Written by Dan Tausk, Principal/Director of Tenant Representation
I recently completed my biennial Urban Grocery Study that I launched in 2009. The purpose of this study of local and national grocer penetration was not only to aid my existing grocery client in their market knowledge, but also to put some basic supply and demand numbers to this critical driver of our industry. The results and trends in two year increments are always fascinating, and while the study only covers my specialty of “Urban” Chicago (+/-3 million people and +/-1 million households), it's fairly representative of the Chicagoland grocery landscape as a whole.
This time around the overriding theme was Dominick’s vacating +/-1.0 million square feet or 21 sites in my Urban inventory in late 2013, and the aggressive absorption of these coveted Urban sites by the local and national market leaders (Mariano’s, Whole Foods, Jewel, Pete’s).
Meantime, Chicago’s “new normal”, according to Mid-America Principal and Director of Suburban Tenant Representation Andy Bulson’s Shopping Center Report, is delivering only 2 - 2.5 million square feet of new space to the market annually, and this has and will be primarily driven by grocers. So something had to give, as this new Dominick’s supply added 2+ years of development space to the Chicago market overnight.
The result was a few new projects getting killed or stalled while the grocers focused on Dominick’s and slowed or halted organic expansion. Things will return to normal as only one of these Urban Dominick’s sites remains and the rest have been converted. However, the strong simply got stronger over these last two years making it harder for new grocers to enter the market significantly affecting development over a 2 - 4 year period.
Click here to read the entire 2015 Urban Grocery Study.
Dan Tausk, Mid-America Principal/Director of Urban Tenant Representation and author of the 2015 Urban Grocery Study
Dan Tausk | Principal/Director of Tenant Representation
Mid-America Real Estate Corporation
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