2024 Retail Predictions?

[mbz321]

Anyone want to make some wild (or not so wild) predictions for 2024? Will Kroger and Albertsons marry? Will Winn Dixie's actually become Aldi? Is Rite Aid a goner?

[ClownLoach]

Anyone want to make some wild (or not so wild) predictions for 2024? Will Kroger and Albertsons marry? Will Winn Dixie's actually become Aldi? Is Rite Aid a goner?

I think the Kroger-Albertsons deal falls through as the necessary divestitures in the PNW specifically push them past the 650 mark and Kroger pulls out due to shareholders push back (because at that point they could build an entirely new chain the size of Albertsons with 2000+ brand new stores for less!).

Albertsons will still wind up in multiple sale transactions by end of 2024, possibly including a sale of just the Northeast to Kroger. Albertsons sells underperforming divisions like Texas and others, becoming a leaner and more profitable enterprise primarily in the West.

Aldi will pick and choose the Winn-Dixie sites they want and liquidate the rest. This will become a model for their future expansion goals (they want to be the #3 overall grocer in the US) and they will make deals to acquire at least two more regional chains with same plan to convert good sites and liquidate the others. The success of Aldi's Winn-Dixie conversion/liquidation emerges as the #1 threat to conventional grocery chains, discounters like Walmart/Target, and the Wholesale clubs.

Rite Aid is a mystery because there should be no question of survival with their bankruptcy plan... But their landlords might be the unexpected stumbling block as years of apparent bad relationships come home to roost. The truth is there should be zero reason to believe they will close down, but if they don't do something to appease their landlords they could easily reach a point of no return with too many closures, at which the acquiring banks try to back out of the deal and force a liquidation. Of all my predictions this is the least likely to come true, but I no longer believe I can rule out a closure of the chain. If they do close it will be a textbook case of "finding a way to lose."

Target will announce another large wave of closures in urban markets due to shrink, which will include nearly all remaining small format stores, and announce with a handful of exceptions that they're abandoning small stores outside of the few successful locations in college areas which will rebrand as Target Campus. Target will commit to their new XL omnichannel format store with 150K footprint and promise shareholders they will have 1000 of them in the next ten years through new store growth, expansions, remodels, and relocations. They will also quietly develop a "larger small format" store at 50K Sq ft. that is food and pharmacy focused with a partially full service perimeter similar to the various tests underway at Super locations. These will get actual branding as well, Target Grocery.

Amazon will end all their retail experiments and put all of WFM and Fresh on the block to be sold; multiple private equity buyers will acquire them. Amazon will also change CEOs and refocus on core business only to restore their deteriorating reputation.

Costco will announce a significant expansion of US store openings to occur over the next 5 years as the membership warehouse business continues to do very well. They will raise the ceiling and state that their eventual goal for US stores is raised to 1,000 units and 100 business centers.

Walmart lays groundwork for a split of Sam's Club into a separate business by 2030 which will include an IPO, with store expansion accelerated to add at least 100 locations plus build out a full HQ and multiple distribution centers by the split.

Walgreens and Boots split in a prepackaged bankruptcy deal that includes a private equity acquisition of the US business; thousands of store closures result.

GoPuff goes out of business and takes down BevMo with them as first major liquidation of the year.

Private equity continues to acquire perfectly good retailers with the intention to destroy them through expense slashing and questionable practices. PetSmart is first major PE acquisition of the year as Apollo makes a deal to buy the shares they don't already own.

The surprise growth story of the year will be the resurgence of Barnes & Noble who will expand their store growth initiatives amongst an abundance of availability of affordable retail whitespace.

Somehow, Sears fails to go out of business by the end of the year. Again.

[retailfanmitchell019]

Anyone want to make some wild (or not so wild) predictions for 2024? Will Kroger and Albertsons marry? Will Winn Dixie's actually become Aldi? Is Rite Aid a goner?

I think the Kroger-Albertsons deal falls through as the necessary divestitures in the PNW specifically push them past the 650 mark and Kroger pulls out due to shareholders push back (because at that point they could build an entirely new chain the size of Albertsons with 2000+ brand new stores for less!).

