23 minute read
Industry News
from CCR Issue 8.22
AroundtheIndustry
RETAIL
Target
Target will grow to 95 stores in the greater New York City area with the opening of a 27,000-square-foot store in Manhattan’s SoHo neighborhood. Earlier this year, the retailer opened a location in Times Square and an additional location is slated to open next year in Astoria, Queens.
Oak + Fort
Canada-based fashion and lifestyle retailer Oak + Fort will open at least nine new US stores this year and end 2022 with 13 US locations. The retailer also is focusing on sustainability with the creation of its eco-friendly Oak Refined line and new partnership with fashion resale platform ThredUp.
Karl’s Bait & Tackle
Direct-to-consumer fishing brand Karl’s Bait & Tackle, which launched as a mystery subscription service in 2012, has opened its first brickand-mortar store in Fort Worth, Texas. Karl’s Fishing and Outdoors store launched to create an experiential shopping experience for the growing number of people drawn to the sport of angling.
Lids
Sports apparel retailer Lids will debut a new retail format called Lids University to focus on selling more NCAA merchandise in college towns. Plans call for 11 of the new stores to open this year with more slated to debut in 2023.
Uniqlo
Fast Retailing’s plan for a New York City pop-up to introduce the US to GU, the lower-priced, trendier sibling of fashion retailer Uniqlo, is part retail store and part research project. GU, which already has research centers in London and Tokyo, will use the New York location to learn how it will need to tailor its sizes and styles for American consumers.
Next/Gap
UK fashion retailer Next will open five new in-store Gap branded shops in the coming months, after signing a joint venture last year to bring the Gap name back to Britain. Also, Next’s e-commerce platform now includes the Gap brand, which lets online shoppers pick up purchases and make returns at all of Next’s 450 stores.
Harbor Freight Tools
Harbor Freight Tools opened its newest store in Stone Mountain, Georgia, featuring a full selection of tools and equipment in categories, including automotive, air and power tools, storage, outdoor power equipment, generators, welding supplies, shop equipment, hand tools and much more. The stores are smaller and much easier to shop than the huge home centers. Harbor Freight is one of the top employers for women and one of the country’s top employers for Veterans.
RESTAURANTS
Capriotti’s Sandwich Shop
Capriotti’s Sandwich Shop will test an automated pizza kiosk from Piestro at its Las Vegas flagship, with plans to buy as many as 100 more of the machines, called Piestro Pods, over five years after they become commercially available. The 170-unit sandwich chain anticipates that adding pizza will help grow dinner and late-night sales.
Applebee’s
Applebee’s plans to sell its 69 company owned restaurants in North Carolina and South Carolina, a move that will make the company 100% franchised for the first time since it bought the units in 2018.
Wow Bao
Chicago-based fast-casual and virtual chain Wow Bao has teamed with Automated Retail Technologies to roll out high-tech vending machines designed for nontraditional venues such as hospitals, airports and hotels. The first 50 machines, which prepare refrigerated bao and dumplings to order, were installed in cities in Florida and Georgia. The chain plans to put them in cities throughout the US and Canada in the coming years.
Hart House
Hart House, a plant-based quickserve concept co-created by actor Kevin Hart, is opening its first eatery in Los Angeles. The restaurant will focus on creating food that appeals to vegans and omnivores alike.
Dutch Bros Coffee
Dutch Bros Coffee, which went public for the first time last fall, is optimistic about its development pipeline. The Oregon-based coffee chain is on track to open 130 more by the end of the year.
Serafina Express
New York City-based Italian restaurant operator Serafina Restaurant Group will expand into fast casual with the opening of eight or more Serafina Express units. The first three locations are to open in Manhattan. Each unit will sport technology features, including ordering kiosks and the ability to order from the table via a smartphone app.
