It should come as no surprise to those tracking trends in retail expansion that restaurant, grocery and apparel continue to be the fastest growing categories. But who’s next in line? Interestingly enough, based on our research, two categories stand out in terms of expansion: automotive aftermarket stores and convenience stores. At least 35 different automotive aftermarket companies have popped up to announce openings in the last few months, including large and small chains alike. Similarly, 32 convenience store companies have made expansion announcements.
Automotive do-it-yourself, as we have read, has become increasingly popular as consumers hold on to their cars longer. According to Robbie Petty, first vice president in SRS’ Phoenix office, “Despite the uptick in the economy and automotive sales hitting an all-time high, a large percentage of the population still wants to drive their cars much longer. This leads to the need for more frequent auto service.”
Convenience stores have grown in popularity as well as Americans return to work and seek time-saving options. In addition to adding locations, some c-store companies are also shifting their consumer focus. According to David Wirth, senior vice president in SRS’ Philadelphia office, “Convenience stores are really focusing on being woman-friendly by adding large, clean bathrooms with slate floors, small play areas for children, and flat screen televisions. These changes often affect their store layouts and real estate footprint.”
Interestingly, the real estate needs for convenience stores and automotive service/supply stores are similar, making it a challenge for both segments when searching for locations. “In my market, and I’m sure in others, convenience stores prefer second generation space of former car care facilities or comparable buildings, which are very few in number,” Wirth said.
The same can be said for automotive chains. “Finding quality real estate in dense markets is a big challenge. The build-to-suit option exists, but is only feasible if the franchisee is credit-worthy,” Petty explained. “Zoning is a challenge as well for automotive uses, due to environmental issues and the long process involved in working with municipalities to make a zoning change.”
Watching the movement in these categories paints a picture of consumers’ reaction to the changing economy and the need for real estate, particularly land and pad sites, for these growing segments.
For more information contact Janie French, Director of Business Development, SRS Real Estate Partners.