Hey guys what are some challenges facing grocery anchored retail markets today? Is it supply chain and the ability to add on options like same day delivery and curbside pickup? I can't think of too many since grocery has been a strong point during covid. Let me know I want to be well versed in the overall market.
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Read the investor presentations and public filings of any retail REIT and there’s your answer
In some cases it is not the grocer that is the issue, but rather the rest of the center. This is especially true in urban infill markets where you may have a strong performing grocer but the rest of the inline retailers are dragging down the center because you cant push rents. If this is the case it might make sense to scrape them, leave the grocer and put some higher and better use on site such as multifamily.
I think this is more the answer they will be looking for - they're interested in the overall center, not specifically the grocers. You're bang on about the challenges facing grocers, I think supply chain and trying to become omnichannel retailers is their biggest challenge going forward, but it's not going to make or break grocery stores, but that shouldn't be the focus of your answer.
I'd dive into how grocery-anchored retail is arguably the best retail play in the market right now (some might argue the only retail play) because of how resilient grocers are to long run retail trends (see: e-commerce) and outlier events like COVID as a necessity-based retailer, then follow that up with "... BUT the overall centers are still susceptible to the threats other areas of retail are facing" because if other tenants fail the center may fail. This is why you see a lot of formerly grocery-anchored centers rebranding as necessity-oriented retail as they roll over the majority of their tenant mix into pharmacies, banks, etc.
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