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Store Doors Open and Shut

August 14, 2012 by Newsfeed Editor  
Filed under Top Shelf

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There is some very compelling evidence of an increased state of change for those companies who help retailers open new stores or remodel existing stores. A story on Retail Traffic says that store closings for the first half of 2012 are well ahead of last year, but that might be balanced by an increase in new store openings for the same period.

The story cites International Council of Shopping Centers (ICSC) data which has store closings in the first half of the year at 34 percent higher than in 2011 for a total of 2,329. In the second quarter alone, closings amounted to double that experienced in 2011 with 1,150 stores closing or 10.3 million square feet of retail space. The Apparel sector was hardest hit in the second quarter making up 70 percent of that or a total 803 stores.

Industry analysts are attributing this movement to healthy right sizing and are saying that the purging might continue into next year. Many of the closings are retailers shutting down brand extensions and banners that simply did not work out. Helping to offset this rash of store closings is a number of new store openings. ICSC says that there were 440 new store openings in the second quarter.

When a door shuts for one, it opens for another. The members of NARMS, and especially the members of the Professional Installation Company (PIC) division, are helping retailers get stores open in a consistent, efficient, fast and safe manner. Whether it is new construction or moving into an existing retail space, retailers are finding that it makes sense to partner with a third-party provider of build-out services when it comes to the ceiling down, floors up and walls in.

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White Paper Reports Sharp Increases in Cap Ex

May 29, 2012 by Newsfeed Editor  
Filed under Top Shelf

remodel

Capital Expenditures among retail companies are of major interest to the members of the at-retail merchandising and marketing service industry. It is from this pot of money that retailers reinvest in their business in the form of technology, opening new stores and remodeling existing stores. Many members of NARMS, especially those in the Professional Installation Companies (PIC) Division, play an integral role in helping chains get new stores opened and old stores looking new.

According to a new white paper by Colliers International, as reported on by Chain Store Age, retail companies are making sharp increases in capital expenditure budgets for 2012. Retailers are using a good share of these funds to upgrade stores and open new stores. The report also sees a rise in experimenting with smaller prototypes. That is an extension of a trend seen in the last 18 months and could result in tremendous business opportunities for companies who go into a location and build-out stores from the floor up, walls in and ceiling down.

Obviously that is good news, but it is where the tech investments are going that might be even better. The report says that the technological investments are being made toward systems that better integrate all sales channels. They are looking for a multi-channel experience that becomes highly personalized in-store. This shopper experience offers a contrast, and yet still is an extension of the growing on-line experience.

What does all this mean? It means physical changes to the at-retail environment. Those physical changes need to be done on-time; on-budget and often times while the retailer is still open for business. The members of the PIC Division bring expertise and experience to the process of opening new stores. These agents of change help retail customers get the most out of there Cap Ex budgets and they do it in an efficient, safe and customer friendly manner.

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Remodel-Where the Action Is

September 20, 2011 by Newsfeed Editor  
Filed under Top Shelf

remodel

What if you could take a look into the new store and remodel plans and trends for five major grocery chains in one convenient place. A recent Supermarket News Webinar Maximizing Cap-Ex Returns - did just that. Editor Mark Hamstra hosted the event that featured a section entitled Trends in Capital Spending for U.S. Supermarkets. The section was lead by Andrew Wolf, the Managing Director of BB&T Capital Markets. Capital Expenditures or Cap-Ex is the place in the annual budget where retailers plan for new store growth, remodel of existing space and technological investments.

Wolf made three major points during his address. First, Cap-Ex is driven by and follows sales. Second, Cap-Ex spending is down significantly among the five chains he examined. Third, Cap-Ex is below trend when looking at the past ten years. The chains he studied where Kroger, Safeway, Whole Foods, Publix and Supervalu.

According to the BB&T research, the average Cap-Ex expenditure among the five chains in 2010 was 2.4% of sales. That is down sharply from an average of 3.0% in 2009. Not coincidentally, the NARMS PIC study published in early 2010 - Continuing to Build Out the Future of Retail – put the 2009 number at 3.35% across all retail channels.

In general, during the last two years sales have been either negative or flat and the square footage of the studied retailers has followed. Penetration by consumers has been great for grocery throughout a ten year period, but the number of trips per year has shrunk from 72 to 57. Channel blurring is thought to be the culprit.

More of the Cap-Ex dollar is going toward technological investment with closer to 40% of Cap-Ex going there rather than new store and remodel. That is up significantly from the 0% that was seen during the last five years. These numbers also match closely with the PIC Study.

