Shopping Center Business

MAY 2017

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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GROCERY TRENDS 136 • SHOPPING CENTER BUSINESS • May 2017 per trends to stay on top of the market. For most, this means scaling down square footage size and zeroing in on the custom- er's needs in a specific location. If shop- pers are not purchasing many items per visit, grocers don't need to consistently shelve as large a product offering. "It doesn't make sense to have a big superstore in an urban environment. The leasing and construction costs are exor- bitantly high," says Michele Krause, an attorney who specializes in retail and of- fice leasing with Chicago-based Ginsberg Jacobs. "Instead, stores need to have a smaller, more comprehensive selection of what urban consumers want." Krause calls it the "urban renewal" of the Midwest, citing not just Chicago but Detroit, Cleveland and Columbus as markets experiencing the growth of the urban core coinciding with smaller gro- cery concepts. Sheaffer agrees and emphasizes the adaptability now required of grocers in terms of development. "Not only do most retailers want to get into smaller footprints, but urban settings often require them to do so. Retailers that want to be in an urban area are going to have to locate in a mixed-use space more often than not," he says. Kroger recently unveiled plans for a 35 percent reduction in new-store develop- ment, store expansions and relocations in 2017. The Cincinnati-based company's latest 10-K report filed with the Securi- ties and Exchange Commission lists just 55 new projects planned for the year, in comparison to the 100 listed in last year's report. Kroger, along with other compa- nies, plans to focus spending more so on remodels and digital initiatives. Target "flexible format" stores have made a splash across the Midwest, pop- ping up in mixed-use developments. These stores are specially designed for densely populated areas. Last year, Tar- get opened a 20,000-square-foot store in Chicago's Hyde Park, the company's fifth flexible format store in Chicago. The small-scale store occupies the first floor of Vue53 Apartments and offers products catered toward University of Chicago students. The Minneapolis-based retailer has plans for billions of dollars to be invested in repositioning and reimagining Target stores over the next three years. Target will invest heavily in digital efforts and enhancing pick up for online orders. The retailer expects to completely remodel 110 stores across the country and open 30 new small-format stores in urban neigh- borhoods or college campuses this year. By 2019, Target plans to fully renovate 500 more stores nationwide. CLICK AND COLLECT Spending capital on remodeling ex- isting stores is a trend longtime grocery veteran Joe McKeska of Oak Brook, Illi- nois-based Elkhorn Real Estate Partners sees taking precedence over allocating funds for new development. The growth of online shopping is certainly one of the reasons grocers have to rethink and invest in their store formats. "There is now considerable fragmen- tation in terms of the number of differ- ent channels and different retailers that people shop at on a weekly basis," says FREEDOM CROSSING AT FORT BLISS F R E E D O M C R O S S I N G AT F O R T B L I S S . C O M • VISIT US AT BOOTH N3134 Y STREET J O I N U S O N E L P A S O , T E X A S First-ever open-air town center on a U.S. military installation More than 127,000 active & retired military personnel/families Current annual sales on Fort Bliss exceed $275 million Anchors: The Grand Theatre 10, The Exchange & Commissary 461,435 sf GLA with more than 30 restaurants & retailers Dan Frey - 512.682.5507 BLISSFULLY YOURS EXPERIENCE

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