not dying

it’s changing



RETAIL EXPANSION



Retail Timeline

HOW RETAILERS EXPAND

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Reta i le r Dr i ves the Dec i s ion

Sma l l percentage of proposed s i tes equa l new open ings

Long Process

It’s all about PROFIT!



Homerun Real Estate


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Convenience

High visibility / Strong signage

High Traffic counts

Excellent Access

Ample Parking



Site Selection Criteria


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Selecting Target Markets


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• Retailer Identified Areas of Expansion

• Corporate/Franchisee Driven Geographical Expansion

• Broker Suggested Markets



Selecting Target Markets


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• Where do they want to be in the market?

• Where is their target customer?

• How close is their nearest location?

• How does their comparable perform in the market?



Analyzing Target Markets


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• Growing, Stable, Shrinking

• Competition Within Market

• Sales Volumes

• Planned New Developments• Growth Segments of Market• Market Pricing Expectations



Locating Available Sites


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• Driving The Market

• Loopnet, Costar, etc

• Local Brokerage Firms

• Google Earth

• GIS Maps



Qualifying Sites


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• Availability• Purchase/Lease

• Exclusives/Restrictions

• Size • Can it be Sub-divided?

• Access• Ingress/Egress

• Signalized Entrances

• Traffic Counts

• Within Budget?

• Demographics

• Going Work/Going Home



Prepare Site Tour Package


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• Asking Price

• Demographics• Population

• Median Household Income

• Racial Makeup

• Zoning

• Traffic Counts

• Available Utilities

• Environmental• Gas Station/Cleaners?

• Survey

• Aerial Maps• Full Trade Area Aerial Map

• Zoomed in Site Aerial Map

• Major Retailers Labeled

• Competition Labeled

• Traffic Counts

• Traffic Lights



Sample Retail Area Map


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Letter of Intent (LOI)


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• What exactly is an LOI?• Rent • Co-tenancy• Exclusive• Early Termination Clause• Tenant Allowance or Free Rent• Work Letter

• Retailer’s Standard LOI/Lease Form

• Negotiate basic deal terms in the LOI



Real Estate Committee


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• Site Presented to Retailer REC for Formal Approval



Site Approval


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• The LOI is negotiated and executed by the Retailer and Property Owner

• Lease Negotiations Process can be lengthy…a few months to a few years

• During Lease Negotiations or once negotiated, the construction team will begin plan process and obtaining necessary approvals (due diligence)

Due Diligence

• Survey• Geotech• Engineer/Architect• City Codes• Permits



Lease Signed & Construction Begins


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• Retailer’s do not want to share the news until a lease is FULLY executed



Opening Day


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Do Your Homework

RECRUITMENT TOOLS

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• Know your retail trade area

• Know how to communicate the fabric of your community

• Know the best properties in your community and keep inventory

• Know who you are contacting and what they need



Know Your Trade Area

RECRUITMENT TOOLS

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Your Trade Area is Not Your City Limits!

Population: 15,025 Population: 50,000+



Know Your Trade Area

RECRUITMENT TOOLS

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Understand a Core Trade Area Versus a Secondary Trade Area

Milk & BreadSteakhouse



Be Business Friendly

RECRUITMENT TOOLS

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RECRUITMENT TOOLS

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Know the Sides of the Road

PM

AM



Conclusion

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• Retail isn’t dying, it’s evolving!

• Retail recruitment is a marathon, not a sprint!

• Be proactive!

• Take advantage of resources within your reach!



Thank You!

Matt PetroChief Development [email protected]

(205) 427-7030

mailto:[email protected]

Retail Strategies Optimizing Retail Recruitmentkansaseda.com/Links/Documents/Retail Strategies...

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