Wolf also showed a dramatic shift toward remodel and away from news stores in his research. This also corroborates findings in the PIC Study that showed remodel related spending at 21% of Cap-Ex in 2006 vs. 38% in 2010. As a reminder, the PIC study looked at a much broader set of data in terms of number of chains and channels.

While these numbers and trends may be seen as troubling to at-retail merchandising and marketing service companies, the fact that remodel and technological spending is up represents a great opportunity. Some of that technology spending is being directed at self-service vending machines which could present installation and service opportunities.

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Filling the Landlord/Tenant Green Divide

June 16, 2011 by Newsfeed Editor  
Filed under Friday Focus, What's in store

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Some refreshing news came out of Washington, D.C. this week as DSN Retailing Today reported on a roundtable discussion among retailers and commercial shopping center developers. The topic was bridging the gap that exists among landlords and tenants over creating sustainable, energy-efficient retail stores in the United States. The meeting took place on June 9 and included Wal-Mart, Petco, Ann Taylor, Target, VF Corp., Best Buy, Westfield, Vornado and others.

The story states that both parties are investing in green practices and technologies, but progress has been limited by market conditions. The six-month collaboration is designed to identify barriers and issues that separate the trading partners and find areas in which they can work together.

It is clear that green practices are going to play a larger role as the retail industry looks to expand its presence, and yet reduce its environmental impact. For many years, the members of NARMS, professional at-retail merchandising and marketing service providers, have been bridging the gap between manufacturers and retailers by acting as an enabler of greater collaboration. Green initiatives may be yet another opportunity to play that role.

Building out new retail spaces and remodeling existing spaces to conform to changing industry norms and regulations are core competencies for many NARMS members, specifically the members of the PIC Division. These companies work hand-in-hand every day with landlords and tenants in retail locations across the country.

The resulting outcomes of the D.C. roundtable are yet to be determined, but will play out over the next six months. It makes sense for NARMS members to pay particular attention to this developing story as new opportunities to be of service to our customers are sure to arise.

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Retail CapEx on the Rise

remodel

According to an item in DSN Retailing Today, retail industry capital expenditures are expected to increase 16% in 2011. The story cites a survey by Equity Research that projects $42.5 billion in CapEx spending, a significant increase over 2010. The only channel that is not projecting double digit growth is mass merchant, which is still expected to be up by 9%.

That is welcome news for members of the at-retail merchandising and marketing industry. It is particularly good news for the members of NARMS PIC Division since a large portion CapEx is dedicated to new store openings and remodels. While the amount of spending is on an upward trend, it is still below the 2007 peak of $56 billion. The story goes on to report that there will be more of a shift of these dollars directed at remodels.

For comparison purposes, capital spending decreased 0.3% to $36.7 billion in 2010 and a huge 23.4% in 2009. The 2010 numbers are somewhat deceiving because most of the decrease was in the Food and Drug channels. Others like softlines, mass merchant, hardlines and mall anchors actually increased slightly in 2010. Merger and acquisitions spending increased 170% in 2010 over 2009 according to the survey.

If there is indeed a shift of CapEx dollars going toward maintaining and remodeling existing assets, then the in-store merchandising and installation expertise of NARMS members becomes even more valuable. Many of these projects take place while the store is still open for business. NARMS members are well positioned to provide experienced remodel labor which can bring stores up-to-date on time and on budget.

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What Retailers Seek in Site Selection

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Location, Location, Location. When it comes to buying real estate, those are said to be the top three considerations. For store planners and retail execs charged with finding new locations for expansion or acquisition, finding the right location at the right price is the name of the game. A recent article in Progressive Grocer offered Five Tips for Retail Site Selection. The author taps the expertise of Robert Tack, CEO of Capital Retail Group, a commercial real estate firm.

Tack says that too many retailers looking for new space are focused solely on the rental rate. While budget is always a consideration, he says that there are other key components. For members of NARMS, and specifically the PIC Division, knowing what your customer is looking for can help in providing top level service on new store build outs, remodels, acquisition conversions and relocations. Here are his tips:

Know the customer. Successful retailers employ tools and techniques to measure sales data and shopping demographics. He suggests that the retailer create a grading system using elements such as visibility, access, daytime population, income levels and traffic counts as a basis for compiling a passing or failing grade.

Know the location. Tack says that an acceptable rental rate is not an absolute figure, but is directly related to the sales potential of a location. Higher rates may yield even higher sales levels.

Know the market. This one is probably pretty obvious, but knowing the going rate for real estate in a given market is vital. Keeping options open and having a back-up plan is helpful if an agreement cannot be reached.