Albertsons will still wind up in multiple sale transactions by end of 2024, possibly including a sale of just the Northeast to Kroger. Albertsons sells underperforming divisions like Texas and others, becoming a leaner and more profitable enterprise primarily in the West.

My predictions for 2024:

Assuming the Kroger merger fails, I’d expect Albertsons will be like this by January 1, 2025: draw a line west of Denver, and every division east of that line (except for the crown Jewel) is sold off to Kroger (East Coast assets) or another buyer. I’d think the Denver and Texas divisions will be sold to buyers like C&S and AWG. Perhaps Aldi will buy the Texas assets, being non-union.
I also think Albertsons will phase out the Vons name, rebranding that to Albertsons (except for stores in affluent enough areas of SoCal, which will be Pavilions). The Albertsons name in OR/WA (except for Southern Oregon/Eugene area, and some holdouts in WA like Clarkston, Wenatchee, etc.) will be phased out in favor of Safeway. The days of having more than one banner per market (with exceptions, such as the high-end banners Haggen and Pavilions) will come to an end at ACI.
One wild card is what banner do you go with in AZ, Albertsons or Safeway? Albertsons is non-union and Safeway is unionized in AZ.

Strong regionals like Publix, Hy-Vee, H-E-B, Meijer, Wegmans will continue to expand.
Publix will probably go into Mississippi, Arkansas, West Tennessee, etc.
I think Hy-Vee should still go to Denver and other Western Plains markets (like Cheyenne, Rapid City, Billings) instead of fighting Publix in the Upland South.
H-E-B will give ACI a lot of competitive pressure as they expand into the D-FW metroplex.
Meijer lays the groundwork to expand into St. Louis, Pittsburgh, Twin Cities, Buffalo.
Wegmans expands further into New England.

WFM goes to an investment group. Amazon sells Fresh to multiple wholesalers (SpartanNash, AWG, UNFI).

[pseudo3d]

Anyone want to make some wild (or not so wild) predictions for 2024? Will Kroger and Albertsons marry? Will Winn Dixie's actually become Aldi? Is Rite Aid a goner?

I think the Kroger-Albertsons deal falls through as the necessary divestitures in the PNW specifically push them past the 650 mark and Kroger pulls out due to shareholders push back (because at that point they could build an entirely new chain the size of Albertsons with 2000+ brand new stores for less!).

Albertsons will still wind up in multiple sale transactions by end of 2024, possibly including a sale of just the Northeast to Kroger. Albertsons sells underperforming divisions like Texas and others, becoming a leaner and more profitable enterprise primarily in the West.

My predictions for 2024:

Assuming the Kroger merger fails, I’d expect Albertsons will be like this by January 1, 2025: draw a line west of Denver, and every division east of that line (except for the crown Jewel) is sold off to Kroger (East Coast assets) or another buyer. I’d think the Denver and Texas divisions will be sold to buyers like C&S and AWG. Perhaps Aldi will buy the Texas assets, being non-union.

Again, why would Albertsons abandon Texas? The state is growing, California isn't. I have no idea why you have it out for the South division that comes with every post.

[BatteryMill]

I feel we'll get another major merger somewhere.

[mbz321]

I'm thinking we might see the bankruptcy and possible liquidation of both Big Lots and JoAnn by the end of 2024.

Other 'uni-purpose' big box chains (Staples, Best Buy, etc.) will continue to trim their fleet.

A big wave of Macy's closures wouldn't be very surprising.

I don't see Costco or Sam's announcing any big expansion plans, they will both continue on with opening a location here and there.

I think Amazon Fresh will be abandoned and I don't see the stores being sold off to anyone. Maybe a few are converted to Whole Foods. (As a side note, I drove past a 'ghost store' in Philadelphia earlier today. At one point, the signs were up and everything, and I noticed today they were all removed).

[ClownLoach]

I'm thinking we might see the bankruptcy and possible liquidation of both Big Lots and JoAnn by the end of 2024.

