IKEA is opening eight new small format locations in 2025 branded as “Plan & Order Points with Pickup”

IKEA is opening small format stores in the U.S. intended for customers to pick up merchandise after ordering online or onsite at these smaller store locations.

Seven of the eight new locations that IKEA will open in the spring or summer of 2025 are branded as “Plan & Order Points with Pickup” where shoppers can pick up their items when and where it’s convenient.

IKEA plans to open these new specially formatted stores in Cherry Hill, Penn., Hunt Valley, Md., Beaverton, Ore., Scottsdale, Ariz. and four locations in California (two in Southern California in Thousand Oaks and Ontario, one in Northern California in Colma and one Pick-up point in Santa Monica).

IKEA has 375 IKEA stores in 30 countries including 51 retail locations in the U.S.

Read more: IKEA U.S. announces eight new-format stores opening in 2025 (IKEA Corporate News)

Publicly traded retail REITs reported strong earnings in 4Qtr2024

Publicly traded REITs Simon Property Group, Kimco Realty Corporation, Regency Centers, Brixmor Property Group and Federal Realty Investment Trust all reported leasing activity at or near record levels that delivered high occupancy rates, rent growth and higher FFO projections going forward.

With retail occupancy rates up, demand for retail space is only improving. Retail vacancy was at a near record low of 5.4% during 4Qtr2024, according to Cushman & Wakefield. Nationwide, the U.S. experienced its highest net absorption of the year during Q4 at about 1.4M sq. ft. Average rent growth also rose around the country during Q4, hitting $24.59 per sq. ft., or 2.8% growth over the same period in 2023.

Headwinds in January and February 2025 may slow down retail somewhat, with things like the California wildfires, unseasonable cold weather throughout the country, a rise of retail tenant bankruptcies and new tenant credit risks. Specific reports from various REITs covering the fourth quarter results are in linked story.

Read more: Record Q4 Leasing Underpins Retail Optimism As REITs Predict A Rollicking 2025 (Bisnow)

Forever 21 possibly heading to yet another bankruptcy

Forever 21 is facing another bankruptcy as soon as March 2025, in which 200 more underperforming stores could close, according to news reports.

The potential bankruptcy plan is seeking a buyer for the retailer’s remaining stores, but if no qualified buyer emerges, Forever 21 would liquidate the entirety of its approximately 350-store chain. At the height of its popularity, Forever 21 operated more than 500 locations in the U.S. and at least 800 worldwide.

The Forever 21 trademark and intellectual property are owned by Authentic Brands Group, which licenses them to the operating company that would undergo the Chapter 11 process. Authentic’s ownership of the Forever 21 brand would remain intact through the bankruptcy, so even if all stores close, Forever 21 apparel might still be sold at other stores in the future because Authentic would license the brand to other wholesalers and retailers.

Read more: Forever 21 Plans Hundreds of Store Closures in Second Bankruptcy (Bloomberg)

If you want to lease to Trader Joe’s, better focus on its real estate strategy

In an episode of the "Inside Trader Joe's" podcast, Matt Sloan, Trader Joe's vice president of marketing, discussed what it takes for the popular specialty grocer to pinpoint the right location to open a new store. What are the factors that TJ’s considers to make real estate decisions?

• Population density near higher-traffic areas (prefers to saturate markets rather than jump to new states where it doesn’t already have stores)

• The access and visibility of the site (traffic patterns matter; easy in-and-out access, right and left turn ingress and egress; signalized intersections are ideal, good visibility and good traffic patterns are key)

• Is there sufficient parking? Usually at least 80 parking spaces; ratio of eight spaces per 1,000 sq. ft. of leasable area is better than the typical five to 1,000 sq. ft. that other grocers require

• Supply chain access (loading docks, building and other tenant occupancy scenarios and good flow of vehicular traffic and pedestrians within the store site)

• Organic growth building one store at a time (no acquisitions of existing grocery chains to convert to a TJ’s, as ALDI has done to enter new markets)

• Generally, prefers between 12,500 and 15,000 sq. ft. locations in a retail setting; will lease or purchase the land

One reason most landlords want a Trader Joe’s is because the chain is among the top performers in terms of sales per square foot productivity among grocery stores; TJ’s is often more productive than most other retailers, generally doing around $2,000 per square foot in annual sales.  

However, Trader Joe’s doesn’t typically open too many stores. In 2024, TJ’s opened 34 new stores coast-to-coast (half of them in the fall), but for historical comparison, that was triple the number of new stores that TJ’s opened in 2023 and more than five times the amount it opened in 2022. Trader Joe’s expansion strategy in 2024 was in existing markets rather than entering new states.

