Repurposed Big Box "Mega Hubs" Are Powering Store Growth For AutoZone
AutoZone plans to more than double the number of its large "Mega Hub" stores through the backfill, repurpose and adaptive reuse of vacant Big Box retail buildings
AutoZone AZO 0.00%↑ operates ~6,000 stores throughout the U.S.
For years its standard real estate prototype was a ~6,500 square foot, freestanding building that carries ~21,000 unique product SKUs.
But 119 of AutoZone’s U.S. locations are "Mega Hubs," or stores that are as large as 50,000 square feet and carry over 100,000 SKUs.
AutoZone CFO Jamere Jackson noted on the Company’s recent earnings call that sales at Mega Hubs are growing at a much faster rate than the rest of its commercial business.
Jackson noted that Mega Hubs “drive a tremendous sales lift inside the store box as well as serve as an expanded assortment source for other stores.”
In other words, Mega Hubs not only generate strong sales but also provide distribution and fulfillment to “satellite” stores in their trade area.
So it is no surprise that the Company is making them a larger part of its new store development program.
8 AutoZone Mega Hubs opened in just the current calendar year — and another 10 are expected to open over the next three months.
AutoZone anticipates that it will ultimately open 300 Mega Hubs to support its existing and future store network.
Most current Mega Hubs — as well as those in development — are located in "2nd generation" real estate that was vacated by Big Box retailers.
In fact nearly a dozen AutoZone Mega Hubs are repurposes of former Toys R Us and Kmart properties.
Other examples of AutoZone Mega Hubs in repurposed Big Box buildings include a recently opened site in a ~50,000 square foot former Giant grocery store in Glen Burnie, MD.
As well as a ~30,000 square foot former furniture store-turned-Mega Hub in Kissimmee, FL.
Several AutoZone Mega Hubs that are currently in development and expected to open later in 2025 are also backfills and repurposes of Big Box space including:
A ~33,000 square foot former Rite Aid in Toledo, OH;
A ~39,000 square foot former grocery store in Willoughby Hills, OH; and
A ~31,000 square foot former fitness center in Mt. Pleasant, WI; and
As for the real estate sources of the next wave of AutoZone Mega Hubs?
Many are likely to be located in sites vacated by bankrupt retailers.
As demonstrated by a lease for a future Mega Hub that AutoZone executed earlier this month:
To occupy a ~28,000 square foot former Bed Bath & Beyond in Dayton, OH.
