In 2024, several retailers have declared bankruptcy or gone out of business. Among them are Big Lots, LL Flooring (formerly known as Lumber Liquidators), Walgreens and Party City. These companies are currently in the process of closing down their locations. However, according to a report by Northmarq, this situation also presents opportunities for other retailers looking to expand.
In their recently released Q4 2024 report titled “The Top 100: Tenant Expansion Trends,” analysts at Northmarq explain that there will be more store openings and expansions than closures in the coming years. As such, they have compiled a list of the top 100 tenants expected to expand during this time period:
– Automotive and convenience stores: This category includes popular brands like 7-Eleven, O’Reilly Auto Parts and AutoZone.
– Discount and dollar stores: Target is among the big names on this list along with Dollar Tree/Family Dollar and Five Below.
– Grocery stores: Sprouts Farmers Market, Whole Foods Market,and Kroger are just some of the grocery chains forecasted for expansion.
– Retail banking institutions: Wells Fargo,PNC Bank,and Bankof Americaare all expectedto growtheir presenceinthe retail market.
– Restaurants:The fast-food industry is well-represented on this list with Wendy’s (QSR), Panera Bread (casual)and McDonald’s(QSR).
Lanie Beck from Northmarq explains that these tenants were chosen based on various factors including their rate of expansion,sales transactionsand brand recognition.
Convenience remains a key factor driving growth in quick-service restaurants like Jack in The Boxand Slim Chickensas well as convenience stores such as Wawaand Sheetz.Beck notes that consumers value convenience more than ever before which makes these typesof businesses highly sought after.
Discount retailerslike Five Belowand Ross Dress For Lessare also experiencing significant growth due to consumer’s continued focus on cost. Meanwhile, established retailers like Walmart and Lowe’s are also expanding their footprints.
Beck explains that Walmart is driven to expand due to competition from online giant Amazon. They believe having physical stores gives them a competitive edge as some customers still prefer the immediacy of in-store shopping.
Lowe’s, on the other hand,is targeting fast-growing markets and cateringto both professional contractorsand do-it-yourselfers.They are investing in their online capabilities while also opening new brick-and-mortar locationsin rural areas where they see potential for growth.
The closure of certain retailers may open up opportunities for others looking to expand. Developers can use this information from Northmarq about tenant expansion plans when making decisions about future projects or investments.Beck notes that this information is valuable for investors as well, helping them understand a brand’s risk profile or attract tenants who have proven success with expansion strategies.
Consumer preferences ultimately drive which retailers will succeed and which will fail.Beck points out how people often express excitement over new brands coming into their town through social media platforms like forums.This shows just how much interest there is among consumers when it comes to retail expansions.
