As the retail market continues to shift, so do the shopping centers. The market is shifting back to where consumers need it to be, by focusing on grocery stores and necessity-based stores. Experts are predicting that experiential-based retailers will see more successes in the near future, and many shopping centers are adapting to these changes by focusing on those that hold both essential and experiential-based retail businesses. Grocery-anchored shopping centers are most definitely, the way to move forward in commercial real estate.
WHAT DO YOU MEAN BY A ‘GROCERY-ANCHORED’ RETAIL CENTER?
Grocery-anchored shopping centers are made up of a grocery store as the main tenant with an assortment of smaller tenants surrounding it. They act as the main 'attraction' of the area and are meant to draw in customers. Groceries are essentials, meaning customers will keep its demand high even during times of rising inflation and interest rates. The customers that visit grocery stores, such as pharmacies and specialty food retailers, can also be potential customers for other stores in the same plaza. This is why such retail centers are at the top of most real estate investors and developers' lists. Very few retail investments offer such high demand and success rate. Many a times, investors are confused between two kinds of retail investments – necessity-based tenants and experiential-based tenants. Both types of retail establishments attract customers, but they do so in different ways. Necessity-based shopping locations offer products and services that consumers need - think grocery stores or gas stations. Experiential-based shops provide an immersive or interactive experience for visitors - think restaurants with menus designed by famous chefs or jewelry boutiques known for the craftsmanship of their designs.
Shopping centers anchored with experiential tenants or traditional retail stores don’t get as much customer traffic, or they don't succeed financially in the same way that grocery-anchored shopping centers do. The main reason behind this is that people go to experiential-based stores when they want a special experience, but the frequency of their visits is lower than for regular supermarkets: according to studies, people visit local grocery stores about 1.5 times per week. As a result, experiential stores have shorter windows of opportunity to earn repeat customers' dollars and higher costs per transaction.
INVESTOR POINT-OF-VIEW
Real estate investors see such retail centers as profitable investments while residents enjoy the benefits that such real estate brings to their cities and towns (increased supply, diverse product selections, increase standards of living and quality of life, etc.) There is a growing debate about the future of physical stores in an ever-growing digital world. Many commentaries have suggested that we’ve entered an era known to as “the death of physical shopping” and “the rise of e-commerce.” While this is true to come extent and applies to certain sectors, it is in most part, not applicable to grocery stores. Grocery stores will continue to be popular regardless of the presence or absence of online grocery markets. U.S. Census Bureau data shows that 97% of grocery sales are still in physical stores. The impact of ecommerce on this space has been largely limited to the most urban locations.
How is crypto and blockchain changing real estate business and money making?
Real Estate Articles / Oct 14, 2022
Cryptocurrency and blockchain technology is changing the real estate business in many ways. Real estate investing has started shifting to a digital and virtual space slowly.
Navigating Challenges in Affordable Housing Finance: Strategies for Developers
Real Estate Articles / Dec 08, 2023
Developers in the affordable housing sector face unprecedented challenges in financing that are primarily revolving around construction-related hurdles.
Everything you need to know about capital gains tax and real estate investment
Real Estate Articles / Apr 01, 2022
Capital gains tax is levied on the profits made when you sell property or sell investments owned by you. Here’s how you can be exempt from taxes along with the top tax tips for investors and property owners.
What REIT Means And How You Can Make Big Bucks With It!
Real Estate Articles / Feb 01, 2022
What if you were told that you could earn regular dividends from your investments without the hassles relating to buying, managing or even financing a property?
Celebrating Juneteenth: A Step Toward Freedom and Equality
Real Estate Articles / Jun 19, 2024
At Tc Global Commercial, we believe in the power of home and community. As we celebrate Juneteenth, we want to take a moment to reflect on its significance and why it holds a special place in our hearts and our history.
The Ultimate List of Real Estate Terms
Real Estate Articles / Feb 25, 2022
We have compiled a list of top real estate words you need to know whether you are a real estate agent or are looking to buy a house or buy a commercial property. This is the real estate lingo you should know.
Revolutionizing Student Housing: Advancements in Development and Design
Real Estate Articles / Jan 17, 2024
Capital Market Challenges and Design Evolution in Student Housing Development: Navigating Financing Hurdles, Innovative Trends, and Future Prospects in 2024
Wealth management tips. How to create wealth?
Real Estate Articles / Jun 08, 2022
We have listed the best ways through which you can make money in a low risk manner. Create wealth using these investment options. It is the easiest way to get rich.
What developers are saying about the 2023 real estate market
Real Estate Articles / Apr 26, 2023
The 2023 market condition,specifically commercial real estate development and construction industry is set for significant growth and innovation. Developers are saying that recession may be mild, and many growth and investment opportunities\'ll arise.
Navigating the Future of Real Estate: Trends in Houston and Beyond
Real Estate Articles / Apr 01, 2024
Exploring Real Estate Trends in Houston: Embracing Online Innovations and Smart Home Features
