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The return of retail

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  • | 11:00 a.m. September 11, 2015
  • Tampa Bay-Lakeland
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This year's International Council of Shopping Centers' Florida convention was punctuated by a new, larger venue and energy reminiscent of a decade ago -- signs that retail is once again a hot commodity.

But unlike past confabs, the 2015 ICSC gathering in Orlando's Orange County Convention Center — a shift from the smaller Gaylord Palms — had few new strip centers or malls for the roughly 3,600 participants to ogle. Instead, emerging grocery store chains, restaurants and alternative retailers captured most of the buzz.

“The big push, without a doubt, is with grocers,” says Paul Rutledge, a retail specialist and first vice president with commercial brokerage firm CBRE Inc. “And now, there are all new players.”

Though legacy chains like Publix and Winn-Dixie continue to dominate from a square-footage perspective, relative newcomers such as Aldi, Trader Joe's, Whole Foods Market and others are trying to gain market share through value plays and specialty merchandise.

At the same time, emerging chains such as Hialeah-based Sedano's Supermarkets and Lucky's are hoping to capture shoppers with ethnic foods and alternative merchandise, while convenience purveyors such as Wawa and Walgreens aim to woo consumers with one-stop shopping.

Aldi, Wawa and Sedano's — the nation's largest Hispanic grocery chain that is currently concentrated around Miami and Orlando — all had a presence at ICSC Florida's Aug. 31 and Sept. 1 gathering for a possible move further into the state.

The state's leading grocer, Publix Super Markets Inc., was there, too, more prominently than in the past.

“Five years ago, you didn't see their presence at an event like this,” Mike Milano, managing director of retail investment sales for brokerage firm Colliers International Tampa Bay says of the Lakeland-based chain. “Now, they are front and center. Publix has transformed from the dominant supermarket chain in the market to a dominant landlord, as well.”

Milano says that's because Publix — which generated $1 billion in profit in the first half of this year — can both save money and better control the shopping experience by owning its centers.

The push for consumers' food dollars comes amid consolidation and changes in the grocery business. Chains like Publix, Aldi and Trader Joe's are trying out smaller stores aimed at infill and urban locations.

The possibility of home grocery delivery by Amazon, Instacart and others is forcing grocers to amp up prepared food offerings and focus on lifestyle trends like health and wellness.
Some chains are even installing on-site coffee shops and pubs to lure shoppers with a heightened experience.

Missing from the ICSC gathering, however, were new shopping center proposals.

That's because developers are focusing on adding existing centers with new tenants or on largely one-off infill locations that require less land and often are near existing traffic patterns.

“I think there's still just a general trepidation on the part of most people in the aftermath of the recession,” says Mark Chait, director of Florida leasing for Benderson Development Co., the largest retail landlord in Southwest Florida.

Benderson is adding to its already expansive retail offerings around the $315 million Mall at University Town Center, which it owns with Taubman Centers Inc.

The company is constructing 101,455 square feet of new retail space in the UTC “West District” near an existing Ethan Allen furniture store.

And in Naples, Benderson is adding 46,000 square feet of new retail space to its Gateway Shoppes and Marketplace Commons project.

Milano says existing centers are expanding in part because this economic cycle hasn't been weighed down by the overbuilding that occurred in 2005 through 2007 in Florida and elsewhere.

- K.L. McQuaid


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