07/12/2021 | By John Cumbelich
Among the many radical and fundamental changes wrought in retail through the COVID crisis, perhaps none has been more widely accepted than the notion that what we now call Essential Services are the most indispensable and resilient of all retail offerings. The places where we purchase our food, fuel, medicine and home improvements have powerfully outshone all others throughout the recent pandemic.
Now, having trained ourselves to look at retailing through the lens of Essentiality, a remarkable trend has become apparent, as various retailing brands are increasingly seeking to put multiple essential offerings under one roof. Perhaps you have noticed how your grocery store…has gotten into the fuel business. Or how the place where you buy fuel has been dramatically growing the size of its grocery offering, quickly moving from 500 SF to 2,500 SF to 5,000+ SF.
This poses an interesting question, and perhaps a peek into the future of retailing. Why wouldn’t CVS or Lowes or Walgreens get into the fuel business too? If Costco can sell gas, why can’t Home Depot?
Among the most fascinating of the early adapters in this re-shaped world of retail are Convenience Stores. Numerous brands such as EG Services (Tom Thumb, Turkey Hill, Quik Stop, etc), Maverik, Rocket, Pilot Flying J and others are now building C-stores of 5,000, 6,000 and 7,000 SF. And increasingly these brands are leveraging the repeatable traffic that both fuel and grocery sales generate not simply to sell their essential products, but to monetize the traffic it generates by leasing space to Quick Service Restaurants and other retail and dining brands inside their box.
Brands like Subway, Arby’s and others are moving quickly inside of these mega-sized C-stores, having learned to expand their site selection choices beyond the traditional shopping center, to the interior of a highly trafficked box that sells fuel and groceries 24/7/365. Savvy brands always seek to position themselves where the customers can be counted on. And you can’t count on a more durable source of customer traffic than the place that sells both groceries and fuel.
We are on the leading edge of a radical reinvention in retailing that will continue to morph and grow as the integration or marriage of various essential service providers continues to play out.
Consistent traffic is the lingua franca of retailing. For decades, grocery stores have proven to be the critical catalyst that spawned thousands of shopping centers, creating the daily-needs shopping patterns that attracted the café, the bank, the shop and the restaurant. Looking forward, brands that can offer essential goods and services will seek both to consolidate and congregate, thus concentrating retail traffic much like the neighborhood grocery store did, and catalyzing a next generation in retail development.
About John Cumbelich & Associates
John Cumbelich & Associates is a San Francisco Bay Area based firm that provides commercial real estate services to Fortune 500 retailers and select owners and developers of retail commercial properties. The firm's expertise is in developing store networks for retailers seeking to penetrate the Northern California marketplace and the representation of premier Power Center and Lifestyle developments.