The 2026 Store Expansion Playbook Is Conversion, Not Construction

The 2026 Expansion Nobody Is Building

The most aggressive retail expansion of 2026 is not being built. It is being inherited.

Ollie's Bargain Outlet, the discount chain, acquired 40 former Big Lots leases from the liquidator Gordon Brothers in late February, part of a run that has brought it to 63 acquired Big Lots locations, according to Bisnow. The company is targeting roughly 75 new store openings, and its CFO framed the bankrupt-competitor spaces as a chance to broaden the footprint and boost returns. Burlington has been doing a version of the same thing. Its most recent quarterly filing carries a line item for the expenses of bankruptcy-acquired leases, a signal that taking over failed retailers' boxes is now a planned part of how it grows.

The backdrop makes the strategy look less like opportunism and more like the main path. Industry forecasters expect store openings to keep rising modestly in 2026, led by off-price, beauty, and discount, even as new retail construction is projected to fall sharply, with Colliers estimating a 37 percent drop and Newmark projecting deliveries at historical lows. When almost nothing new is being built and a wave of retail bankruptcies is releasing second-generation space onto the market, growth flows to whoever can convert an existing box fastest.

Why an Acquired Box Is Not a Prototype Rollout

For a store development team, this shift changes the nature of the work. Opening a store on a prototype site is a repeatable exercise. You bring the same box, the same fixtures, and the same schedule to each new pad, and the whole point of a rollout program is that the fiftieth store runs like the fifth.

An acquired lease is the opposite. Every box is a different size, a different layout, a different mechanical and electrical capacity, and a different landlord work letter. A former Big Lots is not a former Joann, and neither was built to your prototype. The conversion is a custom project every time, which is why it takes so much longer to open. Ollie's told investors it expects around four months of dead rent per acquired location before it can open, against four to five weeks for a typical opening. That gap, weeks stretched into months, is the operational cost of conversion, and it is carried as real dollars. Ollie's put the preopening dead-rent bill at roughly 5 million dollars.

The expensive surprises hide in the box. Whether the existing rooftop units carry the tonnage the new use needs, whether the electrical service is adequate, whether the landlord or the tenant owns a given scope in the work letter. These are the questions that, left unverified before signing, come back as six-figure change orders after the lease is executed and the schedule is already running.

The Portfolio Is Turning Into a Pipeline of Conversions

The larger pattern is that the retail portfolio is quietly turning into a pipeline of one-off conversions. For a decade the operational story in retail development was standardization, stamping the same prototype across the map as fast as capital allowed. The 2026 story is the reverse. Growth is coming through second-generation space, acquired leases, and remodels of boxes that were designed for someone else, because that is where the available square footage and the below-market rents are.

That is a harder portfolio to run than a prototype rollout, and it is harder in a specific way. A rollout program can be managed as many copies of one project. A conversion program is many genuinely different projects that happen to share a brand and a deadline. The schedule, the budget, and the scope diverge at every site, and the thing leadership needs is not a single template applied everywhere but visibility across a set of projects that refuse to be identical.

What Store Development Teams Should Do

None of this argues against the strategy. Below-market rent on a long lease is a real advantage, and taking a competitor's box out of the market has its own value. It does argue for treating conversion as its own discipline rather than a faster version of a ground-up rollout. A few practices separate the teams that convert acquired space cleanly from the ones that discover the cost after signing.

This is the kind of work a retail-native platform like RolloutIQ™ is built for, one that models each store as its own Location, Space, and Project rather than flattening a portfolio of different boxes into identical jobs. Whatever tool a team uses, the discipline is the same. In a year when growth is conversion rather than construction, the operators who win are the ones who treat every inherited box as the custom project it actually is.

• Put construction eyes on the work letter before the lease is signed. Ambiguity over landlord-versus-tenant scope, mechanical capacity, and utility responsibility is where the six-figure post-execution change orders come from.
• Treat every acquired box as its own project with its own schedule and budget, not a prototype stamped onto a new address. The conditions differ at each one, so the plan has to as well.
• Run real diligence per box before committing. Existing HVAC tonnage, electrical service, ADA and code gaps, and environmental findings determine the actual conversion cost far more than the square footage does.
• Budget the carry. Months of dead rent per location, not weeks, is the honest preopening number for a conversion, and it belongs in the pro forma from the start.
• Manage the pipeline at the portfolio level. A program of dissimilar conversions needs one place to see every project's schedule, budget, and open risks side by side, since no single template describes them all.

Sources

Reporting and figures referenced in this article.

• Bisnow - https://www.bisnow.com/national/news/retail/ollies-targeting-75-new-store-openings-in-2025-acquires-40-former-big-lots-locations-128557
• ICSC, 11 Retail Real Estate Predictions for 2026 - https://www.icsc.com/news-and-views/icsc-exchange/11-retail-real-estate-predictions-for-2026
• Chain Store Age, Store Expansion News June update - https://chainstoreage.com/store-expansion-news-june-update-0
• Burlington Stores Inc., Form 8-K (SEC) - https://www.sec.gov/Archives/edgar/data/0001579298/000119312526242954/burl-ex99_1.htm