25 minute read
Industry News
from CCR Jan 21
AroundtheIndustry
RETAIL
Target Stores
Building on the success of the small-format stores it has rolled out in city centers and on college campuses, Target plans to open about 30 such stores every year. One of the newest small-format sites is planned for Denver’s Lowry neighborhood, using a 30,000-square-foot location originally meant for a Lucky’s Market.
Rite Aid
Rite Aid debuted its “RxEvolution” brand refresh, which features a new logo and other steps designed to position it as a “whole health destination.” The extensive refresh includes a larger role for pharmacists, more emphasis on healthy product options, a revamped digital footprint and redesigned locations in some markets that Rite-Aid is calling its “Stores of the Future.”
American Eagle/Aerie
American Eagle Outfitters will focus on growing its Aerie brand of lingerie, activewear and swimwear, which the company says has the potential to hit $2 billion in revenue by 2023. The retailer will shutter up to 250 of its mostly mall-based namesake stores and grow Aerie from about 350 to as many as 600 stores over the next few years.
Guitar Center
Guitar Center filed for Chapter 11 bankruptcy reorganization with a plan to keep its stores up and running while cutting about $800 million in debt. The company is the largest US retailer of musical instruments, with about 300 namesake stores and upward of 200 Music & Arts locations.
Pet Supplies Plus
Pet Supplies Plus will acquire about 40 former Pet Valu stores across the Northeast, with the goal of keeping a pet retailer in some communities and saving retail jobs.
Kohl’s/Sephora
Sephora will open shops inside 850 Kohl’s stores over the next few years as the beauty retailer’s current partnership with JC Penney winds down. The 10-year partnership gives Kohl’s a high-profile partner in its plan to triple beauty sales, and the planned 2,500-square-foot in-store shops will give Sephora a greater presence outside of malls.
Gap
Gap will shutter 220 namesake and 130 Banana Republic stores over the next few years, while opening up to 40 new Old Navy stores and about 100 Athleta locations.
Dollar General
Dollar General will open a 6,000-square-foot urban concept store in downtown Minneapolis in 2021. The DGX Minneapolis location will feature the retailer’s more upscale format, with grab-and-go food selections, pet products, groceries and toiletries.
Thom Browne
Luxury fashion retailer Thom Browne plans to add 15 locations in 2021. The retailer also has been investing in digital retail this year and a collaboration with Farfetch gave online sales a boost.
RESTAURANTS
Charleys Philly Steaks
GOSH Enterprises wants to add more than 100 units through the end of next year across its three brands: Charleys Philly Steaks, Lennys Grill & Subs and BIBIBOP Asian Grill. Much of the growth will come from Charleys, which already has 50 out-of-mall units and is looking to double that tally.
Torchy’s Tacos
Torchy’s Tacos has completed a new fundraise, bringing in several new investment firms to its ownership group to fuel a rapid expansion that could more than double its unit count by 2024.
Freddy’s Frozen Custard & Steakburgers
Freddy’s Frozen Custard & Steakburgers has signed a franchise agreement with shopping center developer RSolution Holdings to develop 50 new restaurants over the next several years across the Southeast.
In-N-Out Burger
In-N-Out Burger opened its first two restaurants in Colorado, creating a frenzy with fans waiting anywhere from nine to 12 hours to get their hands on the brand’s famous Double Double.
Wingstop
Wingstop is looking to grow from 200 to 3,000 international units as part of its bid to become a top 10 worldwide restaurant brand.
Papa John’s
Papa John’s has unveiled a new 60,000-square-foot headquarters facility in Atlanta that will house about 200 employees working in a variety of departments, including human resources, menu innovation and marketing. The chain also will retain its offices in Louisville, Kentucky and London.
Captain D’s
Captain D’s will debut a new prototype, D’s Express, that will feature drive-thru and pickup options, but no dining room or outdoor seating. Franchisees will open the first Express unit in mid-2021 in the Atlanta market, and plans call for a second location at a later date.
Schnucks Markets
Schnuck Markets is nearly finished revamping two of its St. Louis-area stores, adding more self-checkout stations, a self-service coffee bar and expanded meat and seafood options, among other renovations designed for speed and convenience. One location also is being renamed Schnucks Downtown, shedding its former moniker of Culinaria, A Schnucks Market.
