Grocery Openings Down in 2017: JLL Report
Grocery openings were down nearly 29 percent last year compared to 2016 as brands examined existing footprints and reevaluated company strategies, according to the 2018 U.S Grocery Tracker from Jones Lang LaSalle, a real estate and investment management services firm.
However, several hot areas exist that saw increased new store openings. California led the states with 1.6 million square feet of new space followed by Virginia and North Carolina, with 2.7 million square feet across the two states. Texas remained a hot market, with the addition of 1.2 million square feet of space, but down from the 3 million square feet in 2016.
Successful grocers in 2017 were focused on the shopper experience, offering fresh, healthy and affordable products while elevating brand loyalty through private label products and investing in digital platforms. Organic sales grew in 2017 by 9.8 percent.
In 2018, the report suggests the following trends are ones grocers need to watch.
- Smaller and more focused stores: Smaller footprints have more opportunities in urban locations and in mixed use projects.
- Data driven technology: As shoppers demand more digital integration, retailers have access to unprecedented amounts of data and need to use to tailor the shoppers’ experience by customizing shelf displays, store layouts and available products based on the preference of local shoppers.
- Blockchain: Blockchain has the capability to improve food safety by allowing products to recalled more quickly and improving inventory management.
- Partnerships and consolidations: The acquisitions with the greatest implications will occur between grocers and non-grocery companies that focus on innovation and technology that can build on digital networks, logistics, delivery and customer engagement.
- Rapid checkout: Grocers will continue to roll out programs for rapid checkout technologies.