ATLANTA — At the ICSC 2011 Southeast Conference, four retailers discussed their 2012 growth plans and challenges in a panel titled “Growing Pains: A Retailers’ Discussion.” David Kitchens, partner at Atlanta-based Kitchens Kelly Gaines P.C., moderated the discussion between Marianne Creamer McCabe, real estate manager at Chick-Fil-A; Jeff Gray, vice president of real estate at Hibbett Sporting Goods; Carl Jenkins, regional real estate manager at Advance Auto Parts; and Warner Walker, store development manager at Starbucks Coffee Co.
All of the panelists said their companies have plans to grow nationwide and more specifically, in the Southeast, during 2012. In the Southeast, Starbucks plans to open 10 stores next year and Chick-Fil-A will add 12 to 15 stores. Hibbett Sporting Goods and Advance Auto Parts both intend to grow their presence in the Southeast as well, although no specific numbers were provided.
One of the most extensive topics of discussion was new growth challenges companies are facing. McCabe said that although Chick-Fil-A has kept a consistent growth strategy, it has started to look at more in-town locations as possibilities for growth. The stores are typically about 5,000 square feet and the company prefers for the restaurants to have a drive-through, which has made it more difficult for them to find new sites.
Jenkins said Advance Auto Parts has become more strategic as a result of today’s economy. The company has started to spend more time in the trade area it’s considering developing in. Advance Auto Parts likes to be the first store of its kind in an area because it allows the company an opportunity to develop a relationship with their customers. Jenkins added that the company prefers build-to-suit locations.
Hibbett Sporting Goods’ biggest challenge has been finding space to continue to open, said Gray. In 2011, the company started building freestanding stores because it could not find enough retail spaces to enter. Gray said although the average store is 5,000 square feet, the size is very flexible and can be anywhere from 3,600 square feet to 15,000 square feet.
Walker said Starbucks is in a similar situation to Chick-Fil-A because it likes to have a drive-through as well. However, the company has become increasingly flexible and creative in the kind of space it will take. Starbucks has opened in houses, former churches and bookstores, said Walker.. The average store is 1,750 square feet, but can reach up to 2,000 square feet.
Another topic the panel touched on was important deal points when looking at a new location. Gray said Hibbett Sporting Goods spends a large amount of time on negotiations and clauses with landlords and that deals take longer today to get done.
Both Gray and Jenkins agreed that their companies have to get certain things from a deal or they will walk way from it. One of the deal points that was a must was early termination rights, either sales-based or discretionary. As a whole, the panel agreed that retail tenants today have to be diligent about real estate selection and not too reliant on anchor tenants at a property.
— Savannah Duncan