Saladworks/Kroger
Fast-casual restaurant chain Saladworks opened its first location in a Kroger store in Cincinnati, launching a new partnership with the country’s largest grocery chain.
7-Eleven
7-Eleven has opened its second Dallas-area Evolution Store, a concept store designed to let shoppers test new innovations and products. The format, which also has been introduced in San Diego, New York and Washington, DC, features expanded self-serve food and beverage options, touch screens for ordering, and mobile and contactless payment options.
Chipotle Mexican Grill
Less than a year after introducing prototype stores geared for its growing digital business, Chipotle Mexican Grill has created a new format store fueled by the brand’s soaring digital business: Chipotle Digital Kitchen.
HOSPITALITY
Kimpton Hotels & Restaurants
Kimpton Hotels & Restaurants has transformed a downtown Dallas landmark into The Pittman Hotel, named for the building’s original architect, William Pittman. The 1916 structure has been restored and updated with a new tower.
Residence Inn by Marriott
First Hospitality has opened the 122-key Residence Inn by Marriott Columbus Airport. The property is the first extended stay hotel at John Glenn Columbus International Airport, which also acted as partner for the development together with Rockbridge Capital.
Esme Miami Beach
The boutique hotel Esmé Miami Beach is adding three new dining and drinking venues, and one of them is a rooftop bar. The 145-room hotel on Washington Avenue in Miami Beach, which is scheduled to open in March 2021, also will open two other lounges serving food options with a Spanish flair.
Braniff International
The once trendsetting and long defunct Braniff International Airways will see new life in a project in its hometown of Dallas that includes a boutique hotel. The iconic airline joins TWA and Pan Am in a repurposing trend capitalizing on nostalgia for flying’s glamour days.
Walt Disney World Swan Reserve
Walt Disney World Swan and Dolphin Resort in Orlando, Florida has released images of its upcoming Swan Reserve hotel, set to debut in summer 2021. The 14-story hotel will include 349 rooms, a pool, a grab-and-go market, a restaurant and bar, a health club and a lobby lounge.
Hyatt Hotels
A 350,000-square-foot building to house two Hyatt-branded hotels marks a first for the company. Satya has begun work on the project in the Texas Medical Center neighborhood of Houston, and the hotels could open in 2022.
Hilton Garden Inn
Work on the new Hilton Garden Inn Snowdonia and Wave Garden Spa at Adventure Parc Snowdonia in Dolgarrog, Wales, UK, is on track to be completed in January. The 106-bedroom hotel will open to the public March 26 and feature a large indoor adventure site, an inland wave pool, climbing facilities and outdoor ziplines.
Marriott International
Marriott International plans to open approximately 100 hotels in the Asia-Pacific region, with highlights including the debut of the Luxury Collection in Australia and the W brand in Japan. China will become the first country in the region to host all Marriott’s luxury brands with the spring arrival of the Ritz-Carlton Reserve Jiuzhaigo.
It’s a tech world after all
How innovation continues to drive the restaurant sector
This past year has been unprecedented for a number of reasons, thanks to a raging pandemic and the continual spate of technology driving opportunities. Driven in large part by competitive threats and significant changes in consumer shopping patterns, we are witnessing the early stages of a fundamental transformation of the role of brick and mortar stores. According to Rakuten Ready’s “2020 Key Trends” report, the next great innovations from merchants over the next 10 years will be characterized by a notion it calls “bytes driving bricks,” where strategic brick and mortar transformation will be made with digital innovation and customer experiences as the primary catalysts. Take the digital revolution pacing new formats like Taco Bell’s “Go Mobile” design and other quickserve chains. In addition, “Burger King of Tomorrow” concept similarly imagines smaller restaurants, more drive-thru lanes and increased implementation of technology. Both new formats are intended to push customers to order their food ahead of time and keep drive-thru lines short. Also, last year, Chipotlanes introduced the mobile-only drive-thru lanes, “Chipotlanes.” Arising out of the omnipresence of mobile technology and to satisfy the rise in consumer expectations of a faster, more seamless order for pickup experience, this year should be one to remember for restaurant design and concepting.
