The Kroger Co. is pulling back from developing a network of automated e-commerce fulfillment centers and will instead focus on expanding its brick-and-mortar grocery store network.  

The grocery chain announced it would close three of its eight robotics-powered fulfillment centers. The centers marked for closure are in Groveland, Florida, Pleasant Prairie, Wisconsin, and Frederick, Maryland. 

The company has also scrapped plans for another fulfillment center in Charlotte but will still build a previously planned fulfillment center in Phoenix.

With the announcement, the Cincinatti-based grocer admitted that its pandemic-era gambit to invest in robotics-focused warehouses to expand its market reach was dragging its e-commerce earnings into the red and creating significant headwinds for its bottom line.

“We haven’t allocated enough capital to growing stores because we have allocated a lot of capital in other areas like fulfillment centers,” Kroger Chairman and interim CEO Ronald Sargent said on an earnings call Thursday. 

The company anticipates taking a write-down of approximately $2.6B in 2026 because of the closures. As part of that, Kroger will make a one-time payment of $350M to UK-based robotics company Ocado, which built the robotic fulfillment systems.

Sargent said Kroger plans to open 14 new grocery stores in the fourth quarter and increase new-store builds by 30% throughout 2026. In June, the chain said it will actualize a net loss of 30 stores over 18 months as it closes 60 underperforming locations but opens 30 new ones, according to Food Business News.

GlobalData retail analyst Neil Saunders characterized Kroger’s push to focus on automated customer fulfillment centers as a “misadventure” undertaken during the tenure of former CEO Rodney McMullen, who resigned in March after an internal investigation into his conduct.

While the automated warehouses drove down the cost of picking and packing groceries for online orders, Kroger wasn’t able to deliver the groceries at the scale needed to offset the additional shipping costs of servicing a farther-flung network, McMullen said, according to CoStar. 

Kroger said it will now deepen its relationship with the third-party grocery delivery services Instacart, DoorDash and Uber Eats instead.

Since the announcement and earnings call, Kroger’s stock price has lost some 6% of its value, hovering near a six-month low of $63.31 in midday trading Friday.

Belk is incorporating its outlet concept in two of its Atlanta stores. The Charlotte-based retailer will bring that concept to Eastridge Mall in Gastonia and Triangle Town Center Mall in Raleigh.

Both sites have existing two-floor Belk locations. Plans call for converting the ground level into outlet space, while Traditional Belk stores will continue to operate on the second level. Both outlet stores are targeted for a spring opening.

With the opening of the outlet concept at Northlake Mall in Charlotte, Belk now has three outlet locations in North Carolina. The Charlotte Business Journal reports the outlet stores carry high-end, national designer brands as well as Belk’s brands marked down 60% to 85%. Belk has opened 17 outlet locations and 300 stores nationwide.

Belk underwent a restructuring in July 2024. The move cut nearly $1 billion in debt and secured $485 million in new capital.

Fabrics and crafts retailer Joann will close 500 of its 800 stores in the coming months as it goes through its second Chapter 11 bankruptcy, according to published reports. CNN reported that the closings cover all 50 states, with California, Florida, Indiana, Michigan, New York, Pennsylvania and Washington among those most heavily affected.

In its second bankruptcy filing last month, Joann cited inventory issues that were “acute and unexpected,” according to CNN. The company had previously revealed in court documents that it faced an “unexpected ramp-down, and, in some cases, the entire cessation of production” of some critical products.

The company also said it at the time it was looking for a buyer. Newly filed court documents reveal that as the “sale process progressed, and prospective bidders continued to conduct diligence and refine their potential bids, the debtors and their advisors were able to identify a subset of underperforming stores that are unlikely to be considered or included in any going concern bid.”

In all, more than 15,000 stores are projected to close across the U.S. this year, CNN reported, citing data from Coresight Research.

The retail store, formerly known as Lumber Liquidators, found a last-second buyer. Just last week, the company, now called LL Flooring, informed the public that it planned to close all its stores and go out of business, shuttering 200 stores nationwide and six in the Phoenix metro area. But an investor entered at the last minute and secured a last-minute deal.

F9 Investments will buy 219 stores along with its Virginia distribution center, online platform and intellectual property. F9 is a Miami private equity firm led by Thomas Sullivan, who founded Lumber Liquidators in 1994 and is an existing shareholder. Sullivan says the stores will re-open under the Lumber Liquidators name.

The company, which went public in 2007, blamed its troubles on higher interest rates and a drop in home sales, which led to fewer home improvement projects. It changed its name in 2022 to rebrand after a “60 Minutes” report on heightened formaldehyde levels in its products.