Know the neighbors. Surrounding businesses can provide helpful synergies on one hand or damaging competition on the other. Anchor tenants are important, but the profile of the smaller stores and businesses can be just as important.

Know the landlord. Retail leases are not usually short term deals. Tack says they usually are for at least five and more often ten years. That is a long time to live with someone you know nothing about.

If knowing the above information is critical to retail site selection, then it is also critical to providing top flight service to the buyer. At-retail merchandising, marketing and installation service providers should work closely with their retail customers to know this information and do a little research on their own to know what they are walking into.

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A Revisit to NARMS.COM

May 3, 2011 by Newsfeed Editor  
Filed under Top Shelf

Each year, companies who belong to a trade association have to make the choice to renew their membership for another year. No doubt, that decision causes a review of the cost versus benefit before the final decision is made. At NARMS, we are happy that so many at-retail merchandising and marketing service companies decided to join us again in 2011. We also want to remind you that if you are seeking added value features, there are many available every day by getting reacquainted with www.narms.com.

When visiting the site, you see a front page filled with information. The banner section gets you filled in on upcoming events, conferences and services such as the IFBA Top to Top Conference coming up on May 17-19 or the recently completed 16th Annual NARMS Spring Conference. There is already preliminary information on the 2012 Spring Conference that will be held in Tampa, Florida. There is also a link to each individual service division of NARMS. The MSO, Event Marketing, PIC, IFBA and Associate Divisions all have their own unique landing page.

NARMS is also committed to fresh content and thought leadership brought to you through two weekly blogs, Top Shelf and What’s In-Store. These are also sent out directly to your email box every Tuesday and Thursday. There is also a spot for NARMS corporate press releases. An advertising bar near the top of the home page includes a direct link to the NARMScertifyU program for your field reps and training staff. Upcoming segments of the hugely popular NARMS Webinar Series can be found by clicking the Webinar tab.

Under the Members Area pull down menu, make sure you check out Deals for Members, where you can find links to companies who have put together special programs for NARMS members at attractive rates. Services include transportation, health care options, business communication needs and vital human resource needs such as background screening services.

Each member of NARMS enjoys a searchable listing that can be used by CPG manufacturers and retailers to find the service company to fit their needs. Members have the option to upgrade to an Expanded Listing in order to provide even more information and links to their corporate site, blogs or videos.

One of the more popular uses for www.narms.com is for staffing purposes. Tens of thousands of field reps use the Recruiter to help find merchandising and other in-store work. Many of our members with Expanded Listings use the Recruiter as their main staffing database. Other members go a step further and choose to advertise their jobs using the NARMS JobBank. All of these listings also utilize social media to not only draw people to the site, but also push out the information to NARMS official Social Media Channels.

This column only scratches the surface to describe all the value added features of www.narms.com. To see for yourself, visit us today and keep coming back often.

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Shrinking Stores Equal Growing Opportunities

April 28, 2011 by Newsfeed Editor  
Filed under Friday Focus, What's in store

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National chains in all channels of trade have been investigating smaller formats as a means to battle recessionary forces. According to an article in Retail Traffic, several retail consultants and real estate brokers said the smaller footprints allow chains to leverage multi-channel shopping trends, more easily adapt to urban settings and operate more efficiently. Wal-Mart, Target, Best Buy and Gap are among the chains getting in on the action.

Wal-Mart plans for 2011 include opening 30 to 40 Walmart Market or Walmart Express units. In February, Target launched the CityTarget concept, with stores about half the size of a regular Target. The company plans to open four CityTarget stores in 2012, in Chicago, Los Angeles, Seattle and San Francisco. Best Buy plans to open 150 Best Buy Mobile stores in 2011, giving it a total of 325 by the end of the year. Others pursuing smaller formats include Old Navy, Giant Eagle, Trader Joes, Publix, Fresh Market and Sports Authority.

Smaller and more frequent stores play into the strengths of the members of NARMS. The ability to provide consistent and professional at-retail merchandising and marketing services in multiple locations and geographies is a core competency of the members.

Part of the rationale behind the smaller store trend is that retailers can be more flexible and responsive to changing consumer needs, much like their Dollar Store competitors. NARMS members can be at the forefront of this trend by allowing retailers and manufacturers the ability to execute headquarter level merchandising decisions at the store level on-time and on-budget allowing for quicker realization of the sales lift.