AroundtheIndustry
TGI Fridays
TGI Fridays will grow the partnership it began last fall with virtual restaurant company C3 with the rollout of the Krispy Rice sushi concept at select Fridays restaurants in Maryland and California. Fridays also is working with C3 to add the Stonie Bowls and Kumi concepts, and the casual-dining chain will offer C3’s menus for delivery only from 27 locations in seven US states. days-expand-use-virtual-brands
HOSPITALITY
Caesars Entertainment/Eastern Band of Cherokee Indians
Construction is scheduled to kick off this week on a $650 million casino-entertainment center in Danville, Virginia. The project, a joint production of Caesars Entertainment and the Eastern Band of Cherokee Indians, will include 500 hotel rooms, a gaming floor, restaurants and a live-entertainment theater when finished.
Origin Hotel Collection
Charlestowne Hotels plans to expand its Origin Hotel Collection, which recently held its first opening in Austin, Texas. Atlanta, Baton Rouge, Louisiana and Kansas City, Missouri will see units of the boutique line by late 2023.
HeartSong Lodge & Resort
Work on the new HeartSong Lodge & Resort at Dollywood in Pigeon Forge, Tennessee, is scheduled to open in fall 2023. The 302-room resort will feature a 26,000-square-foot convention space, a fourstory atrium and a pool, among other attractions.
Staybridge Suites
After three years of planning and construction, a new $31 million Staybridge Suites hotel now is open in downtown Wilmington. Located on North Market Street in the city’s downtown area, the former office building was transformed into an 11-story hotel featuring 134 suite-style rooms, a lounge, fitness center, shops and a business center.
Nobu Hospitality
Nobu Hospitality unveiled plans to open a 200-key hotel in Tulum, Mexico, which will include a fitness center, a restaurant, event spaces and a spa. The hotel will be the hospitality company’s 30th hotel and its second in Mexico.
Ennismore
Ennismore is launching its luxury hotel, SLS Bahia Beach Residences, in Novo Cancun, Mexico. The luxury hotel, the fourth tower in the complex, is a partnership between Related Group, Inmobilia and U-Calli.
Wyndham Grand
A 364-unit property scheduled to open November in Cancun will take Wyndham Hotels & Resorts’ Wyndham Grand brand to Mexico. The Wyndham Grand Cancun All-Inclusive Resort & Villas joins a Wyndham portfolio of more than 65 hotels and resorts in Mexico, and heralds the chain’s aim at the nation’s all-inclusive market.
GROCERS
Walgreens
California-based Save Mart Cos. is discontinuing pharmacy services at all of its Save Mart and Lucky banners, according to local reports. The grocer plans to transition these services to nearby Walgreens locations.
Albertsons
Albertsons is trial-running a store in Boise, Idaho, that has replaced traditional checkout lanes with all self-checkout stations staffed with assistants. The store also has plans to add carts from vendor Veeve, which will use artificial intelligence (AI) and store cameras to allow shoppers to skip the checkout lanes entirely and check out via card swipes on the carts themselves.
Giant Co.
The Giant Co., a banner of Ahold Delhaize USA, has opened a new store that joins the four locations it has already opened in the Philadelphia area over the past year under the Giant banner.
Kroger
Kroger opened a 40,000-square-foot spoke facility in Nashville that will connect to its Atlanta fulfillment center to expand its reach and provide delivery service across the Southeast. Kroger also opened an 80,000-square-foot facility in Chicago, which will work in conjunction with its fulfillment center in Pleasant Prairie, Wisconsin.
Schnucks Markets
Schnuck Markets has launched Schnucks Express, a conveniencefocused outlet connected to its EatWell natural food store format in Columbia, Missouri. The outlet features its own entrance and is stocked to bring shoppers “a complete grocery experience” by offering staple products and customer favorites from traditional Schnucks supermarkets across the Midwest.
Sprouts Farmers Market
Sprouts Farmers Market is wrapping up construction on its 33rd store in Florida, which will be located in Cape Coral. In addition, the grocer plans to open a new location in one of The Sunshine State’s most well-known master-planned retirement communities, The Villages in Sumter County.
FORE...
