Dive Brief:

• Pressured by e-commerce sales and eager to fill the void left by failed department stores, mall owners are looking to supermarkets to bring in regular traffic, according to The Wall Street Journal.
• Wegmans will open a store in 2018 in a 194,000-square foot space formerly occupied by J.C. Penny in Natick, MA, while Whole Foods will open a 365 store in Bloomington, IN’s College Mall.
• Some analysts question whether supermarkets will fit in alongside clothing stores, jewelers and other mall retailers. They also note that many mall locations are oversized with large parking lots, which could be a turn off for older shoppers.

Dive Insight:

After years of ignoring supermarkets, mall owners changed their tune in the wake of the 2008 recession as consumers cut back their spending. Now, interest in grocery stores has spiked once again as e-commerce cuts into retail store sales at America’s malls.

For mall owners, the appeal is clear: Supermarkets generate consistent traffic that can benefit its other retail establishments. Investments in fresh foods and foodservice over the past few years have made groceries even more attractive as destinations that could anchor a mall’s lineup of stores.

Supermarkets, on the other hand, get a lot of square footage in an existing space for cheap. Stores can also benefit from mall traffic, and from shopper familiarity with the mall name and location. 

But it’s not exactly a match made in heaven. Grocery shopping and clothes shopping don’t really go together. Also, mall spaces aren’t always conducive to the quick-in, quick-out grocery shopping experience that many shoppers, particularly millennials, are looking for these days. Malls are often located off highways and interstates at points that reflect their need for space more than anything else. For many consumers, it’s an out-of-the-way trip.

Supermarkets that generate a lot of interest on their own could be a good fit for out-of-the-way locations. Then again, most supermarkets won’t site their stores in places that aren’t convenient for their customers to get to. As they look for room to grow in a crowded industry, retailers will continue to prioritize location, cost and economics above all. If a mall location hits the sweet spot, then so be it.