Physical Retail Is Back, But Site Selection Has Changed

There is a prevailing narrative in the market that physical retail is dying. The data does not support that story, at least not for the retailers that matter. What we are actually seeing right now is a bifurcation: Weaker concepts are shedding space while disciplined, well-capitalized operators are moving aggressively into brick-and-mortar expansion. For anyone involved in commercial real estate, retail site selection strategy, or occupier advisory, this is worth close attention.

The market is creating a window. Bankruptcies from Joann Fabrics, Big Lots, and others have freed up thousands of lease positions across the country. Smart retailers are not waiting for conditions to normalize. They are acquiring space at favorable terms and locking in locations ahead of the next cycle. The result is a strategic reshuffling of the retail real estate landscape that will have long-term implications for landlords, developers, and site selection advisors alike.

Below is a cross-section of what major retailers are executing right now, and what it signals for location strategy and real estate advisory in the months ahead.

Value and Off-Price Are Leading the Charge

Dollar General is perhaps the clearest signal in the market. The company reaffirmed plans to open approximately 575 new U.S. stores in fiscal year 2025, followed by roughly 450 more in fiscal year 2026—more than 1,000 new locations over a two-year span. This is not speculative growth; it is a deliberate bet on the durability of value-driven consumer behavior, particularly in suburban and rural markets that large-format retail has historically underserved. From a retail location analytics standpoint, Dollar General’s site selection model is among the most data-intensive in the industry, driven by demographic density, drive-time analysis, and income segmentation.

Ross Stores is making a comparable commitment. After opening 90 new locations in fiscal 2025—including first entries into Connecticut, the New York metro area, and Puerto Rico—Ross is targeting 110 new stores in 2026, representing roughly 5% portfolio growth year over year. The long-range ambition is more telling: Ross sees potential to grow its combined Ross Dress for Less and dd’s DISCOUNTS banners to 3,600 total locations, approximately 60% above its current footprint.

Burlington Stores is deploying an opportunistic location strategy, targeting 100 net new openings in 2025 after acquiring 46 former Joann Fabrics leases through bankruptcy proceedings. Ollie’s Bargain Outlet took a similar approach, picking up 63 former Big Lots leases to fuel 75 planned openings in 2026. These are not random growth moves. They are calculated real estate acquisitions timed to market dislocation, executed with the kind of speed that requires an established site selection process and strong broker relationships.

Big Boxes Are Investing in Existing Footprints and Opening New Doors

Target and Best Buy are pursuing parallel strategies: significant investment in existing store remodels alongside selective new store additions. Target is spending approximately $5 billion this year on 30 new store openings and more than 130 remodels, concentrating on new locations in 13 priority markets, including Atlanta, Dallas, Houston, Los Angeles, Miami, and New York City. The store-as-experience model is clearly the operating thesis. These are not just boxes; they are neighborhood fulfillment and brand engagement assets.

Best Buy’s story is particularly noteworthy from a retail real estate advisory perspective. The electronics retailer is set to achieve net domestic store growth for the first time in over a decade. Six new stores are planned for fiscal year 2027, with a small-format model driving incremental revenue in markets where a full-size footprint is not justified. After years of contraction, a return to net growth signals meaningful conviction in physical retail’s role in the omnichannel equation.

Home Depot is adding 12 new U.S. stores in 2026 across eight states, adding more than 1.6 million square feet of retail space, with most new locations concentrated in the southern and western U.S.—consistent with broader population migration and construction activity trends. For a retailer of Home Depot’s scale and maturity, a deliberate 12-store year is not a headline grab; it is disciplined geographic diversification tied to real demand signals.

Specialty Retail Is Finding Its Footing Again

Boot Barn, the Western and work-wear retailer, is one of the more aggressive specialty operators in the current environment. After opening 60 stores in fiscal 2025, the company is targeting 65 to 70 more in fiscal 2026—a 15% increase in pace. Boot Barn now operates in 49 states and sees room to effectively double its current U.S. store count. That level of conviction from a specialty retailer in a category often overlooked by coastal analysts says something real about the durability of regional and rural consumer demand.

Aritzia, the Canadian women’s luxury apparel brand, is executing a deliberate U.S. location strategy with clear Sunbelt and secondary-market intent. The company operated 76 U.S. stores as of its most recent fiscal year-end and has stated a long-range target of 180 to 200 locations. For fiscal 2027, the plan includes first-time market entries in Birmingham, Fort Worth, New Orleans, and St. Louis. CEO Jennifer Wong called real estate expansion the company’s most consistent and predictable growth driver, which is precisely what a disciplined retail site selection process is designed to deliver.