Poettker Construction golf tourney raises $52,000 for Big Brothers Big Sisters of Southwestern Illinois
(L-R) Christina Cathcart, BBBSIL Assistant Director of Community Engagement; Jonathon Carroll, Poettker Executive VP and COO; Ryan Poettker, Poettker President; Heather Freed, BBBSIL President and CEO; Kevin Poettker, Poettker VP of Business Development and BBBS Board Member; Kimberly Luitjohan, Poettker Executive VP and COO; Brianna Anderson, BBBSIL Content Marketing and Special Events Manager.
It all happens on the links. Multigenerational, family owned Poettker Construction raised $52,000 in its annual golf classic for Big Brothers Big Sisters of Southwestern Illinois (BBBSIL). The golf classic was held July 29, 2022 at Roland Barkau Memorial Golf Course in Okawville, Illinois. This year, Poettker surpassed its annual contribution goal and expanded the event by offering morning and afternoon golf sessions. Sixty golf teams participated, which helped Poettker exceed its goal of supporting the mentorship organization. Proceeds will support the BBBSIL mission of assisting children in recognizing their potential and building better futures. Since 1980, the organization has helped thousands of youth face adversity and develop mentorship in Clinton, Madison, Monroe and St. Clair counties. Kevin Poettker, Poettker VP of business development and BBBSIL board member, says the annual classic is a welcome opportunity to raise awareness and money in support of Big Brothers Big Sisters mission within the community. “We are extremely appreciative of the continuous generosity and participation of our employees, clients, business partners, and friends.” BBBSIL President and CEO Heather Freed says Poettker's contribution is a huge plus. “Their tremendous contribution and planning initiative will allow us to match over 40 youth in our mentorship program so the children can grow and thrive.”
Revving up demand
The rise of digital ordering technology followed by the pandemic has bolstered the popularity of fast-casual drive-thru restaurants. According to a Technomic survey, 45% of consumers said they now order their fast-casual meals from the car. Chains including Chipotle Mexican Grill, Shake Shack, Fuzzy's Taco Shop and Sweetgreen are meeting that demand with the rollout of redesigned units featuring drive-thru lanes.
All about the pizza
Here a pizza, there a pizza, everywhere a pizza. More restaurant chains are adding pizza dishes to their menus—a byproduct of the pandemic. For example, Red Robin is expanding its partnership with Donato's, Panera is offering a flatbread pizza and Buffalo Wild Wings unveiled a line of pizzas topped by the chain's boneless chicken wings.
The numbers game 202,250 1,215
The number of hotel rooms being built in the second quarter, according to STR. While number seems lower, the volume in the planning stage was a bright exception. The 328,944 rooms under planning marked a 10.4% improvement.
The number of new hotel developments that Accor had under development (212,000 rooms) at the end of June. The hotel group opened 85 hotels during the first half of the year.
19
The number of new properties that have joined Preferred Hotels & Resorts since April 1. The new locations are in several US states, along with properties in Anguilla, France, Italy, Malta, Mexico and Portugal. Among the US additions are Virgin Hotels in Chicago, Dallas Nashville, Tennessee and New Orleans.
Growth is coming, but...
Survey says North American construction growth optimistic with help from a human-centric management approach to digital
Ninety-nine percent of North American capital project and construction professionals are optimistic about their organization’s future. Digital technology is the top driver of growth, but legacy practices are hindering successful transformation
The second annual "Global Capital Projects Outlook" survey by InEight Inc., a global leader in construction project management software, has revealed that the North American construction industry is more optimistic than any other region about growth prospects for the next year. The survey of 300 of the world’s largest capital project owners and contractors across North America, Europe and APAC found that 54% believe digital technologies offer the greatest opportunity for growth in North America. Yet 95% said their experience of change management left room for improvement. North American professionals also were most likely to note that legacy ways of working are hindering digital technology adoption (52% vs 46% globally), indicating outdated workplace cultures and practices are stalling construction digitalization. In further evidence of legacy processes hampering digital modernization, North American firms identified uneven or sporadic implementation (55%), process and data integration issues (54%) and technical and system limitations (49%) as the top frustrations caused by technology upgrades. Comparatively, North American respondents were also most likely to say digital transformation required a complete organizational overhaul with ongoing disruption and the least likely to describe their organization’s level of digital maturity as optimized. Jake Macholtz, CEO, InEight, says record infrastructure investment, growth opportunities for both owners and contractors are on the horizon. "The prospect of leveraging digital technologies is also inspiring optimism. Yet there is an urgent need to update analogue working practices and processes for the digital age to enable a more seamless transition to Construction 4.0 and accelerate success.”