Why curbside and in-store pickup must be a priority
A look at activities consumers tried for the first time during the COVID-19 shutdown:
Used curbside or contactless pickup for an online order
Used curbside or contactless pickup for an online order
Bought essential items (groceries, toilet paper, etc.) online
Bought nonessential items (clothing, beauty products, etc.) online
Used in-store pickup for an online order
Used a new delivery vendor (ex: Instacart, Postmates, Grubhub, etc.)
Ordered from a new app
None of these
Used my mobile phone to pay for items in a brick and mortar store (ex: Apple Pay, Google Pay, Venmo, etc.)
I bought essential items in a brick-and-mortar store that I hadn’t shopped in before
I bought nonessential items from a brick-and-mortar store that I hadn’t shopped in before
Used video chat to speak with a store associate
Other (please specify)
They said it
— Rebekah Kondrat, founder of consultancy Kondrat Retail, on retailers like Macy’s, Sephora, Foot Locker that are planning off-mall footprints
“While I had a good career at Lidl, I also wanted a more entrepreneurial role. So when Save A Lot was purchased, I was offered the chance to lead it, and I really didn’t hesitate to say ‘yes.’ It’s a discount grocer of scale. There aren’t too many of those in the world, outside Lidl or its competitor. Aldi. And there was lots to do here.”
— Save A Lot President & CEO Kenneth McGrath on why he took on the grocer’s turnaround challenge
We know these communities. These are some of our business partners, and in some instances, they may even be a small supplier to Starbucks. And so when you think about that, and you can’t help but have empathy for them, you want them to thrive as well, but also we understand what they’re going through.
— Starbucks COO Roz Brewer on the emphasis behind the brand’s $100 million pledge to help small businesses and Black communities
EONTM MODEL EL3
Three Phase Centralized Emergency Lighting Inverter Now Available Up To 55 kW!
LED Fixture / Driver Compatibility
High peak overload capability of 1700% to accommodate inrush current from LED fixtures / drivers while fed from the AC power source, or even while in battery mode.
Full Compliance With NFPA 101
Computer-based, self-testing / self-diagnostic emergency lighting system with data-logging and remote communications via BACnet, MODBUS, and Ethernet.
Compact, Space-Saving Footprint
Physically smaller than comparable three-phase emergency lighting inverter products, without compromising performance or serviceability.
10 kW – 55 kW Download a brochure and specifications today!
UL 924 Listed — Emergency Lighting Equipment C-UL Listed to CSA C22.2 No. 141-10; 141-15
www.controlledpwr.com/EON_1
Put ‘em on your list
5 things that can go wrong in a rollout
Businesses constantly are evolving; innovating and tweaking products, expanding or consolidating facilities, and introducing new store concepts. None of these strategies can happen without performing a rollout. Defined as similar or like project scope implemented across multiple locations in a specified amount of time, rollouts are crucial to achieving those objectives while maintaining desired brand image and quality.
When performing any construction project, there are obvious must-haves essential to that project’s success. These include access to the right skilled labor as well as the ability to complete rollouts on time and within budget. Numerous services providers promise such results on paper. But there are some additional, critical elements that may not be so top of mind and—when not readily available or executed properly— could cause a rollout to fail.
To set yourself up for the highest chance of success, do your due diligence and check these boxes when next vetting a rollout partner:
No. 1: National reach — Many service providers are strong in one or only a few markets. Confirm that potential partners have validated networks of contractors, electricians and other workers with the skill sets necessary to complete your project’s specific requirements. And that their network has been used to establish a solid track record of successful nationwide rollouts.
No. 2: Fast and on time — Just because the network of skilled contractors exists doesn’t mean they are managed well. Ask a potential partner how they approach each project. Explore whether a sense of urgency and desire to do right by clients is ingrained in their culture. Ask about their experience with creating efficiencies to meet aggressive timelines such as eliminating unnecessary tasks and centralizing project management. The goal is to confirm they are structured to move quickly and effectively.
