Loss Prevention Research Council Weekly Series - Episode 103 - Top 3 2022 Retail Tech and Good News on Store Openings
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
China’s economic data disappoint in April as COVID controls weigh
https://www.cnbc.com/2022/05/16/china-economy-covid-lockdowns-weigh-on-retail-industrial-production-data.html
From CNBC, let me start this week with a summary on the latest data on China’s economic performance.
For April 2022, China reported a drop in retail sales and industrial production — far worse than analysts had expected.
Retail sales fell by 11.1% in April from a year ago, more than the 6.1% decline predicted in a Reuters poll.
Industrial production dropped by 2.9% in April from a year ago, in contrast with expectations for a slight increase of 0.4%
This is alarming news as China is a major market for many global retailers that listen to this podcast. Pre-covid, the country was also leading innovation in the digital to physical retail space. We need to keep an eye on China as it is a vital contributor to future global growth.
Is last mile the most important mile?
https://www.ihlservices.com/product/most-important-mile/
Next let summarize, some interesting data from this past week presented in an IHL webinar.
In 2021, North America saw retail losses of $165 billion due to shrink and insufficient digital journeys.
All those new store services that we added during the pandemic are detracting from margin versus traditional store visits. The top three highest average margin point loss includes Buy online Return to store which has an average margin point loss of 8.1%, Buy Online Pickup in Store, shipped to store for pickup has a net point loss of 6.8% and Buy in Store ship from warehouse had a net point loss of 6.3%.
The top 3 technology priorities for all retailers for 2022 are No.1 Inventory Visibility (47%), No.2 refresh POS infrastructure (46%), and personalize customer experience (44%).
For retailers that grew more than 10% in the previous year and are considered industry leaders, the top technology priorities are support contactless payments, inventory visibility, and optimizing profitability for the digital journeys we just spoke about a few minutes ago.
USA retailers announced nearly seven times as many store openings as closings in the first quarter of 2022
https://nrf.com/blog/us-retailers-announced-nearly-seven-times-many-store-openings-closings-first-quarter-2022
Finally, let me finish this week with some good news from NRF on the first quarter of 2022 for the USA retail industry.
In the first three months of 2022, major U.S.-headquartered retailers announced plans to open about 4,400 stores, similar to the first three months of last year, and to close about 635 stores, down from about 2,100 closing announcements in the first calendar quarter of 2021.
As has been the case for some time now, opening announcements are concentrated in the discount/dollar and off-price sectors, which have various qualities/elements that make them less vulnerable to online competition and less translatable to ecommerce in general than many other retailers.
Five Below, which has expanded its price points above $5 with its Five Beyond initiative, recently announced plans to triple the store count to more than 3,500 by the end of fiscal 2030. The company said it will open 925-1,000 stores over the next four years on a base of more than 1,200 stores.
Family Dollar is planning to open 400 new stores this year on a base of 8,000-plus stores, while Dollar Tree is planning to open 190 stores on a base of 8,000-plus stores.
Dollar General is also growing aggressively with plans to open 1,110 new stores in 2022.
Turning to off-price retail, industry leader TJX announced plans to open 150 new stores this year across its concepts on a base of nearly 4,700 total stores. Burlington plans to open 90 net new stores on a base of about 840 stores, and Ross Stores recently said it will open 75 new Ross Dress for Less Stores and 25 dd’s DISCOUNTS this year on a base of more than 1,900 total stores.
On a combined basis and including a few others not mentioned above, discount/dollar and off-price retailers have announced plans to open about 2,240 stores, or roughly half of all announced new stores for the 2022 year-to-date period through March.
O’Reilly Automotive said earlier this year it will open 175-185 net new stores, which implies just over 3 percent growth on a base of more than 5,700 stores. Advance Auto Parts announced plans to open 125-150 new stores on a base of about 5,000 total stores.
AutoZone is also growing its store base but has an August fiscal year and hasn’t announced any new store openings yet in calendar 2022.
The research also confirmed the push from what was previously just digital online stores to now opening physical stores. Warby Parker announced plans to open 40 new stores this year on a base of about 160, which implies 25 percent growth.
Other digital natives opening stores include Gap’s Athleta brand, which plans to open 30-40 new stores on a base of 227, Fabletics, which expects to open 30 new stores on a base of more than 70 stores, and Allbirds, which is planning 16-17 new stores on a base of 35 globally.
On the opposite side, Foot Locker is the leader among the retailers announcing closings, with plans to close 190 of its 2,800-plus stores. Foot Locker is also planning to open 100 new stores this year, however, so the net planned reduction is 90 stores.
Other retailers closing stores including Amazon, which is shutting all its bricks-and-mortar bookstores and 4-star stores, Gap and Banana Republic North America, which plan to close 50-60 stores combined out of more than 960, and Genesco, which is planning to close 46 of its 1,425 stores.
Next on the list are Chico’s, which said it will close about 40 of its 1,200-plus stores, and Children’s Place, which also plans to close about 40 stores and has more than 670 total stores.
LPRC is Speaking at LPF/LPM Annual Meeting! Protests Continue! In this week’s episode, our co-hosts discuss the declining China economic and retail performance for April, LPRC speaks in front of major companies CEO’s, the top 3 technologies that are getting forcus in retail in 2022, big techs role in censoring violence in social media, and the good news on all the store openings in physical retail in the first quarter of 2022.