A Human Touch
North American respondents are increasingly concerned about technology supplanting working relationships and skills, highlighting the need for human-centric digitalization. The survey shows that 92% are concerned over the future of digital transformation, with 45% citing reduced in-person communication, increased difficulty in understanding site/project reality (43%), and professional experience and human intuition being replaced by technology (35%). Paradoxically, greater communication (46%) and more automation (46%) were among the greatest benefits that employees hope digital transformation can deliver, indicating that technology is seen as a double-edged sword that could either replace or augment humans depending on how it is implemented.
Creating space
Against a backdrop of inflation, energy price rises, and skills and material shortages, North American contractors report the completion of projects on time and on budget has fallen dramatically from last year (-23% and -26% respectively), now the lowest of all regions. Respondents in North America are most likely to cite unmanaged or unexpected risks from supply chains to skills shortages as the key factors affecting project costs and timelines (63% vs 56% globally). An inability to see current project status and data at a detailed level (54% vs 47% globally) was also reported as a key influence on respondents’ project performance. To download the full report, visit ineight. com/annual-global-capital-projects-report.
Charge it up
Green is the word. Thanks to a partnership with Electrify America, IKEA is installing more than 200 ultra-fast electric vehicle charging stations at 25 stores in 18 states this year. Electrify America also is teaming with retailers like Kroger and Save Mart in hopes to grow to 10,000 individual chargers at 1,800 charging stations across the US and Canada over the next four years.
What they’re saying...
— Ginger Taggart, Vice President of Brand Management for Crowne Plaza, on how hotels are reaping returns on the blending of business and leisure travel “Anyone can sell a plot of land and allow a developer to build but what we’re trying to create is this entire ecosystem where the residential is highly integrated to the existing retail asset.”
— Geoff Mason, Executive VP – Development/ Design/Operating Management with UnibailRodamco-Westfield, on how why Mill Creek is integrating housing into the Westfield Garden State Plaza in Paramus, New Jersey
— JoBeth Prochaska, Senior VP of Weitzman, on H-E-B’s hope to replicate its Houston success in Dallas
Riding the wave
Report shines spotlight on major challenges impacting subcontractors
By Chris Doyle
Since the pandemic began, subcontractors have been forced to overcome one obstacle after another. The pandemic short-circuited the entire economy, with supply chain disruptions affecting the availability and price of crucial materials, and where to find skilled workers to complete jobs.
To get a clear and precise snapshot of the construction industry, Billd conducted its second annual "National Subcontractor Market Report," to evaluate the trends and vital industry information impacting the construction industry.
A Story Told by Industry Pros
A total of 767 construction professionals across a wide range of trades responded to our survey. They provided a clear picture, detailing their business growth plans, the impacts they have felt from market challenges, their relationships with suppliers and their terms and how they would prefer to finance projects. Of the respondents, 51% were subcontractors, 24% were both subcontractors and general contractors, and 24% were only general contractors. All work in commercial construction, 48% do both commercial and residential and over 90% have been in business for over 10 years.
Top 3 Issues
The "2022 National Subcontractor Market Report" asked participants: What do you believe will be the most significant risk to your business in 2022? > 40%, or 307 respondents, said that their number one issue will be the availability of skilled laborers > 30% or 230 respondents said material prices and volatility pose a substantial risk to their business > 16% or 122 respondents said material lead time delays pose a risk to their business
The common denominator among these risks is their ability to be mitigated
with financial capital. Two out of the top three pressing challenges center around material cost and procurement, with the number one issue being the availability of skilled workers to complete projects, in which cost also plays a significant role.
