Amid a wave of bankruptcies for traditional retailers such as, Bed Bath and Beyond, Party City, and David’s Bridal, grocery-anchored retail has emerged as a “kind of holy grail for real estate investors.” But what differentiates this retail subsector from malls and big box retailers? And what makes grocery-anchored shopping centers so resilient?
Essential retailers, such as grocery stores, face lower competition from e-commerce and typically see strong consumption patterns, particularly during periods of economic uncertainty. This may help to explain why grocery-anchored retail is the only consumer retail subsector to experience positive growth in traffic both pre- and post-pandemic.
Source: “Navigating a Changing Mall: Analyzing Consumer Behavior.” Placer.Ai, 6 Apr. 2023, go.placer.ai/wp/navigating-a-changing-mall-analyzing-consumer-behavior.
In addition, grocery-anchored shopping centers offer consistent and stable traffic throughout the year and are less affected by seasonality and shifting consumer behaviors due to inflation.
Source: “Navigating a Changing Mall: Analyzing Consumer Behavior.” Placer.Ai, 6 Apr. 2023, go.placer.ai/wp/navigating-a-changing-mall-analyzing-consumer-behavior.
Shopping centers greatly benefit from having a grocery store anchor as it improves the health and sustainability for all center tenants. According to recent data from foot traffic analytics platform Placer.ai, grocery stores are responsible for attracting foot traffic and increasing visit frequency for neighboring tenants.
First Colony Center, is a prime example of synergistic shopping in action. Anchored by major grocery chain, Giant, and bordered by Target and Lowes, First Colony Center generates strong consistent cash flow.
The information contained herein is for informational and educational purposes only and is not an offer to sell or a solicitation of any offer to buy any securities. The information contained herein is not intended to and does not constitute investment, legal, or tax advice, or recommendation of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. Any investment in securities involves a high degree of risk and may not be suitable for all investors and you should consult with an expert before making investment decisions. The views or opinions expressed herein represent those of Ignite Investments, LLC (“Ignite”) or its affiliated sponsors at the time of publication. No assurance can be provided that any of the future events referenced herein (including but not limited to projected or estimated returns or performance results) will occur on the terms contemplated herein or at all. While the data contained herein has been prepared from information that Ignite believes to be reliable, Ignite does not warrant the accuracy or completeness of such information. Please see Terms & Conditionsfor full disclosures.
Investments in commercial real estate (CRE) involve significant risks, including market risks, interest rate risks, and liquidity risks, and may not be suitable for all investors.
Securities transactions conducted through Umergence, LLC. Member: FINRA/SIPC. Umergence is not affiliated with any entities identified in this communication.
© 2023 Ignite Investments, LLC
