Kroger Real Estate Development’s Post

Presentation. That’s what amazes me when I visit Buc-ee's. In case you live under a rock, Buc-ee’s is to convenience stores what Home Depot is to hardware. Seeing one from the interstate, you might wonder what in the world they’re doing to attract so many people. First, lower gas prices, because their business plan is to get you inside where they make real money. Walk through the door, and Buc-ee’s is one part carnival, one part restaurant, and one part clean restrooms. It might not sound like much on paper, but once inside, you instantly notice the store is well-lit, the merchandise is brightly colored, and the staff members are ultra-efficient and ultra-friendly. I never understood why people would ever buy a Coca-Cola t-shirt (just to advertise Coke), but the same is going on with the Buc-ee's brand. It’s on hats, t-shirts, mugs, and yes, stuffed beavers. I behoove any business owner to study this model because often, presentation is everything. #BUC-EEs #trustdale #deepthoughts #productpresentation #dalecardwell #merchandising #cocacola #coke

The Palomar Group is ready to help our clients make money after a successful trip to the ICSC conference in Vegas. Here are some key takeaways from the event: Unanchored street retail centers are stealing the spotlight post-Covid, drawing both investors and shoppers alike. With hybrid work schedules becoming the norm, people are flocking to strip centers near their homes more frequently. Traditionally the domain of mom-and-pop owners, this sector is now witnessing a surge of institutional capital infusion. And guess what? Consumers are loving the in-store shopping experience, even as store sizes shrink. Across the US, retail vacancy rates have plummeted to historic lows, while new construction has hit rock bottom. Why? Blame it on skyrocketing construction costs linked to higher capital expenses, wages, and overall construction costs. As long as construction costs stay high, the scarcity of supply will continue to be a key challenge for the retail sector in the foreseeable future. In other news, ALDI USA's acquisition of Southeastern Grocers, including Winn-Dixie and Harvey's, is making waves. With an eye-popping addition of 400 stores, Aldi is sprinting towards its goal of opening 800 new stores by 2028. Expect a phased approach to store conversions, with around 50 stores kicking off the transformation process in late 2024 and the bulk rebranding as Aldi in 2025. But fear not, a significant portion of Winn-Dixie and Harvey's will still fly their current banners. Here's an interesting tidbit: Spaces smaller than 2,500 square feet hogged more than two-thirds of executed leases in Q1 of 2024. And when it comes to the Quick-Service Restaurant (QSR) arena, heavyweights like McDonald's, Chipotle Mexican Grill, Wingstop Restaurants Inc., and Dutch Bros Coffee are on a serious expansion spree this year. Big Box leases (50,000 square feet and up) accounted for less than 1% of all new leases and less than 6% of space. But hey, don't underestimate the biggies like DICK'S Sporting Goods, BJ's Wholesale Club, Bosse Pickleball, and Chicken N Pickle—they're still in the game! What were some insights you had from the conference? Share your thoughts! #ICSC #Retail #WeGetRetailSold #VegasICSC #ICSCVegas

Exciting news for Madison, Alabama! 🎉 The city is set to welcome a new Costco store, promising not only a boost in the local economy but also the convenience of quality shopping right in our backyard. With this expansion comes a significant infrastructure upgrade - the widening of Wall Triana Highway to accommodate the expected increase in traffic. This move highlights a proactive approach by Madison County Commissioners and Costco to ensure a seamless integration into our community, addressing potential challenges head-on. While some residents express concerns about increased traffic, the overall sentiment leans heavily towards optimism. The benefits of job creation, enhanced shopping options, and improved traffic flow are anticipated to far outweigh any downsides. As we prepare to welcome Costco near Clift Farms, let’s embrace this growth opportunity, recognizing it as a testament to our area's appeal and vibrancy. A big thumbs up to everyone involved in bringing this project to life, showcasing the potential for community growth and economic stimulation. Here's to a future of prosperity and convenience for North Alabama! 🛒💼 #MadisonAL #CommunityGrowth #EconomicDevelopment #CostcoExpansion #InfrastructureImprovement https://ayr.app/l/PR2b

✍️ 'The #retailer's biggest rival underlines exactly why the department store is struggling' | Writes Matthew Lynn 'John Lewis & Partners and Marks and Spencer both sell upmarket, high quality #food to the middle classes. They combine that with some reliable, if not terribly exciting #clothes. 'And if you need to pop out for some new tea towels they are the places to go. In lots of ways, Marks & Spencer and John Lewis, with its Waitrose & Partners arm, are very similar #companies, with a broadly similar range of products, pitched at the same market. 'And yet that is where the similarities end. As its brilliant set of results this week confirmed, M&S has turned itself around, while its mid-market rival is still struggling. The blunt truth is becoming increasingly clear to everyone. John Lewis’ #employee ownership model might be lovely in theory, but it is now holding the business back - and the recovery of M&S surely proves that.' Read more here ⬇️ https://lnkd.in/eEPD-HPr

In other parts of the country, new construction Starbuck's inventory has been moving slowly with CAP rates increasing to 6%+... Definitely not the case on this Starbucks in Seattle: ->Within 7 days of marketing we procured 3 offers and went under contract $60k above list price. ->Total transaction time was 67 days from start to finish with the buyer's lender involved. ->With an 8-year flat lease in place we successfully closed for $3M - 5.40% CAP What's the takeaway? The difficulty and cost to develop new retail in the PNW is keeping NNN inventory levels to a minimum. For now, this has insulated these assets from major cap rate and pricing movement, especially when compared to other parts of the country. #pnwretailrealestate #retailrealestate Parker Ksidakis

Please see our latest grocery research report. It's terrific and useful information!

