Recent reports have shown a decline of 29 percent in the openings of grocery stores. In 2017, the year when the e-commerce giant Amazon acquired Whole Foods, an American supermarket chain, grocery store expansions have been scarce and a number of supermarkets were on the verge of bankruptcy.
Investments in grocery stores
Despite this, there was an increase of 5.3 percent in investments for grocery stores in the same year as compared to the statistics in 2016. In a year with relatively low transaction volume, this is the only retail sector to see a modicum of growth.
Grocery stores across the world fear disruption by e-commerce platforms. Despite the fears, grocery stores still have some leverage against e-commerce platforms and investments are relatively safe in these sectors.
Most investors prefer the top grocery chains in the U.S. market as these are highly likely to earn more profit as compared to the rest of the grocery stores. Some of these grocery stores include Whole Foods, Trader Joe's, and Wegman, among others. Instead of spending their resources on opening new branches, these chains are focusing on easing home delivery and fulfilling online orders. California, Virginia, and North Carolina are among the strongest markets when it comes to expansion.
In Texas, the number of expansions in 2017 was very less as compared to 2016. Expansion in Texas increases with a rise in residential development.
Trends in grocery retail
Successful grocery brands have wisely invested in opening online retail platforms and have facilitated home delivery. They target better digital platforms and offering the best commodities at affordable prices.
In addition, these chains are also aiming at providing their customers a satisfying customer service.
As of 2018, analysts have predicted that grocery chains will be trying out new store formats and there will be more of small grocery stores that can take up online orders. In addition, retailers will soon be implementing systems and technology that help them get a better insight into customer preferences based on data. There will be more mergers and acquisitions to increase profitability and service.
Retail stores are aiming to provide faster scan and go options for their customers. A large number of customers get frustrated when they see a long queue at the billing counter. Such glitches motivate people to opt for online shopping. It is convenient and time-saving.