Challenge 1: Skilled Labor Shortages
As the US economy ground to a halt during the pandemic, the nature of work changed across many industries. Working remotely became a new normal, a technology boom facilitated new opportunities for workers, and employee expectations changed. If employers are not able to meet these new expectations, then employees have new options, spurring the so-called Great Resignation. The construction industry was not immune to these challenges. Compounded by an aging workforce and ever-rising demand, the industry is in desperate need of new workers. Our report shows that lack of skilled labor is the clear number one challenge facing the construction industry. Labor shortages in construction have been building for multiple years. While other industries can deal with the labor shortage by raising wages, subcontractors already are dealing with a highly competitive bid environment, which is straining project profitability. Any major increases in labor costs will amplify this issue.
Challenge 2: Materials – Availability and Cost
The second greatest challenge facing subcontractors across the board is procuring the necessary materials to complete projects. Today, higher material prices are crushing subcontractors. How can subcontractors bid on their next project if the price of materials remains so volatile and may cause a project to become unprofitable? Material shortages have created serious problems for subcontractors. Overall, 88% of contractors said volatility and price increases had a negative impact on their business. In addition, nearly 80% of subcontractors said lack of materials and increased lead times have already harmed their business, and 87% of subcontractors fear long lead times will continue to be a challenge. Despite these headwinds, subcontractors remain confident with 71% reporting they planned to grow their business over the next year.
21st Century Solutions for Subcontractors
While subcontractors remain satisfied with their financing and credit options, they feel the pressure of paying for large material and labor costs upfront, disrupting their cash flow.
According to the data, 59% of contractors intend to rely on cash to fund business growth in 2022. However, nearly half stated cash flow remains a significant challenge The "2022 National Subcontractor Market Report" calls to attention a core construction industry fault—a broken payment cycle that continues to put subcontractors behind their counterparts. Subcontractors are the last to receive payment, impacting their ability to bid on potential projects. In this current volatile market, cash on hand is not a reliable source to pay for labor and materials upfront, much less finance a business’s sizable expenses when it comes time to scale operations. Things may begin to change thanks to financing solutions specifically created for subcontractors. These new financing solutions come in the form of 120-day terms, instead of the 30-day industry standard. These longer terms still allow suppliers to be paid upfront, while also providing flexibility to manage other needed purchases and help lock in the best prices with the negotiating leverage of a cash buyer. For labor costs, new, reliable advance financing tools have entered the marketplace. These pay advance options will help subcontractors address rising labor costs in the construction industry, and the severe impact it has on cash flow and overall liquidity of commercial construction projects. They stabilize cash flow and allow subcontractors to continue to grow their business.
As we continue through 2022, subcontractors will be impacted by not only material prices and volatility but be met with continued labor shortages. To give them every opportunity, they will need more tools in their arsenal to help them negotiate the complex, painfully broken payment cycle. Sub-contractors are left to support the $1.4 trillion industry while they are left with limited cash flow solutions. For subcontractors to succeed and thrive through the next market cycles, they will need to be supported by financiers who are specifically created for them, and who provide sufficient credit limits needed to do the best work of their lives. CCR
Christopher Doyle is an entrepreneur and business leader with extensive construction industry experience and a record of launching successful startups. He is co-founder and CEO of Billd, a disruptive payment solution for the construction industry that helps subcontractors grow their businesses with less hassle and risk. Recognizing the cash flow hurdles subcontractors face when purchasing materials, Doyle launched Billd to make traditional Wall Street working capital accessible to business owners in the construction industry.