No. 3: Delivers on budget — Coming in on budget generally is a key performance indicator (KPI) for construction projects. Ask about the partner’s on-budget track record. How do they ensure this? General contractors (GCs) may come in with less expensive bids at the onset compared to larger providers. But larger providers can often move faster and will likely have less change orders over time whereas GCs may generate more, which can be collectively expensive and may quickly bring the project over budget.
No. 4: Proactive and transparent
communication — You should not have to chase down a partner for project status information. Ask about their processes for communicating proactively. Look for centralized account management structures versus distributed ones to streamline communications through a single point of contact. Develop KPIs together and break them down—deadlines, timelines, key milestones, etc. How will they meet each one? How will they keep you informed on progress? Make sure they offer a smooth and transparent way to report back to you regularly as well as on-demand should you need it.
No. 5: Supporting Technologies — Many technical solutions exist today that can offer more holistic, simpler project oversight. Spend time researching whether they can integrate with your internal work order management system, are familiar with your system, or offer their own. Look for partners who deploy advanced technological resources such as 360-degree virtual surveys—which can be customized to collect useful information such as accurate site measurements and dynamic photos as well as generate AsBuilt drawings. Some service providers excel at integrating these solutions into their day-to-day tactics, making your job exponentially easier.
Reviewing examples and budgets of executed rollouts is just the tip of the iceberg when interviewing partners. The truly successful projects occur when you take the time to dig deeper to clearly identify the strategies, techniques, and mindsets behind those examples.
Michelle Egan is Senior VP, Business Development & Sales Operations at Powerhouse. Her cross-function responsibilities include oversight of customer project transitions from the sales phase to the execution phase.
By Michelle Egan
(Not) the same old haunts
Report shows what people are avoiding due to pandemic
The data experts at Zenreach have taken an inside look at just who’s doing what (and what they are not) during the pandemic. According to its recent walk-through data report, here’s a snapshot of just how infrequently people are visiting their old haunts during COVID compared to just before it started.
Restaurants
In January 2020, there were 2.4 million visits to restaurants among participating locations. That number in December 2020 was just 706,000. Nightclubs and bars are faring just as badly with visits down nearly 75% from pre-COVID levels.
Hotels
Visits are down roughly two thirds, while visits to bowling alleys are down nearly 75%.
Retail
Retail establishments are faring a bit better, as they are only down 1/3 from pre-COVID levels.
The numbers game 30 16
The percent of foot traffic at malls in October 2019, according to data from Placer.ai, marking the best reading since February. That number worsened in November before rebounding in December, when foot traffic was off 32.4% on a year-over-year basis. The percentage that drive-thru lanes have increased around the country during the pandemic, according to data from Revenue Management Solutions. Before the pandemic, drive-thrus generated 65% of quickserve orders.
1.6
The number, in billions, that a new transportation plan will pump into the Nashville, Tennessee Infrastructure, including expanded bus service. City officials sought extensive input for the plan, which would introduce improvement within a half-mile of more than 90% of residents and workplaces.
Deep reflections
How COVID complicated the jobsite
As the world navigates COVID-19, workers around the country are adapting to numerous new policies and procedures on the jobsite to maintain a safe environment. But how are these new standards impacting our productivity long-term?
New Horizons Foundation, a member foundation and the premier research arm of the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), created the New Horizons Foundation COVID-19 Task Force to pursue the answer. New Horizons paralleled research efforts with Electri, the research arm of the National Electrical Contractors Association (NECA), to leverage strength in numbers. The resulting report quantifies the negative impacts of a pandemic on construction productivity and the associated lost time in mitigation. Keeping members safe on the job was just as important as advising contractors on how to recover from the financial impacts of COVID-19 and maintain a healthy balance sheet. More than just a hard hat
Walking onto a working jobsite looks much different now than it did pre-pandemic. Many workers are becoming accustomed to mandatory temperature checks, medical screenings upon arrival, constant disinfection of tools and equipment, personal protective equipment management, frequent handwashing and socially distant lunch hours. Additional administrative paperwork and safety training sessions also have become common practices on the jobsite. There are two things these COVID-19 mitigation requirements have in common. First, they keep workers safe. Second, they take time. How much time? About 8.7% of total working hours. This translates to 85-plus minutes of lost productivity per day, per employee, or more than seven hours a week. > 32% of this lost time is spent cleaning and disinfecting equipment > 26% is spent on safety and training procedures > 24% is spent on enforced distancing and access rules > 18% is spent on administration work
By Tom Martin & Guy Gast
More than mitigation
Beyond the safety-related protocols that drive the mitigation expense, contractors are losing time in direct labor production. Social distancing, staggered starts and new work methods (like extra scissor lifts and reduced crew mobility due to physical distance policies) all consume productive labor hours. This, coupled with additional costs and resources needed to sufficiently supply personal protective equipment to comply with safety requirements, has taken its toll on finances across the industry. By comparing productivity pre- and post-pandemic, the report indicated an overall 9.2% average productivity impact for sheet metal, HVAC and mechanical contractors. When added to the 8.7% lost productivity, that’s a combined productivity impact of 17.9%. For specialty contractors, a loss of 10% labor productivity often results in a 100% loss in project profitability. This means contractors are losing an average of over 7% on projects, posing a very real threat to the success of a business.