Trader Joe's operates 593 stores in the United States across 42 states plus the District of Columbia. California has the most Trader Joe's stores, with nearly 200 stores, about a third of the chain's total locations. In 2024, California was the state where the company opened the majority of its new locations.  

Trader Joe’s has already announced the opening of about a dozen stores for 2025, mostly around major metro areas such as one in the Greenwood neighborhood of Seattle, one in Meridian St. at the previous Bed Bath & Beyond location in Bellingham, Wash. (just north of Seattle), three in Los Angeles County (one in Ventura Blvd. in Tarzana, one in Reseda Blvd. in Northridge and one on Riverside Dr. in Sherman Oaks), one around Nashville (at Nichols Hills Plaza on Medical Center Parkway in Murfreesboro, Tenn.), one in Hoover in the the former Bed Bath and Beyond space on Montgomery Hwy., just south of Montgomery, Ala., two in Washington, D.C. (one on Wisconsin Avenue, the other on Monroe St.) , one at the former Dawson's Market in Rockville, Md., one in the former CVS store on Lancaster Ave. in Berwyn, Pa. (Chester County near Philadelphia), and one in New York City’s Tottenville neighborhood (Staten Island).

Almost half of all Trader Joe’s stores are located in California, New York, Florida and Washington state. The chain is headquartered in Monrovia, Calif., east of Los Angeles. The founder, Joe Coulombe opened the first Trader Joe’s store in Pasadena, Calif. in 1967. Trader Joe's is now privately owned by ALDI Nord, part of the ALDI Group, which owns the ALDI USA supermarket chain. ALDI Nord acquired Trader Joe's from Coulombe, in 1979.

Read more: Here's How Trader Joe's Decides Where To Open New Stores (Tasting Table)

Kentucky Fried Chicken headquarters to leave Kentucky for Texas

TFC doesn’t quite evoke that finger lickin’ good taste as does the familiar sounding KFC, but the beloved Kentucky Fried Chicken chain is moving its headquarters from Kentucky to Texas nevertheless.

The fast food food chain was launched by Colonel Harland Sanders with his secret blend of 11 herbs and spices in 1930, and Kentucky became its trademarked name. Soon, it will be based in Plano, north of Dallas, according to Yum! Brands, which owns KFC, Taco Bell and Pizza Hut.

Yum said the move is part of its broader plan to designate two brand headquarters in the U.S., one in Plano and the other in Irvine, California. KFC and Pizza Hut will be headquartered in Plano, while Taco Bell and Habit Burger & Grill will remain based in Irvine.

Read more: KFC is leaving its ancestral home as parent company moves its corporate office to Texas (Associated Press)

Unibail-Rodamco-Westfield: 11 malls no longer for sale

Unibail-Rodamco-Westfield has concluded that most of its U.S. A++ malls and B+ malls with a potential to become A+ malls are gold mines and has decided not to dispose of 11 of those malls, a strategic change over decisions the French-based company had made in 2022.

URW CEO Jean-Marie Tritant believes U.S. flagship assets will deliver further growth and value creation.

Read more: Unibail-Rodamco-Westfield Says It Won't Sell Its Top U.S. Malls After All (Bisnow)

JCPenney closing eight stores in 2025

JCPenney has announced the closure of eight stores in 2025. The new closures are in addition to more than 200 big-box stores that the once-beloved anchor of America’s malls has closed since the company filed for bankruptcy five years ago. The new closures are:

- The Shops at Tanforan in San Bruno, California

- The Shops At Northfield in Denver, Colorado

- Pine Ridge Mall in Pocatello, Idaho

- West Ridge Mall in Topeka, Kansas

- Westfield Annapolis Mall in Annapolis, Maryland

- Fox Run Mall in Newington, New Hampshire

- Asheville Mall in Asheville, North Carolina

- Charleston Town Center in Charleston, West Virginia

Read more: JCPenney to close 8 locations in 2025. Is your store closing? See the list. (USA Today)

Walmart’s CapEx is skyrocketing in recent years

Over the past three fiscal years, Walmart spent a total of more than $42 billion in CapEx to further its business growth in the United States, about 80% more than in the preceding three years. Capital investment by Walmart not only covered supply chain, infrastructure and e-commerce but also new stores, store renovations, expansions and relocations.

Read more: Walmart Is Retail King Again. Can It Keep the Crown? (The Wall Street Journal)

Joann will close more than half of its stores

In a filing with the bankruptcy court, Joann Stores revealed that it would be closing 533 of its roughly 850 locations across the U.S.

Court documents list those locations across 49 states, and are listed in the story linked here with the largest numbers of closures as follows:

- 61 stores in California

- 36 in Florida

- 33 each in Michigan, Ohio and Pennsylvania

- 26 in Illinois

- 24 in New York

- 21 in Washington

- 20 in Indiana

- 19 in Massachusetts

Read more: Joann closing 500 fabric and craft stores in 49 states: Search full list of closures (USA Today)

Inflation is still not contained but not enough to stall retail leasing

Inflation is still alive and well in the U.S., and the bond markets are beginning to price maybe just one interest rate cut by the Fed in 2025. That’s the bad news.

