New Seasons Market has actually opened its first Seattle place at 951 N.W. Ballard Way near numerous grocery competitors in a sign of intense competition in the market.
Specialized retailer New Seasons Market opened its first Seattle place within strolling distance of a minimum of a half dozen grocery competitors, including two Safeway stores, a Trader Joe’s, a QFC and a Fred Meyer. PCC Neighborhood Markets will open next year simply four blocks from New Seasons.
It’s a phenomenon playing out throughout the U.S. as grocers increasingly open near one another in largely inhabited neighborhoods, developing brand-new advancement chances in a sector CoStar states has never been more competitive.
“The grocery market today is deeper than it has ever been in the past,” stated Drew Myers, senior real estate analyst at CoStar Portfolio Technique, noting that grocers of all types are more frequently opening within three miles of each other.
Grocers open next to one another to siphon consumers from competitors, stated David J. Livingston, principal of DJL, a grocery store site specialist. The typical U.S. family invests nearly $110 weekly on groceries. That increases to $169 per week in homes with children under 18, according to the Food Marketing Institute.
As a result, the amount of square footage committed to grocers in shopping centers is 20 times what it remained in 1960, Myers stated, as nationwide and local grocers replace “mama and pop” shops. That’s helped make neighborhood retail centers– which are usually anchored by grocers– “maybe the very best entertainer” in the retail market, he stated.
Neighborhood centers have had 8 successive years of leasing growth, inning accordance with CoStar information.
“Definitely there’s more competition today, and grocers aren’t scared to open a store where there are competitors,” he stated.
There’s a growing movement in the grocery industry– similar to that discovered in retail– toward both specialized, high-end stores– think Sprouts or Whole Foods– and discounters such as Dollar General or Piggly Wiggly, possibly squeezing “middle-market” grocers such as Aldi and Kroger, which pull from all earnings sectors, Myers stated.
Livingston forecasted some grocers would close shops. There were 38,571 grocery stores in the United States with a minimum of $2 million in annual sales in 2017, inning accordance with Progressive Grocer Publication.
“It’s a bit over-saturated,” he stated. “Among the very reasons you open next to another shop is to close them down.”