The second life of Foxtrot is set to begin with four Chicago locations.  According to city liquor license applications, the upscale convenience store chain's new ownership plans to reopen stores at 1722 West Division Street in Wicker Park; 1562 North Wells Street in Old Town; 23 West Maple Street in Gold Coast; and 171 North Green Street in Fulton Market. No reopening dates were listed, but the company told the Eater Chicago blog that more information should be available within days. News on Foxtrot's comeback arrives just months after the company abruptly closed down operations alongside the grocer Dom's Kitchen & Market, which joined forces with Foxtrot under the entity Outfox Hospitality in late 2023. The shutdown affected 33 Foxtrot locations and two Dom's grocery stores in the Chicago, Washington, D.C., Dallas and Austin, Texas, markets. Prior to its closure, Foxtrot was named one of the Top 10 Brands to Watch in 2024 by data analytics firm Placer.ai based on its then-steady growth, the merger with Dom's and the company's focus on local brands. | Progressive Grocer https://lnkd.in/gayyxwFf #retail #supermarkets #grocery #convenience #stores

#InTheClubWithGina edition 5 "That's right, woodchuck chuckers, it's Groundhog Day!" One of my favorite holidays of the year is here - will we get six more weeks of new club openings? I think it's a safe bet, given the week's news... Micro insights from the week in club: - Costco has had a busy one, with talks about building a new warehouse in Grand Junction, Colorado, a location it has reportedly "been eyeing...for over 10 years." The club giant is notoriously deliberate about its real estate decisions (they opened their first China location 20 years after receiving a permit to do so), and this addition would bring it even in terms of penetration with Sam's Club. Look at where else Costco and Sam's are close in terms of growth and consider what a potential club race could mean. https://lnkd.in/gADrdj2c - Speaking of China, Costco CFO Richard Galanti indicated the club has "very good potential" in the country. Though the club has not nearly reached its potential there, with new openings swarmed by visitors, consider what impact geopolitical tensions could have down the road. Will Costco eventually be forced to hit pause on a tremendous growth opportunity? https://lnkd.in/g3NfYnaq - Meanwhile, today marked the opening of its first Business Center in Alaska, its 27th overall in the US. Business Centers haven't done as well in the US as they have in Canada, making Alaska a promising market for the model, serving the region's differing needs. Look to the noncontiguous states as possible growth markets for this rare Costco offering. https://lnkd.in/ghFyft79 - Finally, Costco's Amy Becker spoke at a Naturally webinar about what CPGs should bring to the negotiating table, including an understanding of the club model, a comprehensive food safety system, proper packaging for the club shopping experience, and an established business. Know you'll need to demonstrate some success before you approach Costco, and be prepared for the investment specialized packaging and SKUs will take. https://lnkd.in/guNWVFBp #retail #costco #samsclub #retailrealestate

Just Listed! Rare Drive-Thru Firehouse Subs in Ocala, Florida, for $1,124,320 at a 5% cap rate. There is a lot to like about this property: below-market rents ($27.50 vs. $60), a corner lot, a drive-thru, a corporate guarantee (NYSE: QSR), below replacement cost and a great location, among other features. If the tenant stays, your investment will appreciate at 3% annually. If the tenant ever decides to leave, the rents are well below replacement cost, presenting an opportunity to add value. Patrick Nutt and William Wamble recently sold the Chipotle across the street for approximately a 4.5% cap rate at around $3.45 million, and there is much more development happening throughout this major retail corridor. Please let me know if you have any questions about this investment opportunity, market conditions, or any of our upcoming inventory. #QSR #Florida #Sunbelt

“In 1935, A&P opened its first supermarket in Paducah, Kentucky. The goal was to hold expenses to 12% of sales, far below the company-wide average of 17.6%. At first, the goal seemed unattainable, but as the store lowered its prices, sales soared with little increase in operating costs, and the expense ratio began to fall. John Hartford liked what he saw, and he encouraged other experiments to raise volume by lowering prices. These trials showed that if they were located properly, supplied efficiently, and operated on a self-service basis rather than with clerks waiting on shoppers, supermarkets could be highly profitable. In some stores, expense rates fell to less than 11%, more than a third below the company-wide average. In March 1936, John spoke to the division presidents about developing more supermarkets. He was plainly worried about A&P’s competitive position…In too many places, A&P was no longer the low-cost grocer…In 1937 and 1938 combined, more than 4,000 older stores were closed down and 750 supermarkets were opened…Supermarkets allowed A&P to capture economies of scale and the company’s sheer size permitted it to capture those scale economies in a very big way.” Marc Levinson