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Doc-in-the-box brands seeing Long Island demand


By Steve Gillman,
The Shopping Center Group
While no one has a retail crystal ball, drawing upon my 25-plus years of experience on the Island, here’s what I’m thinking will shape up for 2015.

The internet will continue to impact business, eroding growth and volumes. In response, retailers will continue to shrink store footprints and depending on their situation, slow growth, or shut poor performing locations.

We’ve seen this trend before. The office supply stores, banks, and the electronic stores are all dealing with the internet challenge.
Some companies deal with the threat better than others. For example, TD Bank offers longer hours and better service, Staples has figured out how to leverage physical locations to do a great internet business too.

The combination of fast delivery, and the ability to return something bought on the web in a store, creates a seamless shopping experience that makes them at least competitive to Amazon’s customer service.

The additional retail space that typically got gobbled up by those retailers now on the run due to the Internet has created opportunity for restaurants, gyms, medical facilities and that ‘new’ concept that seems to come out of the blue each year (I’ll talk more about that in a moment).

The Mexican segment of fast food, led by Chipotle, remains hot and will continue to be throughout 2015. Fast, casual pizza appears ready to make its move as well, chains like Anthony’s Coal Fired Pizza are having great success and will seize even more opportunity in the New Year.

The increasing growth of the Boomers need for convenient and efficient medical services is fueling the surge in surgical chains and private-equity backed “doc in the box” brands, all of which are looking to do deals for new space in 2015. Pediatric practices are also growing quickly.

One concern for the medical category is the shifting political climate.

Medical growth is driven by insurance reimbursements and that system could change rapidly if Obama Care is dismantled. Also, if reimbursements become more mired in a legislative logjam, the medical community will rethink their growth strategies.

If the reimbursement process is resolved with any sort of certainty, then more locations will crop up all over Long Island.

Everyone wants to be fit these days, and the gyms are now the new supermarket anchors for many suburban shopping centers. Chains like LA Fitness, Blink, Crunch, and Planet Fitness are all on the hunt for good locations. Several new players, like UFC, are rumored to be looking in the market as well.

The “other” new retailer category still remains a mystery for me.

I’m not seeing much of this ‘new’ retailer in the suburbs, but there are hints as to what it might be this year in places like Williamsburg and NOMAD — Sweetgreen, for example, an organic, fast food concept that’s already opened several NYC locations, will at some point, come out to the ‘burbs.’

At this point, all I can say is that something ‘new’ will hit Long Island in late 2015 or early 2016.

Despite reasonable economic growth in 2014, some chains are out of synch with the market and are downsizing. Radio Shack, for example, will close stores, the cupcake business will keep crumbling, yogurt won’t get last licks, and some of the ‘better’ burgers may not have it “their way.”

But for fast food guys like Sonic, Dairy Queen and Chik-Fil-A, new locations will crop up on the Island in 2015; and let
me be clear — McDonalds and Burger King will do little or nothing beyond a face lift or two; perhaps an occasional store will close, too.

The mainstream family restaurant chains like Red Lobster and Olive Garden will continue to struggle as they appear stale relative to newcomers like Bonefish and BJ’s Brewhouse, both of which will add new units next year.

The Bass Pro shop
The Bass Pro shop

The electronics business needs a great new product to re-energize the category, but I’m not sure 4k Ultra High Definition TV is the answer, even if prices drop significantly.

There is little new retail development to speak of, but the new Nassau Coliseum holds great promise for Long Island.

With Bass Pro Shop as a lead anchor and lots of proposed entertainment including movies, bowling, an ice rink and destination restaurants, this could certainly shake up the landscape, but ground won’t break until after the Islander season comes to a close — and given the great start to their year, that might mean summer.

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