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:
- Trader Joes
- Whole Foods
- Fred Meyer (Kroger's)
- 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.