Mastering the lessons learned
When it comes to supply chain, we’re all in this together
By Colin Billings
Amid the pandemic, some of the biggest lessons we have learned about the supply chain include the fact that there are no isolated incidents. Perhaps no segment makes this more obvious than microprocessors, which, among other things, held up the completion of countless construction projects in recent years (mostly via appliances).
Most news about shortages centered on automobiles, but the number of sectors consuming these products has increased significantly, leaving companies of all types competing for deliverables. How bad has the situation been? Bad enough to gain the attention of government officials, who are now looking at how we can ensure and control those supply chains going forward. In the meantime, there are plenty of Cliff Notes to compile from recent experience.
Better communications
Information has always been a vital part of supply chain activities, but from the earliest days of the pandemic we learned there’s no such thing as over communicating. While in the past you might need to talk to only certain points or individuals, these days including as many as possible allows us to solve problems and set expectations together. The more everyone knows what to expect, the better we can all deliver on promises, while doing our best to avoid domino effects. COVID has also taught us the value of transparency. The sooner we all know a delivery isn’t going to happen, the sooner we can shift to alternative sources. The need for redundancies
Speaking of alternative sources, when it comes to parts and materials, traditionally companies tended to buy from a short list of providers. These days, it is normal to shop numerous providers for any and everything. That’s not to say you shouldn’t value and support long-standing relationships (those have saved many of us more times than we would like to admit) but allowing for some rotation can help to keep product flowing. Those redundancies should happen by design, rather than last-minute desperation.
Hands-on leadership
While some CEOs might be tempted to stay out of supply chain activities, lately a good portion of our weeks are focused on what we need to do to keep supply going. Supply chain has been difficult and at times more than any one person can handle on their own. To avoid impacts to production, an all-hands-on-deck approach is often what’s needed—including from senior leadership.
Blending air and freight
With products that are small and light enough to ship affordably by air, we’ve been lucky in this department. But other companies have found benefits in deploying a mix of air and freight. Chances are, many will continue this practice going forward. When fulfillment slows, those that rely on freight can shift to air, temporarily, to speed delivery. Those changes come at an added expense but can take slack out of the supply chain when necessary.
Signing on the dotted line
When it comes to purchase orders, things have changed drastically, especially when it comes to commitment. In the past, companies could order parts and materials, then cancel a shipment up to 30 days prior to delivery. Now, some suppliers have gone to non-cancellable and nonreturnable formats, in some cases even asking for upfront payment. This shared commitment requires everyone to lock up cash flow, while sticking to orders.
Holding back
The idea of turning away or delaying new customers is a tough pill for any of us to swallow, but companies struggling to meet demand should think twice about expanding their bases. If a supplier is willing to put you on hold, then chances are they’re doing you a favor. When there is not enough product to go around, the last thing any of us wants to announce is that we’re spreading supply even thinner. When will this all come to an end? So far as microchips are concerned, some experts say it could take as much as several years for things to get back to normal. But, if the recent shutdown in Shanghai reminds us of anything, it might be that it’s far too early to return to our old playbooks. We are better served by making a few edits to reflect what we’ve learned from a lingering pandemic. CCR
IT’S THAT SIMPLE
We’re a company with a fresh approach. We are highly skilled and passionate design and construction experts brought together and bonded by mutual trust and respect.
Every member of the PMC team stands ready to deliver, regardless of location, complexity or challenge. We will bring your projects to market with a focus on quality, performance and speed.
Professional Design and Project Management Services for the Retail, Restaurant, Hospitality, Entertainment and the Commercial Markets.
Better. Faster. Smarter
WE’RE HERE FOR YOU
Like any good winning team, a successful effort takes strong teamwork, coordination and clear responsibilities. A combination of artistic, technical, management skills all come into play.
We have taken great care to assemble a team of experts who are perfectly suited to deliver these projects for you. We’re thrilled to go on this journey with you and promise to give your brand undivided attention and focus.
What Can PMC build for you?
CHRIS.LOVE@PMCONSORTIUM.COM 347.392.1188
TOM.DOUGHERTY@PMCONSORTIUM.COM 914.646.1437