Express, Inc. said Monday it had filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware and will close approximately 95 Express stores and all 12 UpWest locations. The Columbus, OH-based retailer has received a non-binding letter of intent from a consortium led by WHP Global to acquire a substantial majority of its stores and operations.

Subject to court approval, Express has received a commitment for $35 million in new financing from certain of its existing lenders. Last week it received $49 million in cash from the Internal Revenue Service related to the CARES Act.

The bankruptcy filing had been expected, with news surfacing earlier this month that the 44-year-old retailer was exploring Chapter 11 protection. “With the company struggling to gain traction with consumers, it has been obvious for quite some time that bankruptcy was the inevitable destination for Express,” Neil Saunders, managing director of GlobalData, was quoted by CNN as saying.

WHP Global’s partners in the consortium include a wholly owned indirect subsidiary of Simon Property Group, L. P. and Brookfield Properties. New York-based WHP already owns a 7.4% stake in Express.

“WHP has been a strong partner to the company since 2023, and the proposed transaction will provide us additional financial resources, better position the business for profitable growth and maximize value for our stakeholders,” said Express CEO Stewart Glendinning.

The company didn’t specify which Express locations would close down. Currently it operates about 530 stores under the Express, Bonobos and UpWest brands.

Kirkland & Ellis LLP is serving as legal counsel to Express, Moelis & Company LLC is serving as investment banker, and M3 Partners, LP is serving as financial advisor. Information about the company’s court filings is available here.

Pictured: Express storefront in Manhattan’s Flatiron District, circa 2013.

Commerce, CA-based 99 Cents Only Stores LLC said Thursday afternoon it would close all 371 of its stores. The company entered into an agreement with Hilco Global to liquidate all merchandise and dispose of certain fixtures, furnishings and store equipment. Sales under this agreement are expected to begin Friday.

Hilco Real Estate is managing the sale of the company’s real estate assets, both owned and leased, in Arizona, California, Nevada and Texas. To help facilitate the wind-down, the company appointed Chris Wells, managing director at Alvarez & Marsal, as chief restructuring officer. Mike Simoncic, interim CEO of 99 Cents Only Stores and managing director at Alvarez & Marsal, will step down.

“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” said Simoncic. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures and other macroeconomic headwinds, all of which have greatly hindered the company’s ability to operate. We deeply appreciate the dedicated employees, customers, partners and communities who have collectively supported 99 Cents Only Stores for decades.”

Founded in Los Angeles in 1982, 99 Cents Only Stores maintained a tradition for decades of selling TVs for 99 cents to the first few customers at each store opening. Its liquidation announcement comes a few weeks after Dollar Tree announced that it would close 970 Family Dollar stores.

Pictured: A 99 Cents Only store in North Hollywood, CA. Photo credit: Downtowngal/Wikipedia.

PetSmart is planning to reopen two stores in the Chicago area after closing several locations earlier this year. Both of the new stores are close to the previous locations they are replacing.

The new locations include a 20,000-square-foot store at 2534 N. Narragansett Avenue and a 17,000-square-foot store at 20393 N. Rand Road in Kildeer, reported the Chicago Business Journal. Both locations have grand opening events scheduled. Previously, the company operated a 26,000-square-foot store at 6655 W. Grand Ave. and a 20,000-square-foot store at 20771 N. Rand Road in Kildeer.

PetSmart spokeswoman Amber Schlaefer told the outlet, “The new locations feature an updated format that will offer a better customer experience including a cleaner look and feel with more efficient use of the footprint, updated salon and adoption areas.” PetSmart has more than 1,660 locations in North America and the stores sell a variety of pet food, treats, toys, and apparel, and provide training, grooming, and boarding.

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Although the federal funds rate has remained the same since the third quarter of 2023, dollar stores’ average cap rate increased from 6.34% to 6.51% during Q3, or 17 basis points, B+E reports. This rise is well aligned with market norms, as sellers recalibrate pricing to facilitate financing access and keep pace with Federal Reserve rate hikes, the company says in its report on the dollar store sector. 

“In response to inflationary pressures, dollar stores are experiencing a decrease in customer purchases, particularly for essential items,” the report states. “Non-essential products, which produce higher profit margins, are experiencing less sales volume.”  

Although profit margin pressures will likely continue during economic uncertainty, B+E predicts that Dollar General and Dollar Tree will likely ride out the inflationary period and continue modestly expanding location count. “Moreover, dollar stores have benefitted from a reduction in ocean freight costs and an increased customer base with household incomes over $125,000,” according to the report. 

On-market listings for single-tenant dollar stores increased 13% in Q3 from 477 to 538. This can be attributed to rising interest rates, pushing independent levered buyers out of the buyer pool.  

