In the news
New Hyde Park, N.Y. — Kimco Realty Corp. is seeking a large national retailer in need of assistance finding replacement tenants for vacant stores with lease obligations. The REIT plans to launch a new fee-driven program, tentatively called Retailer Services, that will function as an agent to fill these empty slots. Kimco says it could also serve as a principal by purchasing some of the leases and collecting rent. The company brought in a new vice president, Ray Edwards, to head up the initiative, which will be organized under Kimco's taxable REIT subsidiary.
New York — Both U.S. consumer bankruptcies and credit card charge-offs will rise in the coming quarters due to increasing unemployment followed by high debt service costs, according to bond rating agency Standard & Poors'. “The economic slowdown is pushing highly leveraged consumers into default and bankruptcies,” says S&P chief economist David Wyss. The organization predicts a 20% jump in consumer bankruptcies in 2001.
Atlanta — Corporate employees of retail chains had better watch their backs. In the past few months, several big-name merchants cut jobs. Even stalwart Wal-Mart was not immune. The megachain laid off 100 employees at its Bentonville, Ark., headquarters — the first time such a cut has occurred there since 1995. In addition, Gap Inc. announced the first round of job cuts in its history. Approximately 600 positions were cut from the San Francisco-based retailer's 10,000 corporate positions worldwide.
New York — Pop artist Peter Max wants to become the next Martha Stewart. The 1960s icon, famed for his colorful, cartoony illustrations, is seeking $100 million in funding for his proposed 200-store chain of retail outlets. The flagship store, scheduled to debut in New York this year, will be the first in a wave of 12 to open. Max says he expects to open an additional 70 locations next year. The shops will include home furnishings and artwork based on Max's designs.
Atlanta — Increased safety precautions could save millions for retailers. In July, The Home Depot was ordered by a Louisiana jury to pay $1.45 million to a customer injured in 1998 when a 70-pound bag of sand fell on him from an overhead rack. Similarly, a federal appeals court judgment ordered Wal-Mart to shell out $1.1 million to a customer who slipped on loose cardboard in one of the chain's Sam's Club stores.
SIDEBAR: Gas pumps fuel community center traffic
Costco Wholesale started it all by installing gas pumps at its stores in 1997. Since then, grocery chains such as Publix, Kroger, Safeway and Albertsons have followed suit, finding on-site gas pumps a convenient way to promote one-stop shopping.
“For grocery stores, adding fuel pumps creates a synergy,” says Tom Engberg, senior vice president, investments in the Walnut Creek, Calif. office of Regency Centers. “Consumers can complete all of their errands in one visit.”
Regency Centers, along with many other community center developers, has leased outparcels to convenience stores for decades. Now that anchor-tenant grocers are getting into the game, these developers are all for allowing the pumps to be installed in their centers' parking lots.
“From an owner's standpoint, it makes no difference if the pumps are grocery store-owned or c-store-owned,” Engberg says. “Sometimes we'll sell a parcel outright to the grocery store. I've heard of other owners leasing the land and charging a percentage rent.”
Some pump stations feature c-stores, while others are accompanied by a small kiosk used for payments 24 hours a day.
It seems the trend is catching on with shoppers as well. Albertsons expects $500 million in annual revenues from its 130 Albertsons Express pumps and Kroger expects to operate 150 to 170 fuel centers at its non-c-store locations by year's end.
Lower costs might be just as motivating to shoppers as convenience. C-store owners worry that grocery chains, many of which have purchasing leverage due to the large amounts of diesel they use for delivery trucks, will use their pumps as loss leaders. On a given day, one fuel pump at a Sam's Club in suburban Atlanta proved 13 cents cheaper per gallon than those at neighboring convenience stores.
Amendment to the Top
Contractors Survey 2001 in the July issue:
Weis Builders Inc.
7645 Lyndale Ave. S.
Minneapolis, MN 55423
p: (612) 243-5000 f: (612) 243-5010
Jay Weis, Pres.; Erik Weis, Exec. VP; Brett Christofferson, VP Bus. Dev.; Kristin Powell, Mktg. Dir.; 1. shell space built in 5 years 8,155,954 sq. ft. (Rank #19); 2. shell space built in 1 year 2,227,955; 3. Interior space in 5 years 10,290,637 (Rank #12); 4. interior space in 1 year 2,962,705; 5. space under construction 3,311,257 (Ranked #5); 6. percent retail 42%