By Amy Wolff Sorter | March 24, 2025 | As published by Connect CRE
Retail real estate is a study of opposites. At one end, there is a lack of space and very low vacancies. At the other end, there are bankruptcy cases and more bankruptcy cases.
However, retail encompasses many uses, products, services and space requirements. Metrics differ depending on the sector.
For example, according to Mark Sigal, Datex Property Solutions CEO, the strongest merchant categories in retail based on sales growth since the pandemic are:
- Fast food: 42%
- Grocery: 20.1%
- Beauty products: 130%
Sigal and other retail experts shared their insights with Connect CRE, explaining the situation behind these three retail areas.
COVID, Grocers and Fast Food
But first, a little history.
In the years before 2020, e-commerce was starting to come into its own. Then the pandemic struck. While the subsequent lockdown imposed hardship on much of the retail sector, quick-service restaurants (QSRs) and grocery stores performed well.
“During the onset of the pandemic, grocery stores were deemed essential businesses, and we experienced panic buying products like meat and toilet paper,” said Sean Unsell, associate principal with RDC. People in quarantine were also more interested in buying food at the “deemed essential” grocery stores to cook at home.
At the same time, fast-food restaurants operated their drive-throughs as normal. “People wanted to get out of the house but were cautious about exposing themselves to COVID,” said Stephanie Skrbin, a retail broker with Axiom Retail Advisors.
Still, QSRs and grocers had to adapt to the changing situation. “Chipotle, Panera Bread, Starbucks and others all pivoted and primarily focused on drive-through locations,” Skribin commented. Added Coreland Companies’ Vice President Chris Premac: “Both grocers and QSRs had to adapt quickly and developed new delivery models and mobile pickups.”
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