ROLLING IN DOUGH
In spite of its sugar- and fat-filled glazed doughnuts, Krispy Kreme gets a good bill of health. Fiscal 2004 same-store sales rose 13.6 percent for company-owned stores and 10.2 percent system-wide, driven by an uptick in traffic and increased sales of doughnuts to grocery stores and big-box retailers. Krispy Kreme has a 30.6 percent share of the U.S. doughnut market. The 67-year-old chain includes 394 stores in the U.S., Australia, Canada, Mexico and U.K. and Legg Mason analysts estimates it could have as many as 800 U.S. stores before saturation. Some more sweet facts on Krispy Kreme:
$989.7 million in annual sales for 2004
10.2% Companywide same-store sales increase for fiscal 2004
North Carolina The state has one Krispy Kreme store for every 400,000 inhabitants
2000: Year Krispy Kreme went public
$4,000 per sq. ft. Annual sales at Krispy Kreme's Harrod's location in London
South Korea, Japan, China: International markets Krispy Kreme is considering for further expansion
7.5 million doughnuts produced each day
$6 billion U.S. doughnut store industry sales by 2007
60% of stores are franchises
LIFE IN THE FAST LANE
Forget “soccer moms,” “NASCAR dads” are the hot new demographic. Established in 1946, NASCAR — the National Association for Stock Car Auto Racing — boasts a fan base of 75 million, or one-third of the adult population of the U.S. According to Nielsen Media Research, the Daytona 500 — NASCAR's biggest event of the year — aired in more than 11.5 million U.S. homes, up almost 10 percent from 2003. And 60 percent of NASCAR fans are male. Thirty-five percent are in the $50,000 to $100,000 household income bracket and 32 percent are aged between 18 and 34. RED Development has taken notice. It's building a $130 million retail center called The Legends at Village West near the NASCAR speedway in Kansas City, Kan., for a spring 2005 opening.
NASCAR Fan Profile
Purchase characteristics typical of NASCAR fans. (Men age 35 to 49, with household income between $50,000 and $100,000.)
| Own a car | 96% |
| Have a desktop computer at home | 95% |
| Have a credit card in their name | 78% |
| Drank domestic beer in the past six months | 49% |
| Watch pro football on TV at least once a month | 46% |
| Own an electric cordless drill | 44% |
| Have a video game system at home | 44% |
| Own a fishing rod | 41% |
| Own a pickup truck | 40% |
| Own a recliner | 37% |
| Source: Mediamark Research Inc.; American Demographics | |
THE BIERI REPORT: MIAMI
Miami Mall Foot Traffic Counts
| SHOPPING CENTER | RANKING | NUMBER |
|---|---|---|
| Aventura Mall | A+ | 12,000,000 |
| Bal Harbour Shops | C+ | 2,000,000 |
| Bayside Marketplace | C | 4,900,000 |
| Broward Mall | B | 9,500,000 |
| Coco Walk | B | 6,000,000 |
| Dadeland Mall | A+ | 13,000,000 |
| Dolphin Mall | A | 11,000,000 |
| Miami International Mall | B | 10,000,000 |
| Sawgrass Mills | A | 12,000,000 |
| Shops at Sunset Place | C+ | 6,500,000 |
| Southland Mall (formerly Cutler Ridge) | C+ | 7,200,000 |
| Streets of Mayfair | C | 5,500,000 |
| The Falls | B- | 9,500,000 |
| Village of Merrick Park | C+ | 7,200,000 |
| Westland Mall | C | 12,000,000 |
Quantity may or may not mean quality when counting shoppers in Miami. Quantity definitely means quality in Aventura and Dadeland Malls. The most affluent shopper is found at Bal Harbour Shops, even though this center doesn't have high foot traffic. Dadeland Mall's numbers will only improve with the addition of Nordstrom. Sawgrass Mills and Dolphin Mall are high-energy locales, typical of centers with an off-price/entertainment bent.
PAY SCALE
WHO SPENT HOW MUCH ON WHAT?
$4.5 billionCVS and Jean Coutu buy Eckerd from J.C. Penney
$2.5 billion
Albertsons buys Shaw's, Star Market chains
$2.3 billion
DDR buys 18.8 million sq. ft. from Benderson
$890 million
Leonard Green & Partners buys Hollywood Video chain
$766 million
General Growth buys Las Vegas' Grand Canal Shoppes
$201 million
CIM Group buys Hollywood & Highland complex from Trizec
$197 million
Office Depot buys 124 former Kids R Us stores
$160 million
Foot Locker buys 350 Footaction stores
$102.5 million
CBL buys Chesapeake, Va.'s Greenbrier Mall
$97 million
Federal Realty buys San Jose, Calif.'s Westgate Mall
LIFESTYLE GROWTH STAGNATES
The retail store base is expected to grow by 3 percent this year, up from a 2.4 percent growth rate in 2003, according to an analysis of 230 retailers. The open-air sector (including neighborhood, community and power centers) is expected to see continued solid demand, with an estimated 4.8 percent increase in stores. Malls and lifestyle centers won't be as lucky. Tenants that traditionally occupy these more upscale centers aren't expected to add stores in 2004.
Store Growth By Retail Category
| Category | 2001% | 2002% | 2003% | 2004E% |
|---|---|---|---|---|
| Apparel | 8.60 | 4.20 | 0.70 | 4.00 |
| Books | -3.10 | 0.40 | -1.90 | 0.20 |
| Department Stores | -1.10 | 1.20 | 1.40 | 0.30 |
| Discounters | 7.50 | 6.60 | 5.00 | 7.80 |
| Drugstores | 1.50 | 1.30 | 3.40 | 1.70 |
| Entertainment Software | -0.60 | 1.00 | 4.00 | 2.50 |
| Footwear | -0.90 | -0.70 | -1.10 | -0.90 |
| Grocery | 2.90 | -2.40 | 0.50 | -0.40 |
| Home Electronics | 3.00 | -0.10 | -1.20 | 0.40 |
| Home Furnishings | 17.70 | 11.40 | 12.20 | 9.60 |
| Home Improvement | 16.40 | 14.60 | 7.40 | 7.50 |
| Jewelry | 0.80 | 1.00 | -1.00 | -0.10 |
| Off-Price | 7.50 | 5.30 | 5.20 | 3.90 |
| Toys | 0.80 | -2.80 | -11.70 | -24.20 |
| Warehouse Clubs | 8.20 | 6.0 | 3.80 | 5.10 |
| Other | 3.70 | 3.70 | 2.70 | 2.70 |
| Total | 4.40 | 2.90 | 2.40 | 3.00 |
| Mall/ Lifestyle | 3.80 | 1.80 | -0.10 | 0.00 |
| Open-Air (excluding lifestyle retailers) | 4.90 | 3.70 | 4.00 | 4.80 |
| Source: Independent Retail Research; Smith Barney |