Despite economic uncertainty, grocers are continuing long-term growth plans, according to Jones Lang LaSalle Inc., which recently released its annual grocery report and shared some interesting trends on how Angelenos like to shop.
During pandemic-related lockdowns, restaurant and bar sales were at an all-time low, while grocery sales skyrocketed. Those numbers, however, reversed in March 2021 when a rise in inflation affected grocery prices. As of December, lifetime national restaurant and bar spending had surpassed lifetime national grocery spending by nearly $20 billion.
“What stands out to me is the difference between the restaurant and bar spending, and how it looks like the restaurant space has begun to outpace grocery because of the inflationary rate,” Francesca Howard, a vice president at JLL who specializes in retail, said. “However, I feel like there is going to be a return to grocery business. When we look at who the darlings are for anchoring new retail development or multifamily development, most of the developers still are rallying around the grocery product type as an anchor tenant.”
Within Los Angeles specifically, many multifamily complexes are betting big on ground-floor grocery stores, including Modera Argyle in Hollywood, which includes 276 apartments over a 23,000-square-foot Bristol Farms market, and Angelene Apartments in West Hollywood, a 179-unit apartment building on top of a Sprouts.
Los Angeles shopping trends
Howard says Los Angeles continues to see requests to add smaller-format grocery stores for convenience purposes to further anchor retail centers.
Due to Los Angeles’ dense population, operators have tested out various sized stores and offerings from very upscale with a wide range of high-quality prepared foods, to traditionally sized full line grocery stores that one would expect to see in suburban markets.
“We have such a wide demographic in Los Angeles County,” Howard said. “It really runs the full gamut from lower income all the way up to very upper-income areas.”
According to JLL’s Ken Shishido, the bigger generic supermarkets, such as Ralphs and Vons, are not expanding as much as some of the other grocery chains.
Instead, Shishido said the niche players are the ones experiencing the most expansion, including Trader Joes and Sprouts, as well as discounters such as Aldi and Grocery Outlet, and some ethnic markets that are increasingly investing in restaurant experiences within their stores.
The two-story 99 Ranch, for example, which opened late last year in Westwood and was the first major Taiwanese grocery store to open on the Westside, reserved its top floor for a food hall.
