SPECS store planning, equipment, construction and facilities services
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1 SPECS store planning, equipment, construction and facilities services Store Construction & Outfitting Survey Annual study tracks building costs By Marianne Wilson Retail expansion is edging up, and so is the cost of construction materials and labor, according to Chain Store Age s 2012 Store Construction & Store Outfitting survey, which tracks retail building activity and construction costs. The annual survey, conducted by Leo J. Shapiro & Associates, Chicago, for Chain Store Age, is based on results from retail chains across the country. Along with construction costs, store size and expansion plans, it also examined Company Expansion Average (mean) number of: Stores in operation during New stores opened in New stores plan to open in the coming 12 months Expansion ratio: (New stores planned as a percent of stores currently in operation) 3.6% 3.7% 2.9% 2.0% 4.8% 3.4%
2 the costs of store outfitting systems including lighting, flooring, signage, fixtures, roofing heating, ventilation and air-conditioning (HVAC) and retailers plans with regard to the use of green materials, LEED and Energy Star certification. The retailers that participated in the survey were divided into five categories: convenience stores, supermarkets, home centers, specialty apparel and big box (includes department stores and other largeformat stores). CONSTRUCTION COSTS: For all retailers surveyed, 83.4% said the Quick Stats cost of construction materials was increasing. An overwhelming majority, 71.7%, also said the cost of construction labor was increasing. While retailers across the board were in agreement about the increases, two classes of trade appear to be feeling the increases the most: specialty apparel and big box. A full 100% of the specialty apparel retailers Construction costs for freestanding stores average $48.67 per square foot Fit-out costs for in-line tenants average $40.28 per square foot Cost of construction materials and labor on the rise Eight percent of all retailers pursuing LEED certification Durability and lifecycle costs are top concerns in purchasing store-outfitting equipment surveyed said the cost of construction materials was rising, and 90% of big-box retailers said the same. And 92.3% of specialty apparel retailers and 90% of big-box retailers said labor also was getting more costly. The cost of building stores was divided into two categories: tenant fit-out costs for stores in malls and other type of centers, and building shell construction costs for freestanding locations. In the freestanding category, construction costs (including concrete, structural steel, structured masonry, roof and HVAC, exterior wall assembly, and insulation but excluding interior fit-out) averaged $48.67 per square foot for all retailers surveyed. This compares with $43.48 in last year s study. (While the chains that participate in the survey vary year to year, comparisons can be used to suggest general trends.) By retail sector, specialty apparel retailers had the construction costs (per square foot) Tenant fit-out in a shopping center $40.28 $28.00 $39.30 $30.67 $43.20 $43.92 Building shell in freestanding location $48.67 $49.00 $49.69 $50.25 $55.00 $42.75 Combined average $44.48 $38.50 $44.49 $40.46 $49.10 $43.33 COST OF STORE OUTFITTING SYSTEMS (Construction costs per square foot) Flooring $2.76 $2.89 $2.83 $1.43 $3.44 $2.61 Ceilings $1.51 $2.17 $1.58 $1.14 $1.59 $0.94 Display fixtures $8.09 $6.56 $8.08 $7.93 $7.38 $10.88 Interior lighting $3.21 $4.44 $2.91 $2.16 $3.36 $3.22 Interior signage $0.84 $1.19 $1.12 $0.51 $0.29 $0.98 Roofing $3.20 $4.03 $2.89 $3.29 $2.33 $3.41 HVAC $1.81 $1.90 $1.81 $1.46 $1.72 $2.06 Exterior signage $1.11 $1.79 $0.83 $0.69 $1.38 $0.88
