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Investment strategies

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NEW YORK — Most retailers see online retailing as a critical part of their growth strategy, but that does not mean they can afford to neglect their brick-and-mortar stores. And in recent weeks a number of chains have detailed the sizable investments they plan to make in their physical stores this year.

Dollar General Corp., for example, plans a record number of new store openings in 2016. “We anticipate opening 900 new stores and relocating or remodeling an additional 875 locations in fiscal 2016,” Dollar General chief executive officer Todd Vasos said in a conference call this month. “Our real estate program is the foundation of our growth, with a proven high-return, low-risk model. We are disciplined and focused on financial returns.

“We are very optimistic about our new store outlook for 2016, and our pipeline is full.”

Vasos noted that about 80 of the new stores planned for this year will be in a smaller store format the company has been testing. The stores have just under 6,000 square feet of selling space, making them about 20% smaller than typical Dollar General stores.

“With this smaller format, we have even greater confidence in our real estate strategy for metro sites and smaller, lower household rural sites,” Vasos said.

Supercenter operator Meijer Inc., meanwhile, has revealed that it plans to invest more than $400 million in projects that will include the construction of nine new Meijer supercenters and the remodeling of 32 other outlets.

“We are pleased to continue to grow and invest in the Midwest communities that have supported us for so long,” chief executive officer Hank Meijer said in a statement on Wednesday. “By keeping prices low and ensuring a great shopping environment, we are keeping our promise to our customers that we will provide the best one-stop-shopping solution.”

The remodeling projects will vary by location, the company said, but will include improved store layouts; expanded grocery and health and beauty sections; as well as lighting, heating, refrigeration and parking lot improvements. Meanwhile, the introduction of newer technology during remodeling efforts will result in more energy-efficient stores.

Fry’s Food Stores, a division of Kroger Co., has announced plans to spend $260 million to add seven new stores in Arizona this year. The chain currently operates 119 stores in Arizona.

Six of the planned new stores will be Fry’s Marketplace outlets; the larger-format (averaging 124,000 square feet) stores will include such amenities as adjacent fuel centers, Starbucks coffee shops, Murray’s Cheese Shops, wine and beer tasting, sushi bars, salad bars, soup bars, made-to-order sandwiches, indoor seating, outdoor patios, The Little Clinic walk-in medical clinics, and pharmacy drive-up windows.

Renovation is the focus of Food Lion’s announced capital spending plans. The chain, a division of Delhaize America, has said that it will remodel its 142 stores in the Charlotte, N.C., area this year, at a cost of $215 million.

The project is part of an ongoing rebranding across its nearly 1,100 stores in 10 states. The campaign is dubbed “Easy, Fresh and Affordable. You Can Count on Food Lion Every Day!” and was launched in 2014 with upgrades of 76 stores in the greater Wilmington, N.C., and Greenville, N.C., markets. It continued last year with remodels of 162 stores in the Raleigh, N.C., area.

“We’re proud to have been a part of the greater Charlotte community since 1957, and are excited to bring our newest format to our hometown market,” Food Lion president Meg Ham said in a statement. “As we near our 60th anniversary in this market, we look forward to making significant investments in our stores, our customers, our associates and our communities to offer a new grocery shopping experience.”

The remodels should be completed on a rolling basis between May and October, Food Lion said, and will result in stores that are easier to navigate and feature expanded, relevant assortments.


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