The Tice’s Corner Apple Store, in Woodcliff Lake, New Jersey, is one of the last remaining stores with Apple’s previous black storefront, Bloomberg reports. The store is due a makeover next year, updating it to match Apple’s other stores.

Tech giant Apple is shaking up its storefronts with global expansion and relocation plans.

Apple is planning 53 new, relocated or remodeled locations globally, Bloomberg reports. While the bulk of its new locations are destined for the Asia-Pacific region, Apple plans to open four new stores in the U.S. and Canada and find new real estate for some existing stores.

The consumer electronics maker, now 22 years into its brick-and-mortar retail strategy — which is based more on brand-building and the Genius bar than retail sales — is planning to spruce up or relocate 13 stores in North America. Additionally, Apple is looking at six relocations or remodels in Asia and nine in Europe, Bloomberg reported, citing unnamed sources.

New stores currently being discussed could include a new Miami location, a store in London’s Battersea Power Station close to Apple’s UK headquarters, and a Shanghai location in Jing’an Temple Plaza. Apple is reportedly also planning to upgrade its Paris location in the Opera shopping district, as well as looking at three development sites in India and the tech giant’s first Malaysian outpost.

Torrance, in Southern California, is one U.S. location where Apple is reportedly considering a new store in 2024, in addition to space at Miami’s Worldcenter development, relocating a store in Ann Arbor, Michigan, and opening a new store in Detroit, per Bloomberg. North Carolina’s Birkdale Village mall may also get an Apple Store, as the tech company considers moving a store from a location in Charlotte.

Apple has reportedly already agreed to leases with landowners and has many of its planned stores under development. Deirdre O’Brien has been in charge of the tech giant’s retail operations since stepping into the role in 2019, while Kristina Raspe is managing store construction and maintenance.

Apple operates more than 520 stores across 26 countries, with approximately half of those in the U.S.

It’s been an up-and-down year for retail, which has seen several high-profile bankruptcies including Bed Bath & Beyond, David’s Bridal and Party City. This past week, Invicta Stores, a watch retailer with two dozen locations, filed for Chapter 11 restructuring and plans to reduce its footprint, Bisnow first reported. But retail landlords have reported strong rent growth and occupancy as the economy has stayed resilient amid rising interest rates.

When Paul Nair opened the first location of his upscale neighborhood grocer, Savi Provisions, in Atlanta’s Inman Park neighborhood in 2008, he didn’t realize he was on the cutting edge of a trend that has begun to reshape retail markets from the suburbs to prime corners of Manhattan.

Savi Provisions, which serves curated wines, high-end cheeses and chef-prepared meals, should open its 25th location next year after expanding to Nashville, Savannah, Durham, Raleigh and Charlotte, Nair said, and his next concept is doubling down on the collision of convenience and craft food and beverage.

This month, Nair expects to open the first UPop, which stands for Urban Provisions Offering Petroleum, an Arco gas-served convenience store on Peachtree Road in the heart of Buckhead, Atlanta’s toniest neighborhood. Unlike QuikTrips, Wawas or 7-Elevens, UPop will still be selling Savi’s high-end product selection, replete with liquor and a cigar bar, Nair said.

“What I’m trying to do is I’m trying to elevate the convenience store experience to a higher level,” Nair said.

Courtesy of Landini & Associates/Kyle Ford

Aldi’s convenience store concept in Australia, known as Aldi Corner Store.

Nair has more competition than ever. Upscale convenience store concepts have expanded across the country, from new entrants like Foxtrot in Chicago and Washington, D.C., and The Goods Market in Los Angeles, to the largest convenience chain in the country, 7-Eleven, launching its Evolution concept in Dallas and other markets.

Consumers were already shopping at convenience stores more often before 2020 as millennials and members of Generation Z demonstrated more willingness to buy prepared meals and craft beer and wine than tobacco products and candy, said Mark Landini, a retail brand consultant out of Sydney who has done work for such retailers as Walgreens, Aldi and 7-Eleven.

Landini said the coronavirus pandemic accelerated the trend, as more affluent consumers bought their merchandise closer to home, especially from convenience stores where operators focus on curating higher-quality food and beverages.

“[Store operators] are now realizing they don’t just need to appeal to the lowest common denominator,” he said. 

Convenience store sales reached a record high of $243B last year, with beer, wine, liquor, edible and non-edible groceries leading the charge, according to Convenience Store News’ 2021 industry report. Merchandise totaled 45.6% of all sales in 2020, jumping from 36% of all sales the year before.