3 SPECS Construction Survey highest building costs, at $55.00 per square foot. (However, the overwhelming majority of stores in this category were built in centers as opposed to freestanding sites.) Home centers averaged $50.25 per square foot, followed by supermarkets at $49.69 per square foot, and convenience stores came in at $49.00 per square foot. Big-box stores had the lowest building shell construction costs, at $42.75 per square foot. The cost of tenant fit-out work, which includes drywall, ceiling, floor, wall finishes and interior construction, but excludes the fixture package, averaged $40.28 per square for all retailers surveyed. This is almost flat with 2011, when tenant fit-out costs averaged $ Big-box stores had the highest costs, at $43.92 per square foot, followed by specialty apparel, at $ Supermarkets averaged $39.30 per square foot, followed by home centers, at $ Convenience stores had the lowest costs, at $28.00 per square foot. EXPANSION: The average number of new stores planned for all participating chains for 2012 was 14 (per chain), up from 11 in the previous year. (All comparisons regarding expansion are based on information collected in this year s survey.) Looking at the individual sectors, specialty apparel retailers are on track to open an average of 29 stores this year, up from 26 last year. Supermarkets and home centers plan to open 10, compared with eight and 10, respectively, in Big-box operators plan to open nine new stores this year, up from seven last year. Convenience stores retailers plan to open eight, up from four last year. The planned expansion ratio (defined as new stores planned as a percent of stores currently in operation) averaged 3.6% for all retailers surveyed. As in past years, specialty retailers continue to outpace the other categories surveyed, with an expansion ratio of 4.8%. OUTFITTING COSTS: Store-outfitting was up in several categories and down in others compared with last year. Display fixtures held onto their longstanding status as the most expensive category, averaging $8.09 per square foot for all retailers surveyed, down from $8.24 per square foot last year. Interior lighting (including lamps, ballasts and fixtures) was the second-most costly class of equipment, averaging $3.21 per square foot, up significantly from last year ($2.54 per square foot). Roofing costs also saw a big bump, averaging $3.20 per square foot, compared with $2.67 last year. Flooring averaged $2.76 per square foot, down from $2.99 last year, Construction cost for HVAC (including ductwork) averaged $1.81 per square foot for all retailers, up from $1.54 last year. Ceilings were flat with last year, at $1.51 per square foot. As in past years, the least expensive categories were exterior signage, which averaged $1.11 per square foot, down from $1.21 last year, and interior signage, which at $0.84 per square foot was up slightly over last year ($0.79 per square foot). Durability ranked as the top concern (50%) in selecting a physical support system for all retailers, followed by lifecycle costs (41.7%). Maintenance concerns and first costs were tied at 33.3%, followed by energy efficiency (23.3%). The survey also provided details on the types of lighting, flooring, ceiling and roofing systems used by retailers. In the lighting category, for example, fluorescent lamps and LEDs are most common, used by 95% and 83% respectively, of all retailers surveyed. In flooring, ceramic tile and vinyl/resilient remain the standards, used by 80% and 70%, respectively, of all retailer surveyed. Polished concrete is another common choice, used by 61%. Costs Of Construction Materials And Labor Construction materials Increasing 83.4% 72.7% 76.5% 77.8% 100.0% 90.0% Decreasing 10.0% 18.2% 5.9% 22.2% 0.0% 10.0% Stayed the same/other 6.6% 9.1% % 0.0% 0.0% 0.0% Construction labor Increasing 71.7% 45.5% 76.5% 44.4% 92.3% 90.0% Decreasing 21.7% 45.5% 11.8% 44.4% 7.7% 10.0% Stayed the same/other 6.6% 9.0% 11.7% 11.2% 0.0% 0.0%
