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 140 • SHOPPING CENTER BUSINESS • May 2017 McKeska. "Some of that is due to behav- ioral change, some is driven by new for- mats and concepts, and some is driven by the growth of online retailing." According to the Digitally Engaged Food Shopper Study compiled by the Food Marketing Institute (FMI) and Nielsen, online grocery shopping could reach 20 percent of the food-at-home mar- ket by 2025, encompassing $100 billion in annual consumer sales. The growth is projected to be rapid, as the online sector represents just 2 percent of grocery retail currently. FMI advocates on behalf of the food retail industry while Nielsen studies consumer habits. According to McKeska, this future 20 percent doesn't necessarily encompass just online retailers. He suspects that a majority of these sales will come from traditional grocers expanding their e-com- merce capabilities. For example, Kroger and Walmart are currently the biggest and fastest growing players in "click and col- lect," where shoppers can order groceries online and pick up at the store. Walmart is the most advanced in the omnichannel space, according to McKe- ska. The retailer also owns the majority of its store locations, meaning they can readily add online shopping supplements such as drive-up kiosks without having to get approvals from landlords or other shopping center tenants. Walmart is currently testing a mobile app that allows shoppers to bypass the checkout line by scanning items as they shop. Assuming its success, the app will likely become a standard feature in its stores nationwide, according to JLL. "The grocers that invest in digital and e-commerce technologies are much more likely to be successful as the percentage of online grocery sales grows. If you're investing now to get ahead of the game, then you're more likely to survive long term," says McKeska. For the most part, sources remain opti- mistic for the future of the grocery sector in general. "Grocery is still one of the darling in- vestments for the institutions and even private capital," says Sharko of Marcus & Millichap. "Necessity-based tenants who appear to be doing very healthy in the mar- ketplace — that's where investors want to put their dollars." SCB ©2017 Creative Displays, Inc. STAY CONNECTED! For your free copy of our 28-page, full-color catalog, call toll-free 800-733-9617, local 913-402-9617 or email Commercial-Grade Lighting For Your Commercial Property. The success of prepared foods sales at Whole Foods has enabled the retailer, in part, to launch another chain of stores, called 365 by Whole Foods Market.

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