The opening of new locations will be challenging for big-box retailers, who will have to rethink the logistics of more locations in the same geography, rather than one huge store. The PIC division members of NARMS are expert agents of change who bring the efficiencies of working in all channels of trade and applying that learning to each opportunity. The trend allows retailers to more easily move into existing vacant or acquired real estate. PIC members have played a huge role in the acquisition conversion activity of the Chain Drug and Dollar Store channels, experience that will be vital in similar size stores.

No matter what the trend or challenge, NARMS members have been there for their retailer and manufacturer clients and will continue to offer flexible and cost effective solutions to the challenges of an ever evolving go-to-market system.

Spring Conference Meetings Bring Action

April 21, 2011 by Newsfeed Editor  
Filed under Friday Focus, What's in store

2011confMeetings at the 16th Annual NARMS Meeting, Conference and Exhibition, held last week, resulted in significant action by the NARMS Board of Directors to ensure the future prosperity of our Association. Leaders from the at-retail merchandising and marketing service industry engaged in a candid conversation in several forums. The first was the annual Board of Directors meeting, the second was a joint session of the Board and members of each Divisional Committee, and the third was a town hall question and answer session as part of the NARMS Annual Business Meeting. Here are the action items brought forward:

A committee will be formed to provide recommendations on the location and format for future Spring Conferences. The recommendations for locations will be in effect after 2012, as the Board had earlier decided to stick with the prior commitment to Saddlebrook in Tampa, Florida. The board is actively seeking volunteers to serve on this committee along with Jim Fulk, Judy Einbinder, and Marc Shapiro. Contact Ken McKenzie at NARMS headquarters if you would be interested in serving in this capacity.

The Board is proud to announce the following Division Chairpersons: Ken Kress and John Gillis will co-chair the MSO Committee, Lucas Pierce will chair the Event Marketing Committee, Gregg Morrison will chair the PIC Committee, Jim Hall will chair the IFBA Committee until a replacement can be determined, Kelly Baker will chair the Manufacturer Committee, and Charlie Fanning will chair the Associate Committee.

During the town hall Q & A, some concern was voiced over the current relevancy of the NARMS Mission Statement. Subsequent discussion revealed the need to review and revise the statement to better reflect the current state of the Association. Judy Einbinder has stepped forward to be the point person for the project. The revision will be passed through the board for input and then forwarded to the Membership to be reviewed.

Much attention was given to filling the vacant Executive Director position. The Board spent significant time listening to the members as they voiced their opinions about what they desired in a new leader. The Board is currently compiling a list of requirements in order to craft a job description to use in the search process.

The final, major topic of discussion revolves around the future strategic direction of NARMS. The Board will provide members with updates on a 60-day cycle, and more frequently if needed, to make sure that all members understand and support the direction and strategy of the Association. In doing so, the Board is seeking a greater level of transparency in initiatives such as RORI, Accreditation, and development of a project in collaboration with University of Wisconsin, Madison.

Perhaps the biggest observation from the annual get together is that the NARMS Board of Directors and leadership have been listening to the members and that the members have been heard. If you attended the conference, we are seeking your input on the event. Please click here to participate in a brief survey. #NARMSCON451

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Department Stores Reborn

February 22, 2011 by Newsfeed Editor  
Filed under Top Shelf

deptstoreDSN Retailing Today recently ran a story about a report issued by retail consulting and research firm Customer Growth Partners (CGP). One of the key findings of the report was that department stores gained market share last year for the first time since the 1980s. Factors credited with the movement include innovation and improved execution by the department store chains, as well as some regression by Wal-Mart.

The proverbial saying is that necessity is the mother of invention. It seems that top department store and mall operators came to the conclusion that things could not get much worse so why not use the recession as a gestation period and emerge born again. The quick and painful solution would be to cut costs, but the report says that department stores also used the tough times to readjust and become more relevant to consumers. An increased investment of dollars and innovation has resulted in new levels of excitement and execution that is being recognized by the new shopper mentality.

Some of the innovation being referred to has to do with major department resets and the construction of store-within-store concepts that leverage the department store location and convenience, while allowing product innovation and flexibility. It is the kind of work that is right up the alley of the NARMS PIC Division who are experts at at-retail reset, remodel and build-out work.

Attendees of the 16th Annual NARMS Spring Conference can hear about this and other retail trends with an emphasis on PIC activities on Tuesday, April 12 as Mark Hunter leads PIC Session #2 –Emerging Trends 2011. It is just one of many educational and networking sessions at the at-retail merchandising and marketing industry showcase event held this year in Monterey, California. Click here to access the Conference Center and to register. #NARMSCON483

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