- Posted at 5:39, December 10, 2013
- By Russ Bleemer
ICSC Market Overview Panelists Aaron Fleishaker, of Fairway Markets, left, and
Thomas Caputo of Equity One Inc.
Continuing with Part II from today’s International Council of Shopping Centers' overview session (Part I is HERE):
Panelist Aaron Fleishaker, senior vice president for real estate and development at Fairway Market, a New York-based supermarket chain, said, “We’re very at good at working in urban environments,” citing his firm’s initial expansion from its iconic story on Broadway/W. 74th St. store to a much bigger, inner city store at W. 125th in Harlem near the West Side Highway.
In fact, said Fleishaker, the firm’s newer stores have been almost exclusively urban, though he later said the chain would nearly double from its current 14-store base by the end of 2016 via more expansion into New Jersey, Connecticut and Long Island.
City supermarkets' customs, he said, are different--and are similar for other city retailers. Instead of driving in a minivan to the store to get a week’s worth of groceries, Fleishaker said, Fairway patrons “take what they can carry in two hands or hang on a baby carriage.” He added, “Our customers come in every day to buy dinner. “
Of course, said Fleishaker, city supermarkets won’t have large floor plans or wide aisles. But he said that “a city store can do two-to-three times the business” of a suburban store. “We love the inner city,” declared Fleishaker, and adding--picking up on the theme--“density cures all ills.”
Equity One's Thomas Caputo--see him talk about density in Part I, HERE--agreed, and said the shinking store size is a trend that is here to stay. “Retailers are trying to squeeze more out of a smaller footprint,” he reiterated.
He cited a recent store opening at his firm's Garden City, N.Y, shopping center., the Gallery at Westbury Plaza, that was smaller than it should have been, but had a record opening sales volume.
Panelist Aaron Fleishaker added that stores want and need fast-moving inventory.
Panelist Michael Weinstock, who finances retail development as vice president of the commercial lending group at Buffalo-based M&T Bank, said that his firm projects a 7.2% growth of urban areas by 2050. “This tells you everything you need to know about what these retailers are dealing with,” he said, specifying that they are addressing urban density.
He said those retailer efforts manifest themselves in developing or adapting existing structures to include second-floor retail by adding, for example, elevators and escalators near street entrances. He pointed out that it is now common for fitness facilities and even assisted-living centers to be mixed into retail environments.
Picking up on the aging population point, Weinstock said it would drive retail development. He said that 8% of the U.S. population was 60 or older in 1950, and today it is 10%. He predicted it would rise to 21% of the population by 2050. Echoing Aaron Fleishaker, Weinstock said that these customers “want to walk a short distance to the Fairway, grab their meal, and walk home.”
He said that, likewise, retail centers his bank has financed in low density areas do what they need to do to survive—resulting in shopping plazas with doctors' offices and fitness centers.
In Part III: store layouts and footprints...