CREJ

Page 2 — Retail Properties Quarterly — May 2019 www.crej.com Contents Letter from the Editor A s we prepared for print, I came across an interesting study about food and beverage trends from CBRE, “2019 U.S. Food in Demand Series: Con- sumers.”The study found that in 2018, nearly a quarter of every retail dollar spent in the country was within this category, which is a significant change compared to a few decades ago. In 2018, the industry accounted for retail sales of $1.5 trillion. “This evolution is partly due to demographic shifts that have led to new lifestyle habits,” the report said. “Other factors include eco- nomic changes that have affected both the price of food and the cost of serv- ing and selling it, and technological changes that have created newways to research, access and purchase food.” Based on the finding, the study offered a number of predictions. Of note, it expected brick-and-mortar food-and-beverage spending to con- tinue to outpace traditional retail cat- egories over the next five years, grocery stores to devote more space to pre- pared foods and in-store dining areas, and that food-and-beverage opportuni- ties will be greatest in cities’ densifying suburbs. The theme of all of these findings seems to center around the impor- tance of convenience to the consumer. Interestingly, the report found that the need for convenient dining and shop- ping experiences weren’t all driven by the younger generations’ demands. Instead, the increased desire for con- venience spans all generations and household formations. For example, take grocery stores. Most of us already are familiar with the ways our local chains are embrac- ing online shopping, home deliveries and smaller store footprints. All of these concepts became hot topics over the past few years as grocery chains merged, Amazon entered the fray and, in 2016, U.S. consumers spent more money dining out than at grocery stores – a trend has continued ever since. However, the CBRE report found that one reason for this shift is due to a “fundamental trend toward conve- nience,”which gives grocery stores an “opportunity to shift their attention to prepared meals and in-store bars and restaurants, where profit margins are higher than for packaged food and pro- duce.” Along the same line, the suburbs are densifying as residents age and move out of our city centers to start families. While baby boomers presently spend the most on food and beverage, in the next decade as millennial spending capacity increases, they are predicted to outpace all other generations in this category. As many of these city dwell- ers head to the ’burbs, they expect their dining options to follow. Perhaps this report resonated with me because I’m a 30-something mil- lennial about to start a family living in south Denver. For us, being able to eat well conveniently is a priority. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104 Food and beverage trends Discipline ushers in strengthened retail market Jason Schmidt and Chad Murray Slowdown of new supply aids declining vacancy Drew Isaac and Ryan Bowlby Emerging retail markets along the Front Range Mike Willingham Surety bonds: An alternative security for leases Tal Diamant and Elaine Bailey Urban placemaking boosts opportunities for retail Chris Viscardi How to track rapidly changing success metrics Danaria Farris McCoy International cuisines, food halls lead dining trends Kelly Greene and Lara Silversmith Curate the right pop-up brand for your property Abigail Plonkey Make the most of available retail square footage Ilene Vivinetto Suter Tips to design retail space for any future tenant Nicole Kawulok Companies adapt to changing retail landscape Todd Guthrie Use tech to identify smart value-add opportunites Tom Ethington 4 6 8 10 12 14 15 16 17 18 19 20