The battle against productivity loss
The financial impact of productivity losses can take three to six months to show up in project financial forecasts and even longer to show up on the balance sheet. Because of this, it is essential that contractors are informed about implications from the pandemic. Constantly checking to ensure labor productivity goals are met and monitoring the time and money spent on mitigation will allow contractors to identify the negative impacts early. Customers
deserve and need timely notice of a possible impact on their bottom line. Quantifying the pandemic impact in the research was an important first step to helping contractors manage projects and finances moving forward. This is the new normal for productivity on the production and installation side of the commercial construction industry. Companies will be expected to account for mitigation expenses in conversations with customers. More important, customers will expect future bids to reflect anticipated costs—and we can expect discussions on recovery of lost production and COVID-19 risk will be more difficult. For example, the cost for COVID-19-related personal protective equipment at The Waldinger Corporation has risen by $0.20 per man hour and that must be reflected in bids. Contractors can estimate ranges of potential impacts of COVID-19-related mitigation and production losses with the help of the Pandemic Change Order Calculator, a tool created in tandem with this study.
An optimistic outlook
Until now, no data-centric resource existed to quantify the financial impacts of a pandemic on construction productivity. Our study harvested data from a wide assortment of companies, geographies and project types, totaling over 20,000 labor hours, to address both mitigation procedures and productivity to give contractors the tools they need to succeed when meeting with customers.
Fortunately, workers now are developing confidence in the workplace again. In the last month of the study, the data improved with a slight decrease in the percent of total required weekly mitigation hours. In other words, COVID-19-related safety procedures that once seemed foreign are becoming routine and streamlined, thus reducing the productivity impact. In some sense, we hope this data reflects confidence that contractors are doing all they can to keep workers safe. We are hopeful for how this report can be used for future planning as we continue to prioritize our members’ health and safety and navigate this new reality. CCR
Tom Martin is Chair of the New Horizons Foundation COVID-19 Productivity Task Force and president of T.H. Martin Inc., a full-service mechanical contractor in Cleveland. Guy Gast is Chair of the New Horizons Foundation and a member of its COVID-19 Productivity Task Force. He also is President of The Waldinger Corporation – Iowa Division, a full-service mechanical, electrical and sheet metal contractor for commercial, institutional and industrial facilities in Des Moines.
The Lost Art of Scheduling
Why every contractor aspires to the premise (and where it breaks down) By Bob Lemke
As our world has evolved, we have learned new skills and abandoned others. In centuries past, our ancestors likely knew how to trap their own food, make their own soap and sew their own clothes. While those skills still exist today in some form or another, fewer people know how to do them. And even fewer know how to do them well.
