Overview: The last decade has seen significant changes in grocery shopping options - and in the grocery real estate landscape. The proliferation of dollar stores and their reallocations of floor space toward grocery items have made these value retailers an increasingly popular alternative to traditional grocers. At the other end of the spectrum, wholesale clubs are capturing a greater share of grocery expenditures, due to their pricing advantage on volume purchases, and considerable store growth by home-grown BJ’s.
Other retailers have been diverting food dollars away from traditional supermarkets as well, notably Walmart, which has relocated a significant number of traditional stores to Supercenters, and expanded others. Many Target stores have also added full line grocery departments. Finally, we’ll see an increasing share of grocery dollars allocated toward internet retailers.
Dollar Stores: Dollar store growth was dominated by Dollar Tree. Ten years ago Family Dollar was the category leader - Dollar Tree now operates 693,700 square feet compared to Family Dollar’s 587,500 square feet. Dollar General, a newcomer to the region, is expected to show significant future growth.
Wholesale Clubs: Wholesale clubs include the big three of BJ’s, Costco, and Sam’s Club. Neither Costco nor Sam’s Club has made significant headway in the region, ending the decade with the same store counts with which they began. At the same time, BJ’s has added seven new clubs, and now operates 21 stores. Wholesale club sales growth has been stronger than traditional grocers.
The full Ten-Year Grocery Study includes charts illustrating the relative changes in square footage of grocery retailers, dollar stores, and wholesale clubs in our Eastern Massachusetts study area from 2004 through 2014.
The Eastern Massachusetts KeyPoint Report, with the Ten-Year Grocery Study plus much more information, will be available to view and download later this month at KeyPointPartners.com.
Bob Sheehan, Vice President of Research
The KeyPoint Reports examine changes in supply, vacancy and absorption, retailer activity, and market composition by store size and retail categories during a 12-month period, and include detailed information on virtually all retail properties in Eastern Massachusetts, Southern New Hampshire and Greater Hartford, Connecticut. These markets encompass approximately 260 million square feet of retail space - approximately 44% of all retail space in New England - and nearly 60,000 retail establishments. The KeyPoint Reports contain a summary and analysis of market trends and activity for each studied area.