But other than the price of eggs currently currently rising as a result of the bird flu outbreak in the U.S., the inflationary outlook is not so bad for most costs other than services, a labor factor that is not likely going to be influenced by new tariffs on imported goods.

In the most recent report this week, headline inflation rose from 2.9% to 3.0%, and core inflation, excluding food and fuel, rose from 3.1% to 3.3%; that’s not so alarming.

While core inflation (excluding food and fuel) rose, three other key measures and the Fed’s “supercore” (services excluding shelter) fell. In all cases, they remain above 3%, which it is still too high for the Fed to accept.

Read more: Eggs-istential Inflation Scrambles Bond Markets (Bloomberg)

Dutch Bros Coffee will open 160 new stores in 2025

Dutch Bros Coffee hit a milestone with the opening of its 1,000th store in Orlando in February 2025.

It has already opened 18 new stores since the start of the year, and expects to open at least 160 locations in 2025, representing a store growth of 16% from the 2024 store count.

In 2024, the drive-thru coffee chain opened 151 new shops (most of which were company-operated rather than franchised) across 18 states. Dutch Bros sees the potential for operating up to 4,000 shops, a growth spurt of four times its current count.

Read more: Dutch Bros reports strong Q4 growth; opening 'at least' 160 shops in 2025 (Chain Store Age)

Denny’s will shutter between 70 and 90 locations in 2025

In its most recent earnings report, Denny's announced it closed 88 locations in 2024, and will shutter between 70 and 90 locations in 2025, bringing the number of total restaurant closures for the combined two years to almost 180 in total.

Some of the diners slated to close were selected because they have expiring leases, have been open for more than 30 years (making them too expensive to remodel) or are located in declining markets.

Denny’s renovated only 23 locations in 2024 out of the 1,300 locations it has across the United States.

Read more: Denny’s is closing dozens more restaurants (CNN)

Malls rated class B- and below are likely to be repurposed over the next 10 years

According to Green Street, “The retail prospects for most malls graded ‘B-’ or below are generally dire; many will be repurposed with another real estate use over the next decade.”

But some experts — including the country’s largest owner of shopping malls Simon Property Group — believe that upgrading a B+ mall that is located in a good market with limited competition into an A- mall is doable given a sound capital allocation strategy for renovation, targeted leasing and marketing.

Read more: The Future of the American B Mall (and Other Grades) Remains in Flux as Fortunes Diverge (Retail Wire)

About 220 Winn-Dixie and Harveys groceries stores to close and reopen as ALDI

ALDI USA is disposing of roughly 42% of the approximately 400 Winn-Dixie and Harveys Supermarkets locations it acquired in 2024 and found unsuitable to convert to the ALDI brand. The balance of the stores ALDI acquired (about 220) will be reopened with the ALDI format and brand, with roughly 100 slated to reopen as ALDI stores by the end of 2025. Meanwhile Winn-Dixie and Harveys will continue to operate under their respective brands until they close.

The 170 stores ALDI has divested will go to a consortium of private investors led by Anthony T. Hucker, the current president and CEO of Southeastern Grocers (former owner of the Winn-Dixie chain), and C&S Wholesale Grocers. If you recall, C&S had been slated to acquire nearly 600 supermarkets from Kroger and Albertsons in connection with those retailers’ failed plan to merge.

Read more: Private investor group acquires Winn-Dixie parent Southeastern Grocers from Aldi (Florida Times-Union)

Retail leases accounting for almost 60 million square feet will expire in 2025

Leases comprising about 58.5 million square feet of retail space are set to expire this year. Landlords will surely seek to bring up expiring rents to market rents as they renew or find replacement tenants because overall vacancy is at an all-time low. Rent spreads continue to improve for retail but for the office sector, spreads are worsening.

About 85.5 million square feet of space leased to offices will expire in 2025 as vacancy in that sector is rising and office tenants are seeking less space or fleeing to Class A newer properties.

Read more: 265M Square Feet of Leases Set to Expire in 2025 (GlobeSt)

U.S. store closures to double in 2025

An estimated 15,000 stores will shutter in 2025 in the United States, compared to 7,325 in 2024, according to Coresight Research. Likewise, the number of new store openings is expected to fall to 5,800 in 2025 from 5,970 in 2024.  

