Demand among investors for grocery-anchored shopping centers is high, and grocery chains are buying up many of the centers in what may be both a defensive and cost-saving move, according to a story last week on retailtrafficmag.com.
The defensive purchase by a grocery chain limits the uncertainty that a new shopping center owner brings. At the same time, it can be an effective cost saving move. Kroger, which owns 45 percent of the 2,435 stores it operates, says it saves $1 per square foot per year by owning its stores versus leasing them.
Overall, the biggest grocery chains in the U.S. have invested about $450 million in grocery-anchored shopping center purchases in the last two years. Publix has led the way. The company, which operates 1,058 stores in the Southeast, spent $187.2 million to purchase 17 centers, making it one of the top 10 most active buyers of grocery-anchored centers.
Ahold (Giant, Stop & Shop) also purchased 17 centers during this time period, spending $118.4 million. Kroger has spent $61.7 million for nine shopping centers, and Wal-Mart has purchased four centers for $24.8 million.
According to the story, in many cases the grocery chains are taking advantage of "right of first refusal" clauses that allow them to match other buyer's offers, rather than having to outbid them.