FEATURE — Grocery Anchor Evolution
Glen Eagle Square | Chadds Ford, PA
The Evolution of the
Grocery Anchor By Merle Brann and Bill Coleman
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etail developers and owners from around the country are increasingly eager to have their shopping destinations anchored by experience-oriented, specialty grocery stores. With their excellent credit-worthiness an added bonus, these stores are now growing in demand throughout the United States. Once an afterthought among retailers, these modern grocery stores are now able to provide shopping centers and other mixed-used properties with a solid traffic driver that has remained resilient even during challenging economic conditions. These stores have been adept at understanding local market tastes and trends – expanding the grocery shopping experience by incorporating conventional retail themes such as entertainment, luxury and casual dining. The past 20 years have ushered in many dramatic changes to the way grocery stores do business. What were once straightforward, no-frill stores people went to on a weekly basis out of necessity have transformed into more frequented destinations, not only for routine shopping, but also a memorable, personalized experience. Whether it’s checking out the oyster bar, tasting new products, or enjoying live entertainment and cooking classes, customers are now able to enjoy a number of amenities that had previously not been available to them. Grocery stores weren’t immune to the financial crisis in 2008. As consumers cut back on all aspects of their budgets, they also spent less money on food shopping.
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According to a recent report by the United States Department of Agriculture (USDA), consumer spending on food dropped by more than 5 percent from 2006 – 2009. However, it is also quite evident that grocery stores were among the sectors that not only recovered quickly, but also rapidly adapted to accommodate an emerging consumer interested in organic food, artisanal baked goods, pre-prepared meals and freshly roasted and sourced coffees and tea. When the economy started to improve, Americans flocked to specialty food chains that provided a higher level of service with more gourmet and specialty options. Hard economic data gives further insight into why grocery anchored shopping centers have become so successful. First, today’s shoppers visit their local grocers on average of around two and a half times per week, making for a weekly return rate most shopping center retailers would envy. They also offer retailers a successful blueprint that has demonstrated a low susceptibility to the always looming downwardoriented business cycle. In turn, this has made them more attractive co-tenants for other retailers, who may conversely be more vulnerable to these cycles and who are seeking to benefit from the grocery’s guaranteed foot traffic. Specialty grocery stores – as well as larger “traditional” grocers – have been quick to fine-tune their offerings according to geography and demographics. At Madison Marquette’s Mercato, a platinum-level mixed-use center in Naples, Florida, a Whole Foods anchor has incorporated an international olive bar selection, expansive wine
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