Bisnow: Grocery Stores Remain Solid, But the Amazon Pain is Coming
According to Bisnow:
Among all forms of shopping centers, neighborhood strips anchored by grocery stores are considered a far safer investment than malls or power centers anchored by department stores. But they are beginning to feel similar pressures.
Groceries are part of nearly every family’s weekly routine, and routines are slow to change, Green Street Advisors analyst Vince Tibone said.
“We feel that consumers are very loyal to their local grocery store,” Tibone said. “It would often take a catalyst, either a store moving away or a new grocer opening right down the street from [a consumer] to change habits in general.”
“I would say [grocery-anchored shopping center landlords] are more optimistic now, because it seems like grocers have more of a plan to compete with Amazon," Tibone said. "Last year, no one knew exactly what Amazon would do and how it would evolve. Now, on the ground, you can see that not everyone is immediately getting their groceries delivered.”
Amazon is a "terrifying competitor" in whatever market it decides to enter, Tibone said, but its plans are no longer shrouded in the uncertainty that can paralyze a market. The path forward for grocery stores and their landlords may be a difficult one to tread, but at least it is a clear one now.
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