Series; In our Market, Grocery Stores are a Critical Anchor for Retail

By
Commercial Real Estate Agent with KW Commercial

This is the first of several blogs I plan to write on the relationship of retail tenants and grocery anchor tenants. 

As we look around our local communities, a common theme in retail buildings is For Lease signs in the windows.  We see more retail vacancy today then we did two years ago.  National tenant Hollywood Video recently filed for bankruptcy and their +/- 5,000 SF of leased spaces are now empty.  Starbucks has even made the critical decision and closed several of their non performing stores.   Many mom and pop tenants have either asked their landlords for reduction on their lease payments or have closed their doors all together and vacated their space. We are in a new normal and it is not going away anytime soon. 

The Vancouver market area has an unemployment rate of about 13% which is significantly above the national average.  Less income means fewer dollars to spend on retail items.  When looking at their home budget, many people are asking themselves, "do I want it or do I need it?" An interesting statistic, the USDA's Economic Research Service states that 5.6% percent of our disposable income is spent on food-at-home and that 4% of our disposable income is spent on food away-from-home.  Necessities are on the front burner and most everything else is on the "wish list".  So, is there a solution for the retail market?  Is there something besides location, location , location?  Yes, with an asterisk. 

Groceries are a necessity.  After all, people have to eat.  But not all grocery stores are the same, not all carry the same clout when attracting consumers to their outlet.  I have done a little research to see who the players are in the grocery arena in our market area and came up with some interesting results.  The main nationally ranked players located in Clark County are:

  • Wal-Mart
  • Trader Joes
  • Whole Foods
  • Albertsons
  • Safeway
  • Fred Meyer (Kroger's)
  • Costco
  • WinCo Foods

Most of my numbers and rankings come from either SuperMarket News, or Food Marketing Institute or articles on the grocery sector and each of the grocers listed above are ranked in the top 75 grocers in the US.  According to FMI, grocery stores are defined as a retail store selling a line of dry grocery, canned goods or nonfood items plus some perishable items and a super market is defined as a full-line self-service grocery store generating a sales volume of $2 million or more annually.

In my next blog in this series, I will compare total sales rank, total dollar sales and number of outlets for each on a national level and then view these grocers on our local level. 

 

 

Posted by

Joe Sosky is the Managing Director for KW Commercial in Vancouver, Washington, as well as a developer of NNN leased properties.  Give me a call if you have a client who may want to buy, sell or lease a Commercial or Investment property.  Each month we teach people how to become a Millionare Real Estate Investor.  Our Workshops are held in Downtown Vancouver on the 3rd Tuesday of each month!  Email info@jtsinvesting for more information!

Joe Sosky; Commercial Real Estate Associate Broker and Investment Specialist
KW Commercial
360-816-9652
joe@kwcommercial.com

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Vick The Realtor . 06/02/2010 02:29 PM
Topic:
Real Estate General Information
Location:
Washington Clark County Vancouver
Tags:
grocery anchored retail

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Rainmaker
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Patrick White
Home Driven Realty, Inc - Baldwin, NY
Driven to bring New Yorkers home

Hi Joe,

Thanks for your post in regard to Grocery stores as critical anchors for retail space

May 30, 2010 06:00 AM #1
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Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

You watch the strip malls that had a grocery store and when it went you will see that the rest of the stores usually close within a year. They need the traffic that the grocery stores bring, without it, they can't survive.

May 31, 2010 08:07 AM #2
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Joe Sosky

Commercial Real Estate Broker - (360) 816-9652
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