That trend is the proliferation of grocery stores that have been popping up in shopping malls around the country.It’s no secret that most mall and shopping center landlords have taken an open mindset to ensuring their tenant rolls stay full. Spaces that were at one time strictly the domain of retailers are now being rented out and divvied up to suit all kinds of businesses, including doctor’s offices, daycare centers, and entertainment complexes - to name just a few. There’s also a new trend that’s taking shape, and this one makes a ton of sense for property owners that have been impacted by the exodus of an anchor tenant.
As Fox Business shares, that trend is the proliferation of grocery stores that have been popping up in malls, and we’re not just talking about in some regions of the country either. For example, Wegmans Food Markets will be occupying 194,000 square feet at the Natick Mall in Massachusetts that was formerly occupied by JCPenney, while Kroger will be moving into space previously occupied by Macy’s at the Kingsdale Shopping Center in Upper Arlington, Ohio.
"Consumers, particular millennials, are placing a high priority on experiences while also valuing convenience. As a result, among other things, we see more restaurants, movie theaters, health clubs and grocery stores serve as anchors," according to Tom McGee, chief executive of the International Council of Shopping Centers.
Proactive landlords are actively courting grocery stores to fill the anchor tenant void, and the strategy makes a ton of sense. The majority of today’s newest mixed-use developments feature a grocery store as a prominent piece of the puzzle. Today’s shoppers like the convenience of having all of their shopping need fulfilling within walking distance of each other and retailers and supermarkets in these developments develop somewhat of a symbiotic relationship.
Despite the obvious positives, the reaction from industry executives has been mixed.
"It's a fine line how this strategy is implemented. The addition of a grocery anchor is not necessarily complementary to the other stores, particularly fashion retailers," says Thomas Dobrowski, executive managing director of capital markets at Newmark Grubb Knight Frank.
"Retailers care less about the format of the center than they do about the quality of the location," shared Lisa Kaufman, managing director of LaSalle Investment Management Securities.
We’ll have to wait and see exactly how much traction this trend gains, but it’s another encouraging sign that proactive landlords remain ahead of the curve regarding keeping their properties full.
10 MARCH 2017, USA