Other 'uni-purpose' big box chains (Staples, Best Buy, etc.) will continue to trim their fleet.

A big wave of Macy's closures wouldn't be very surprising.

I don't see Costco or Sam's announcing any big expansion plans, they will both continue on with opening a location here and there.

I think Amazon Fresh will be abandoned and I don't see the stores being sold off to anyone. Maybe a few are converted to Whole Foods. (As a side note, I drove past a 'ghost store' in Philadelphia earlier today. At one point, the signs were up and everything, and I noticed today they were all removed).

WFM and Fresh will be sold together so that the liabilities of the leases on dead stores are moved off Amazon books. The Fresh fiasco is going to be what forces the WFM sale. One doesn't go without the other.

JoAnn will follow the exact model of ACMoore and sell to Apollo (via their Michaels subsidiary) in a prepackaged bankruptcy, resulting in most stores closing except new formats or stores that could actually be converted to the new formats.

And I think Hobby Lobby is in a world of hurt that nobody saw coming which may result in their first year ever where closures outnumber openings. Reason? Most of their growth in the 2010s was taking over distressed white space (dead Mervyns, Kmart, Circuit City and other boxes) where they got bargain price 10 year leases. There is more desire for space now (which will get them booted from good space) and many landlords of these properties that haven't become more desirable are moving on and demolishing for residential. The renewals they're facing are probably incredibly expensive and they can't afford them. This might be driving the sudden SKU reduction and downsizing initiative as they prepare to shrink box size.

Macy's doesn't really have a reason to close much more; they're mostly down to A stores and owned real estate.

Best Buy is misunderstood; they're closing very profitable stores at lease end where another secondary location is nearby because of their sheer dominance of the industry. They are sickeningly profitable, their earnings per share are more than double that of Walmart (!!!). They are not comparable to the Staples and ODP situations which are entirely due to excessive debt coming due after decades of overbuilding. There is no trend away from uni-purpose, really don't know what you're seeing there. Look at the explosion of Ulta, Total Wine, etc in the last few years.

Going to disagree on Costco and Sam's. Sam's already announced their big expansion last year, and they will expand further on it with the plan to separate from Walmart which is their ultimate goal. Costco has been stagnant, but remember a new CEO took over today and is expected to "reinvigorate" the company as they're actually threatened by Sam's for the first time pretty much ever.

And I can't understate the fact that the new grocery industry boogeyman is going to become Aldi. Nobody took them seriously before, but their seemingly endless supply of cash and incredible cost controls mean they are going to replace Amazon as the biggest threat to the industry. The Winn-Dixie acquisition and future gutting is going to be their new growth strategy. They will start to pick up smaller chains and repeat the plan. Remember, it doesn't take much for their stores to break even due to their cost model, which means they have all the time in the world to build and wait for customers who inevitably do arrive.

[storewanderer]

What about Dollar General and Family Dollar/Dollar Tree? When will those over expand to a point that their bubble pops?

Let's get a mixing bowl out and come up with some more wild predictions:

Albertsons/Kroger merger falls through. I don't think Kroger will buy any parts of Albertsons in whole (maybe buy a store here and there). The East assets of Albertsons are the worst fit for Kroger, unless it is a fire sale, even then I'd advise them to pass on it.

Then Kroger buys Whole Foods and gets into some kind of a partnership with Amazon, gets a tie in with Prime, etc. There is less overlap between Kroger and Whole Foods than Albertsons and Whole Foods.

What happens to Albertsons? C&S/Softbank buys ALL of Albertsons.

[jamcool]

I consider SoftBank the Japanese version of BlackRock….fingers into everything (they already control Gannett along with other US companies like Fortress)

[veteran+]

Not really gonna make any predictions but....................................whatever happens will have nothing to do with logic or even the right thing to do for "good business".

Hubris, Greed, Rapacious "investors" and the pressure from the clinical idiots at Wall Street will be making the decisions. Most if not all of these decisions will not make any good business sense, long term.

I think we will see a lot more brands disappear or morphed into something unrecognizable.