CHARACTERISTICS OF GROCERY-ANCHORED SHOPPING CENTERS
There are few things in life as habitual as grocery shopping. In a time when on-demand shopping services, free shipping and other emerging trends are changing the face of retail commercial real estate, grocery stores and supermarkets are still as relevant as ever.
Phillips Edison Grocery Center REIT III invests primarily in grocery-anchored shopping centers, taking full advantage of the stability and demand powered by the supermarket anchor, being necessity-based, and the growth opportunity provided by the national, regional and local small shop tenants. We believe this blend of consistency and opportunity is market resilient and will endure recessions and disruptions.
- Most common purchases are perishable items: milk, bananas, bread
- Avg. customer trips/week = 1.5
- 18,000 avg. total trips per week
- Proximity to home is important
- Most grocery shopping within 4 miles of home
- Most common grocery items not conducive to internet shopping
- Online = approximately 1% of total food sales
- Projected category growth by 2018 represents 1-3% of total food sales
- $650 billion industry
- Employs 3.4 million people in the U.S.
- Grocery sales have proven resilient in recessions (e.g. people eat at home more often vs. dining out)
STABILITY AND GROWTH
- Grocery anchor powers demand
- Retailers want to be near top grocers
- Small shop tenants provide income, diversity and growth
- International Council of Shopping Centers Research and CoStar Realty Information, Inc., June 2016, U.S. Square Footage.
- Food Marketing Institute, Supermarket Facts.
- Business Intelligence Insider.
- Progressive Grocer’s 80th and 83rd Annual Reports.
- USDA, Economic Research Service
THE GROCERY-ANCHORED MODEL
Grocery-anchored properties have a unique advantage in the market. In these properties, the grocery anchor provides reliable income stability, while the small shop tenants drive income growth. The rental income from this diversified tenant base at each center, combined with effective property operations to reduce expenses and generate additional revenue streams, enable us to deliver on our shareholders’ goals.