Grocery Won 2025: Demand, Traffic, and the Investment Case

Why It Matters

Grocery’s steady growth and evolving specialty formats make it a cornerstone for retail‑real‑estate investors, while anchor‑risk and delivery cost dynamics demand proactive lease and asset‑management strategies.

Key Takeaways

• Grocery sales outpaced inflation despite food price pressures.
• Online grocery share plateaued around 17% of total spend.
• Grocers reinvest heavily in store remodels, rarely cost‑shared with landlords.
• Specialty grocers expanding nationwide, driving fresh and ethnic product demand.
• Losing a grocery anchor forces landlords to consider backfill or asset reset.

Summary

The episode of "What’s in Store" examined the grocery‑real‑estate landscape as of 2025 and looked ahead to 2026, treating grocery as the premier traffic‑generating anchor for retail centers. Hosts Carly Iacono and Chris Ressa highlighted how the sector weathered food‑price inflation, yet managed to grow sales slightly faster than inflation, underscoring grocery’s resilience.

Key data points included online grocery accounting for roughly 17% of total grocery spend, a level the hosts expect to plateau unless delivery costs fall dramatically. Grocers are committing substantial capital to store remodels roughly every seven years, with most of the expense borne by tenants rather than landlords. Meanwhile, specialty grocers—from H Mart and Uncle Giuseppe’s to regional players like Plum Market—are proliferating across the country, offering fresh, ethnic, and value‑oriented concepts that attract higher‑margin spend.

Illustrative examples featured the post‑bankruptcy backfill of A&P leases by Morton Williams, the aggressive expansion of chains such as Trader Joe’s and Sprouts, and Amazon’s recent decision to shutter its Amazon Fresh stores after a costly “fail‑fast” experiment. The hosts noted that landlords benefit from the grocery anchor’s traffic but must be prepared for complex lease‑reset scenarios if a tenant exits, often requiring either a comparable grocery replacement or a full asset re‑configuration.

For investors and property owners, the takeaway is clear: grocery remains a stable, high‑traffic asset class, but value will increasingly hinge on supporting specialty concepts and managing anchor‑risk. Landlords who can negotiate favorable cap‑ex terms, anticipate the shift toward in‑store experiences, and swiftly backfill vacancies will capture the sector’s durable cash flow while mitigating the downside of anchor turnover.

Original Description

Grocery Won 2025: Demand, Traffic, and the Investment Case

In this episode of What's in Store?, Karly Iacono and Chris Ressa break down why grocery emerged as one of the strongest and most resilient asset classes in 2025 and what that means for investors underwriting retail today.

We cover:

• Why Amazon’s physical grocery closures are a net positive for landlords

• The rise of independent and regional grocers reshaping demand

• Why 2025 grocery growth reflected real traffic, not just inflation

• Why online grocery complements physical stores, not replaces them

The takeaway: grocery didn’t just survive 2025, it validated the long-term investment thesis for necessity-based retail with real demand and durable cash flow.

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