4 (Full survey results, including a breakdown on the types of flooring and other systems used by retailers by segment, are available at chainstoreage. com/resources.) STORE SIZE: In the big-box category, new stores (defined as locations opened during the past 12 months or currently under construction) averaged 74,000 gross sq. ft., compared with an average store size of 150,000 sq. ft. for retailers that did not build in the past year. New supermarkets averaged 49,000 sq. ft., compared with 65,000 sq. ft. for retailers who did not build in the past year. New convenience stores averaged 5,500 sq. ft., versus 6,250 sq. ft. New home centers averaged 57,000 sq. ft., which was consistent with the store size of retailers that had no new construction during the past year. New specialty apparel stores averaged 6,731 sq. ft. GREEN: Retailers interest in building green is an ongoing theme, with 78.3% of all chains reporting they use environmentally friendly materials (versus 76.7% in 2011), with another 10% planning to use them in the future. The use of green materials was strongest in supermarkets, with 100% of surveyed retailers on board, followed by home centers (88.9%) and bigbox stores (80%) and convenience stores (72.7%), Specialty stores, perhaps owing to their in-line emphasis, were the laggards, at 46.2%. As much as retailers are interested in using green materials, they are not yet as interested in LEED (Leadership in Energy and Environmental Design) certification. Eight percent (8.3%) of all retailers surveyed said they were pursuing LEED certification. The results varied widely by class of trade. None of the participating home centers or specialty apparel retailers are seeking LEED certification. But 20% of the big-box retailers are pursuing certification, and 11.8% of the supermarkets are doing the same. EPA s Energy Star certification program, which focuses on energy efficiency, has more advocates. Nearly 17% of all retailers in the survey said they were pursing Energy Star certification. Energy Star certification is most prevalent in the supermarket sector, where 29.4% of retailers are seeking it, and in convenience stores, at 18.2%. mwilson@chainstoreage.com 8 More detailed information and all the charts from the 2012 Store Construction & Outfitting Survey can be found at chainstoreage.com/resources. Top concerns in purchasing Durability 50.0% 54.5% 58.8% 44.4% 38.5% 50.0% Lifecycle costs 41.7% 27.3% 52.9% 33.3% 23.1% 70.0% First costs 33.3% 27.3% 35.3% 33.3% 46.2% 20.0% Maintenance concerns 33.3% 63.6% 17.6% 33.3% 46.2% 10.0% Energy efficiency, when applicable 23.3% 27.3% 29.4% 33.3% 0.0% 30.0% Aesthetics 18.3% 0.0% 5.9% 22.2% 46.2% 20.0% Store Size Size of existing stores: average (mean) gross square feet 36,042 5,682 48,529 51,111 6,154 73,500 Among those who Did not build in past year 48,333 6,250 65,000 57,000 5, , Built any in past year 31,944 5,357 43,462 43,750 6,250 65,000 Stores opened in past 12 months 35,896 5,500 49,000 57,000 6,731 74,000
5 SPECS Construction Survey Types Of Flooring Used Ceramic tile 80.0% 90.9% 100.0% 44.4% 92.3% 50.0% Vinyl or resilient 73.3% 45.5% 100.0% 44.4% 84.6% 70.0% Polished concrete 61.7% 36.4% 76.5% 88.9% 38.5% 70.0% Carpet 53.3% 0.0% 52.9% 44.4% 76.9% 90.0% Wood 40.0% 0.0% 47.1% 33.3% 53.8% 60.0% Stone 16.7% 0.0% 17.6% 22.2% 15.4% 30.0% Bamboo 5.0% 0.0% 5.9% 0.0% 0.0% 20.0% Other 3.3% 9.1% 0.0% 0.0% 7.7% 0.0% Types Of Ceilings Used 2 x 4 ft. acoustical panels 81.7% 81.8% 100.0% 55.6% 76.9% 80.0% Open deck ceilings 78.3% 45.5% 94.1% 88.9% 76.9% 80.0% 2 x 2 ft. acoustical panels 61.7% 54.5% 47.1% 100.0% 53.8% 70.0% Drywall/Plaster 61.7% 36.4% 47.1% 66.7% 92.3% 70.0% Other 3.3% 0.0% 0.0% 0.0% 7.7% 10.0% Types Of Roofing Used Single-Ply roofing system 61.7% 54.5% 88.2% 55.6% 15.4% 90.0% Metal 45.0% 54.5% 70.6% 66.7% 7.7% 20.0% Bur [built-up roof] 33.3% 45.5% 41.2% 33.3% 15.4% 30.0% Asphalt shingles 23.3% 36.4% 23.5% 44.4% 7.7% 10.0% Other 6.7% 9.1% 17.6% 0.0% 0.0% 0.0% None/Leased out 15.0% 0.0% 0.0% 0.0% 69.2% 0.0% Not reporting 1.7% 0.0% 0.0% 0.0% 7.7% 0.0% Types Of Lighting Used Fluorescent 95.0% 72.7% 100.0% 100.0% 100.0% 100.0% LEDs 83.3% 72.7% 100.0% 77.8% 76.9% 80.0% Track and spot lighting 70.0% 54.5% 76.5% 55.6% 92.3% 60.0% Incandescent 50.0% 45.5% 47.1% 66.7% 53.8% 40.0% Day lighting system 46.7% 36.4% 64.7% 66.7% 15.4% 50.0% Metal halide/hid 35.0% 9.1% 41.2% 33.3% 46.2% 40.0% Halogen 30.0% 0.0% 35.3% 33.3% 38.5% 40.0%
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