By David Z. Beitz
Looking for which grocery retailers are building new stores at the fastest clip?
The good news is 19.5 million square feet of new grocery space is on the way in the United States.
Grocery has been a bright spot in the economy over the past year as spending shifted away from restaurants, especially those dependent on daytime office and tourism populations.
Many grocers tried grocery delivery or Click and Carry (pickup) for the first time, and this trend will likely advance for many even after things return to “normal.”
While e-commerce is changing how many get their food, the addition of new store locations shows no signs of slowing down.
Today, five grocery retailers are leading the pack with a total of 153 new stores currently under construction shown on the map below:
#5 Amazon Grocery: Amazon Grocery has 22 locations under construction. Many of their locations are backfills of existing space, such as former Toys R Us boxes or previous grocers.
It is interesting to note that they have not announced any new locations in the southeast yet.
Perhaps Publix’s strength and momentum in the southeast has something to do with that, or it is a logistics issue with the distribution.
Another idea is that they could enter the southeast through an acquisition. We’ll keep you posted.
#4 Target: Target has 23 locations under construction. Except for the Milwaukee, Wisconsin, location, all of these locations under construction are the smaller footprint Targets that range from 23,500 square feet to 42,000 square feet.
Target has been steadily adding more items to its private label food brand Good and Gather. According to their annual report, food and beverage make up about 20% of Target’s revenue.
It has been reported that Target’s smaller footprint stores devote around 25% of their store space to grocery items.
#3 Aldi: Aldi has 31 locations under construction. Last month (February 2021) Aldi broke ground on a new regional distribution center and regional headquarters in Loxley, Alabama, which will help support its expansion throughout the Gulf Coast region.
The 564,000 square foot facility will be equipped to service up to 100 stores in Alabama, Southern Georgia, Mississippi, the Florida panhandle, and Louisiana.
#2 Lidl: Lidl has 33 locations under construction. Last year (2020), Lidl opened a new 700,000 square foot distribution center in Perryville, Maryland, and has plans for a new distribution center in Covington, Georgia.
In the United States, Lidl stores are larger than Aldi stores, but Lidl has downsized its store footprint compared to the stores they first entered the US market.
At one point in their expansion, Lidl started tying up locations in Texas but then reversed course and divested most of those locations.
#1 Publix: Publix has 44 locations under construction. Greensboro, NC is the site of their 10th distribution center currently under construction and is expected to be complete by the end of 2022.
This new distribution center will be the first in North Carolina and will have a 940,000 square foot refrigerated warehouse along with a 1.2 million square foot dry grocery warehouse.
Publix made the news recently with their “Feeding More Together” program. This program funded by Publix supports food banks with produce directly from farmers and delivers nonperishable food items funded by customer donations from their stores.
Track New Amazon Fresh stores and grocery-anchored projects
nationwide with Planned Grocery® from BuildCentral.
What drives new grocery store growth?
Many factors go into grocery location planning and the site selection process for a new grocery store.
One of the items included in almost every site research package is info on what residential developments are planned, under construction, and recently completed nearby.
With an average of $70 spent per person per week on groceries, more people mean there is potential for more sales.
Below is an example of the new residential data from BuildCentral shown in the Planned Grocery platform:
When zoomed in on Florida, each square on the map is an active multi-family project, and each diamond is an active single-family project with at least 20 new homes.
Each project has info on the number of homes/units planned and the project’s timing. As grocery stores often follow the new rooftops, data like this will be crucial in helping to find new markets and new store locations.
If you want to learn more about grocery-anchored leasing, check out my recent podcast with Lance Billingsley of Federal Realty. He goes over two recent projects and discusses the challenges of doing business during Covid.
You can find a list of our podcasts here: https://plannedgrocery.com/podcast.
Any thoughts on this blog? Feel free to contact me at David@PlannedGrocery.com
If you would like more info on Planned Grocery or the new residential data, please contact Alex DeLoach at Alex@PlannedGrocery.com or give us a call at 888.511.5866.