Retail real estate was pronounced dead by countless commentators between 2015 and 2020 — the victim of Amazon and the inexorable march of e-commerce. The reality has proved more nuanced. While mall-based retail has indeed suffered structurally, essential-service retail, grocery-anchored centers, and experiential retail have demonstrated remarkable resilience, and select retail investment opportunities remain compelling.
What Survived — and Thrived
Essential retail — pharmacies, grocery stores, dollar stores, quick-service restaurants, auto parts retailers, and medical services — has proven e-commerce resistant because the goods and services they provide are needed immediately, are difficult or uneconomical to ship, or require physical presence to deliver. Dollar General’s same-store sales growth through the pandemic, CVS’s expansion of health services, and the continued proliferation of fast-casual restaurants demonstrate that physical retail serving essential needs continues to perform.
Grocery-Anchored Centers
Neighborhood shopping centers anchored by regional or national grocery chains represent one of the most defensible retail investment formats. The grocery anchor drives weekly traffic that supports surrounding tenants — restaurants, nail salons, pet stores, urgent care centers — generating a virtuous cycle of activity that e-commerce cannot replicate. Grocery-anchored center cap rates have held up better than other retail formats through the retail disruption period.
The Return of Experiential Retail
Post-pandemic consumer behavior has shown strong preference for in-person experiences — fitness, entertainment, food and beverage, health and wellness. Retailers offering experiences rather than products have driven new demand for well-located retail space. Fitness studios, pickleball courts, food halls, escape rooms, and medical wellness centers are filling spaces vacated by traditional retailers and paying market-rate rents.