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11 predictions for retail real estate’s best friend: grocery


Though grocery sales rarely peak high in times of retail growth, they rarely dip in times of retail decline.

That’s why so many retailers want to snuggle up next to supermarkets in shopping centers, says a new report from CBRE.

Grocery-anchored strip or neighborhood centers have suffered fewer vacancies than power centers and malls and currently boast the highest occupancy of all shopping center types nationally, according to CBRE.

That does not mean, however, that things never change in grocery. Here are 11 predictions for grocery retail’s near future from the global real estate firm:

  1. Expect steady, dependable industry growth over the next five years.

  2. Grocery growth will be strongest across non-traditional formants and specialty formats.

  3. Expect significant reinvestment in existing store portfolios to drive competitive advantage.

  4. Consolidation will continue as scale and footprint become increasingly critical to growth.

  5. Online grocery share will reach between 5% and 10% by 2022 and will fundamentally alter but not replace the store.

  6. Grocery e-commerce growth will vary significantly between urban, suburban, and rural locations

  7. Major grocery players will employ more small-format, convenience oriented concepts in urban locations

  8. Prepared meals will gain ground on meal kits and savvy grocers will expand these offerings.

  9. Within the next decade, the check-out line will disappear.

  10. While direct-to-consumer models present a marginal threat over the next five years, grocers should prepare now for longer–term disruption.

  11. Grocery store offerings will expand beyond food over the next 10 years.

“Grocery operators must diversify their offering to best compete, which will lead to varied store formats for different markets, non-traditional merchandise assortments, and an even greater focus on customer convenience,” said Melina Cordero, global head of retail research for CBRE.

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