Pacsun is in the early innings of its first physical expansion in nearly two decades. The brand opened nine stores in 2025, signed leases for another nine to open in 2026, and has outlined a plan for 20 to 35 new U.S. stores over a three-year period, citing double-digit foot traffic growth. For a brand that had largely been in retreat mode, the pivot to brick-and-mortar growth is a meaningful strategic shift.

Food and Beverage Stores Are Pushing into New Markets

Wawa, the mid-Atlantic convenience store institution, is launching a $375 million push into Tennessee with 50 stores over 10 years at an estimated $7.5 million per location. The first store will open in Clarksville this month. For a brand as operationally precise as Wawa, a new-market entry of this scale is the result of years of labor market analysis, site scoring, and real estate advisory work. Watching which secondary and tertiary markets Wawa prioritizes will be instructive for other convenience and QSR operators considering similar geographic diversification.

Dutch Bros Coffee is acquiring 29 Phoenix-area drive-thru locations from a franchisee while simultaneously targeting a systemwide count of 2,029 stores by 2029. The chain entered 2026 with 1,177 locations across 25 states and is opening at least 185 new stores this year. The drive-thru-only format with no indoor seating gives Dutch Bros notable flexibility in site selection—including smaller parcels and nontraditional retail positions that standard QSR operators cannot use efficiently.

A Hybrid Model Worth Watching

One of the more strategically interesting moves in the current environment comes from Bob’s Discount Furniture. The company recently debuted a first-of-its-kind hybrid concept in the Cleveland suburb of Glenwillow: a 25,000-plus-square-foot retail store embedded inside a nearly 500,000-square-foot distribution center. The logic is straightforward—keep inventory closer to the customer, reduce line-haul costs, and enable more flexible fulfillment across channels.

If this model proves out, it carries real implications for industrial and retail site selection alike. The convergence of last-mile logistics and physical retail is not a new idea, but executing it under one roof at a meaningful retail scale is a more advanced version of what most operators have attempted. Bob’s plans to open 20 stores in fiscal 2026 and is targeting 500-plus locations by 2035, with its recent $331 million IPO providing the capital runway to execute.

What this Means for Retail Site Selection Strategy

The macro backdrop matters here. Net store openings are projected to increase by roughly 1.4% in 2026, nearly double the pace of 2025, per Telsey Advisory Group. Growth is category-specific—beauty, off-price, discount, and specialty formats are leading, while luxury and traditional department stores continue to see net closures. For site selectors and occupiers, this means competition for quality space in growth markets is tightening, even as overall vacancy remains elevated in weaker assets.

A few observations with direct operational relevance:

The Sunbelt and secondary markets continue to attract outsized attention. From Aritzia’s entry into Fort Worth and Birmingham to Target’s priority market list to Boot Barn’s expansion through the South and West, the geographic thesis is consistent: Population growth follows job and housing formation, and retail follows population. Location strategy that ignores secondary markets in the current environment is leaving real opportunity on the table.

Small-format and hybrid concepts are gaining traction. Best Buy’s small-format model, Dutch Bros’ drive-thru-only footprint, and Bob’s hybrid retail-distribution concept all reflect the same underlying pressure: Reduce real estate cost and operational complexity while preserving customer access. Site selection advisors should expect more operators to bring nontraditional footprint requirements to the market over the next several years.

Opportunistic lease acquisition is creating a durable competitive advantage for well-capitalized retailers. Burlington’s Joann play, and Ollie’s Big Lots acquisition are templates others will replicate. For landlords, this means credit tenants are getting more selective. For real estate advisory teams, staying close to distressed portfolio activity is increasingly part of the core job function.

The Bottom Line

Physical retail is not in decline. Undisciplined, undifferentiated, or overleveraged retail is in decline. The operators expanding right now have strong unit economics, clear format differentiation, and the balance sheet to execute. That combination is allowing them to take advantageous positions in a market where weaker players are surrendering space.

For occupiers, landlords, and retail site selection advisors, the message is clear: Retailers have a strategic window for the next 18 to 24 months. Those who move with conviction with the right format, the right markets, and the right real estate terms will be well-positioned when the cycle tightens. Those who wait for certainty will find the best opportunities already spoken for.

Site Selection Group works with occupiers across retail, industrial, and office sectors to execute a location strategy grounded in labor market data, demographic analysis, and real estate market intelligence. If your organization is evaluating expansion markets or rethinking your physical footprint, we can help you move from analysis to execution.