Edible grocery sales from convenience stores grew by nearly $12.5B between 2019 and 2020, or a 9.6% increase, according to the Convenience Store News report. During that same period, sales of beer and malt beverages jumped 14% to $24.6B and sales of liquor and wine skyrocketed 30.9% to nearly $5B.

The growth was helped by services like Grubhub and Uber Eats, which began to pick up goods from some convenience stores and deliver them to customers, typically within an hour. 

“Everyone wants convenience. Everyone wants it faster and everyone wants it easier,” National Association of Convenience Stores Vice President Jeff Lenard said. “That’s good when you’re a convenience store. That’s bad when every other retail store realizes that and now you’re competing on convenience.”

Now, convenience store operators are focusing more on luring in affluent shoppers by focusing on prepared meals and healthier food fares, experts say. That has appealed especially to millennials and Gen Z consumers who have demonstrated a willingness to pay more for organic, sustainable and gluten-free foods. 

“We’re seeing that [as] more of a focus, that convenience aspect. But the upper scale seems to be really popular right now,” said Aaron Farmer, president of the national retail consulting firm The Retail Coach. “I think that consumers have more disposable income. In a sense, it’s like room service, if you will.”

At the same time, convenience stores operations are relying less on fuel sales, a segment that took a huge hit during the pandemic. Fuel sales declined by nearly 20% in 2020, according to the CSN 2021 industry report. 

The trend is prompting operators to experiment with store locations without gas pumps in car-centric cities. In Midtown Atlanta, QT opened its first fuelless store location in 2016, surrounded by high-end apartments and condominiums. That setting helped QT forgo the need for gas, Coro Realty President Robert Fransen said.

Coro owns the property where the QT’s convenience-only store is located, as well as a locally owned convenience store in Downtown Atlanta that was recently renovated and upgraded with more of an emphasis on food and beverage.

Courtesy of Air Guitar

Air Guitar co-founders Craig and Kris DeMarco and Elissa and Eric Seitz

“It used to be a place you go get a beer and cigarettes. Now it’s where you go for fresh, prepared foods,” Fransen said. “I wouldn’t do my grocery shopping at a QT. But if I lived in a condo and I wanted to grab a couple of beers and a pizza … No one is going to confuse it with Whole Foods, but it’s certainly nicer than your typical 7-Eleven with the Keno machines.”

Matthew Fernandez, a retail broker at New York City-based Okada & Co., said the overall growth of convenience stores has bigger chains leasing prime retail corners in New York City as they chase the business once dominated by mom-and-pop bodegas.

“The higher-quality, better operator is the one getting the expansion opportunity, for sure,” Fernandez said. “You’re seeing more convenience stores taking untouchable corner property.”

Amazon began its cashierless Go format in a 1,900 SF storefront in Seattle in 2016. Today it has stores in Chicago, New York and San Francisco, and it is increasingly expanding into grocery beyond its Whole Foods subsidiary. But it isn’t the only digital native attempting to stake out a corner in the convenience store space.

DoorDash, the online delivery platform, began rolling out a DashMart convenience store concept in a host of U.S. cities last year. The firm just filed permits to open its first store in Atlanta in Midtown, the epicenter of the city’s tech boom.

“The No. 1 e-commerce platform or store, Amazon, is getting into the convenience store game,” Farmer said. “If your No. 1 e-commerce retailer is getting into brick-and-mortar, they see something as well.”

The majority of convenience stores are in rural areas, Lenard said, but convenience store presence in the cities is growing. Of the more than 150,000 convenience stores across the U.S., 15% of those are in urban locations, and another 30% are in suburban areas, according to NACS.

“With the perception that fuel will be less important and food will be more important, you see stores looking to locate where walk-up traffic is as sufficient as drive-up traffic,” Lenard said.

“It’s taken 30 years for the perception of convenience store food to change, and it’s taken a lot of work by a lot of really good retailers, where convenience stores are considered a destination, versus desperation,” he added. “Now the model is, ‘Now I really go there because I want something to eat or drink, and, oh by the way, I need gas.’”

Eric Seitz’s family has run a chain of Chevron convenience stores for 60 years, but Seitz senses the key change in the market and is responding. He launched a new convenience store concept, Air Guitar, that offers sandwiches, curated wines, high-end coffees, drinks like kombucha and even an ice cream parlor — but not gasoline. 

Air Guitar has been open for more than a month in Gilbert, Arizona, and has been doing well enough that Seitz is looking to expand the concept into 20 locations in the Phoenix metropolitan market and eventually to the West Coast.

“We just wanted to try something different. Fuel is difficult and who knows what the future holds in the next 20 years. It is very commodity-based, and I was trying to get away from that a little bit,” he said. “I’m more destination. We tried to create more destination than commodity-based.”