One day, maybe not far into the future, those skills will be completely lost, either because they are no longer necessary or because the tradespeople will have left this world without passing along their knowledge. When it comes to commercial construction, schedules that are both accurate and detailed are critical to successfully completing a project. Adolfson & Peterson Construction (AP) realizes that scheduling is a skill that has been lost in our industry, and we’re taking steps to ensure the art of scheduling does not disappear forever. Magic words: On-schedule and on-budget
For construction projects, bragging rights go to those who can claim they have completed a project on schedule and on budget. It is a goal every general contractor aspires to, but one that’s easier said than done. Schedules provide a path to successful project completion. Without a schedule, those involved in the project have no roadmap to guide them to their destination. A schedule is a tool that can be used to keep a project on track and on budget, as well as get a project back on track when and if problems arise (and they always do). Schedules also provide transparency into the process and the work required to accomplish specific tasks and to complete the entire project. Without a schedule, everyone involved in the project is operating in a vacuum—aware only of the role they play—and lacking a greater understanding of the bigger picture. Finally, schedules act as a communication tool, keeping all stakeholders in the loop, on the same page, and working toward the same goals. They also ensure accountability when they clearly detail who is responsible for what tasks. And, perhaps most important, they establish trust between client and contractor.
All schedules are not created equal
Scheduling is difficult. Those who excel at scheduling know it requires more than just plugging numbers into an Excel spreadsheet, Microsoft Project or Smartsheet. The best schedules outline critical path tasks, a sequence of events and/or tasks that are linked together and represent the project timeline from start to finish. A well-developed schedule also details other tasks that must be accomplished by certain dates (milestones) and specifies the sequence of events (sequencing). All too often, the quality of the schedule is not apparent until milestones are missed, regular tasks prevent the completion of critical path tasks, and sequences are disrupted.
An ineffective schedule lacks detail, sets unreasonable milestones, miscalculates production rates, and ignores critical path tasks and other tasks. The consequences of an inaccurate schedule can be significant. In essence, relationships are at risk when a general contractor cannot deliver a project by a predetermined deadline and within budget. However, what’s even more important—and what we should be focusing on— is what we stand to gain from an effective schedule. When a project stays and finishes on schedule, everybody on the project team benefits, both financially and operationally.
An industry-wide problem
Historically, schedules were developed by general contractors with their boots on the ground. Why? Because they knew the production rates and had the historical data necessary to run schedule-driven projects. But as the industry changed and general contractors focused more on managing subcontractors, scheduling took a back seat. Today, ineffective scheduling is an industry-wide problem. General contractors often focus too much on cost reports rather than data borne from years of field experience. Industry players have tried to correct courses with in-house schedulers who produce all the project schedules without ever visiting the work site. Yet, this has not solved the problem. It just results in projects being delayed by bad information, which in turn makes it nearly impossible to get back on track. The industry needs schedulers who have both a 30,000-foot view and their feet firmly planted on the rebar, because that’s the only way to truly visualize a project’s critical path. A scheduler like this sees a construction project like a line of dominos, standing them up from Point A to Point B to ensure that when the first domino falls, the rest will follow. If they don’t, the scheduler can stand back, pinpoint what went wrong, and pivot accordingly.
Reclaiming the art of scheduling
On a construction site, a surprise is never a good thing. And more often than not, it results in a financial loss for all parties. That’s why owners hire general contractors for predictability as much as they do to build a structurally sound building. To make delayed projects the exception rather than the rule, general contractors need to rethink scheduling. AP has, and it has gone a long way in setting us apart and pleasing our clients. We have a dedicated scheduling expert who—instead of producing all project schedules—trains our on-site project managers and superintendents to build schedules with the right logic, sequence, and critical path methods. This expert also works alongside our on-site teams to provide ongoing quality control and schedule analysis. It is an approach that ensures the schedule remains on track throughout the course of a project. To reclaim the art of scheduling, we need to understand that it is a proven and strategic tool that helps general contractors create solid plans for their clients. However, as we all know, the unexpected should always be expected. This is where the true art of scheduling really shines. By working a plan with good information, culled directly from the construction site, we can more easily overcome the unexpected. The result? Subcontractors will choose to work with you over other general contractors because they know the schedule will hold. Satisfied clients will spread the word, new business will come your way, and the art of scheduling will be preserved for the next generation. CCR
Bob Lemke is VP of Operations for Adolfson and Peterson (AP), a family-owned company that is consistently ranked among the top construction managers and general contractors in the nation, while maintaining one of the safest records in the industry. He is responsible for strategic planning, risk management and operational decisions, as well as ensuring the satisfaction of all project stakeholders and confirming success at every phase of AP’s projects.