More than 2,000 stores have already closed in 2025, according to Time Out, which represents an increase of 334 percent YoY. Also, several national store chains have announced consolidations, closures and even bankruptcy, including department store chain Kohl's, discount retailer Bargain Hunt and furniture/home goods retailer Big Lots. Other major names such as Walgreens, Macy's and Starbucks are also planning to consolidate some of their physical locations overlapping in some markets over the course of the year.  

On a positive note, there is still significant tenant demand for quality retail space and overall vacancy remains low. The national retail vacancy rate in the United States hovers around 4%. The vacancy rate has been below 5% for nearly three years.

Read more: US Store Closures Predicted to More Than Double in 2025 (Newsweek)

Take 5 Oil Change to double store count

Take 5 Oil Change plans to double its store count in the next four years. “We’ll be a 2,500-location business one day,” said Take 5 President Mo Khalid.

The business was acquired in 2016 by Driven Brands Inc., the operator of national automotive service concepts that include Meineke, CARSTAR Auto Body Repair Experts, Maaco Corporation and Auto Glass Now. Through franchising, Driven Brands has expanded Take 5’s presence into 42 states with more than 1,100 locations.

Read more: Take 5 Oil Change to Grow (Retail Leisure International - RLI)

Somnigroup will operate over 2,800 retail locations worldwide

Starting on Feb. 18, 2025, a name you’ve never heard will be the world’s largest mattress company that manufactures, wholesales and retails bedding products: Somnigroup International. The name is derived from “somn” meaning sleep in Latin, and “omni” meaning all.

Somnigroup is none other than Tempur Sealy International, which is rebranding its corporate name later this month after closing its $5 billion acquisition of Mattress Firm Group this week.

The Mattress Firm, Dreams and Tempur Sealy businesses will operate as decentralized units. Under Somnigroup, Mattress Firm and Dreams will continue to operate as retailers of multibranded bedding products. Tempur Sealy will continue to manufacture bedding for multiple retailers including its affiliated Mattress Firm, Dreams and its own DTC omnichannel.

The U.S. Federal Trade Commission had placed a preliminary injunction last year to stop the takeover but a U.S. District Court judge in the Southern District of Texas ruled in favor of the merger last month, which paved the way for completing the acquisition. The company will sell 73 Mattress Firm locations and the Sleep Outfitters USA retail chain, which includes another 103 stores to help appease antitrust regulator’s concerns.

Somnigroup will operate over 2,800 retail locations worldwide after the divestitures are completed in the second quarter of this year.

Read more: Tempur Sealy to Become Somnigroup After Mattress Firm Deal Closes (The Wall Street Journal)

Amazon has repurposed 25 struggling malls into distribution centers

As the total amount of operating malls decrease in the U.S. below the magical 1,000 mark, did you know that Amazon has already repurposed 25 struggling malls into distribution centers? Twenty-five!!!

Amazon acquired malls in Baton Rouge, Louisiana; Knoxville, Tennessee; Cleveland, Ohio and Worcester, Massachusetts, to convert them into fulfillment centers.  

Between 2016 and 2019, Amazon repurposed around 25 malls, but it also considered turning former declining department store locations into distribution hubs. The demand for data centers from Amazon's cloud business and Amazon Web Services (AWS) as well as Microsoft Azure, Google Cloud, Equinix, Digital Realty, CyrusOne, Vertiv Holdings Co. and Oracle Cloud are likely to consider dying malls as target real estate for data center operations. 

As many malls face declining cash flow, loan maturities and closures, selling the potentially valuable real estate as well-located land in commercial districts for redevelopment has become an appealing option.

Read more: Why Amazon and Walmart Suddenly Like Malls (PYMNTS)

Surprise! Walmart has acquired Monroeville Mall near Pittsburgh

Walmart’s acquisition of Pittsburgh’s Monroeville Mall was unexpected but the investment can make financial sense in the long run given how valuations of Class B and C malls have plummeted over the past decade and how much of an upside can be realized by investing capital to redevelop them.

Walmart certainly has the real estate expertise to own and operate shopping centers but I would have envisioned a joint venture with a traditional retail developer to tackle ownership, redevelopment, leasing and operations of a mall. We might see that JV in the near future as the redevelopment of the site gets underway.

In the 1970s and 1980s, retail chains were owners and developers of shopping malls, such as Allied Stores Corp., R. H. Macy & Co., The May Department Store Co., Homart Development Company (a subsidiary of Sears), Federated Department Stores (now Macy's Inc.) and Dayton-Hudson Corp. (now Target Corp.). Is this a sign of more change in mall ownership or just a one-off opportunistic investment for Walmart?

We’ll have to wait to see how Walmart’s plan for Monroeville unfolds. With retail vacancy at an all-time low, there’s tremendous opportunity to redevelop retail space for more efficient configuration and uses, some of which will surely include housing to satisfy demands.

Read more: Walmart takes on role of mall landlord with acquisition (CoStar News)