Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: grocery store

  • Over 15% of retail sales in the US are now happening online

    Amazon was founded in 1994 and went public in 1997. By 1999, some 5 years after the company was started, only about 1% of total retail sales were being done online in the US. So you have to give it to Bezos, he saw what was coming and he got in early to help create it. This was not so obvious back in the mid 90s. The internet as a whole was still being viewed with skepticism, especially after the dot-com bubble.

    Today, online shopping represents over 15% of total retail sales. (See above chart from Charlie Bilello.) The pandemic pop is over, but it looks like we’ve returned to a pretty clear trendline — up and to the right. I guess the questions now are: When and where does this start to flatline? It doesn’t seem likely that this goes to 100% in the foreseeable future, especially if you include grocery. But it’s going to go a lot higher.

    For myself, if I were to exclude food/grocery, I would say that the vast majority (80-90%) of my retail purchases are done online. Even if I’m in a physical store, I’ll often pull out my phone to price compare. If it’s cheaper on Amazon, I’ll just order it there.

    Here’s another example.

    This past summer when I was in Park City, I discovered the brand Vuori. I had heard of them before, but I had never actually seen or touched their clothes. It’s great stuff. But instead of the store convincing me to buy something, it convinced me that I like the brand and that I should probably shop on their website at some point in the near future. And that’s exactly what I ended up doing. (Sorry Lululemon. You’re still my favorite.)

    All of this is perhaps obvious in a world where 15% of total retail sales are happening online. But I would imagine that the retail landscape and our cities will look very different when this number goes even higher. Our cities were different at 1% compared to today at 15%; so imagine what 50% or 80% might be like.

  • Ground-floor retail?

    I recently asked this on Twitter:

    You live in an apartment/condominium. If you could pick one ideal use/tenant for the ground floor of your building, what would it be?

    And a number of people responded.

    But I suppose I should also answer my own question.

    I lean more towards utility. My ideal use — assuming an urban storefront — is not a fancy restaurant or a super cool coffee shop. It would be some sort of quality bodega that:

    • Sells essential grocery needs (milk, eggs, toilet paper, etc.)
    • Sells wine & beer
    • Has a deli/food counter where you can buy a breakfast bagel, a sandwich for lunch, or a quick dinner when you’re in a pinch
    • And, yes, has pretty good coffee

    It would also need to be open early and late: 7am to 12am, please.

    What would you want?

  • Voi Cube — the first store in Switzerland without any employees

    Swiss supermarket chain, Migros, has just launched what is being called the first store in Switzerland to not have any employees. The concept, called the Voi Cube, is a small container-like outparcel space that is open 24/7 and offers about 500 or so everyday items. You enter using their app, you grab what you need, and then you check yourself out. (Presumably the doors don’t open back up until you’ve paid.)

    The concept is being positioned as a convenience add-on to its existing grocery store business. Swiss federal labor laws still prohibit retail staff from working on Sundays, and so this is a clever way for people to shop for essentials during that time. They just got rid of the labor component. It also begins to show just how flexible and adaptable grocery stores can be as the retail landscape continues to evolve.

  • Slate Asset Management raises €250 million in third European real estate fund

    The below press release went out this morning. It’s a good news story that shows the resiliency of grocery and food logistics.

    On a related note, Slate Retail REIT also recently announced that, as of April 14th, it had already collected 80% of April rents and was outperforming the industry. At that time and based on industry feedback, the REIT estimated that a number of retail strip center landlords were seeing April rent collections in the range of 40-50%.

    TORONTO and LONDON, April 23, 2020 /CNW/ — Slate Asset Management (“Slate”), a leading alternative asset management platform with a focus on real estate, announced today the final close of its Slate European Real Estate Fund III (“Slate Europe III”). Consistent with its predecessor funds, Slate Europe III will target grocery real estate assets in Europe. The oversubscribed closed-end fund exceeded its target size of €200 million and closed at its hard-cap of €250 million.

    “During this unprecedented time of market disruption, we are pleased to close Slate Europe III at its hard-cap and are thankful for the confidence investors from diverse geographies continue to place in us as Slate expands its presence across Europe,” said Brady Welch, Slate’s London-based Founding Partner. “We have been investing in last-mile logistics for some time and are proud to launch our third fund in the European grocery real estate space since 2016, a feat that underscores our commitment to the sector and validates the importance of last-mile solutions in the grocery real estate market.”

    Since December 2016, Slate has completed a total of 250 grocery property acquisitions in Europe comprising over 450,000 square meters of gross leasable space. Slate has European offices in London, Frankfurt, Dublin and Luxembourg.

    About Slate Asset Management

    Slate Asset Management is a leading real estate-focused alternative investment platform with over $6.5 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm’s careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.

    For Further Information
    Investor Relations
    +1 416 644 4264
    ir@slateam.com

    SOURCE Slate Asset Management L.P.

  • Amazon’s cashier-less grocery store finally opens

    This morning the first Amazon Go store opened to the public in downtown Seattle. It’s more convenience store than grocery store, but the big deal is that there are no cashiers and no lines.

    You enter the store through a gate and with your phone and Amazon’s app. As you walk around the store and pick up items they get automatically added to your online cart on Amazon.

    So everything goes right into the offline bag you’ll be leaving the store with. Place an item back on the shelf and it is instantly removed from your “cart.” Walk out of the store and you’re automatically charged.

    It’s not yet clear how exactly the technology works, but Amazon says that all of this is accomplished through sophisticated computer vision (cameras), machine learning, and lots of sensors. 

    What’s really remarkable is that it doesn’t rely on every product having a special chip or sensor attached to it. I would think that was one of the biggest hurdles to overcome in order to remove the pain point of grocery store lines.

    Now that this is up and running, I can only imagine the customer behavior data that they must be collecting. Heat maps of every shelf showing conversion rates for every imaginable customer segment. (Are tall people more likely to buy products displayed higher up?) Correlating people’s food purchases to their broader Amazon shopping habits. And the list, I’m sure, goes on. 

    There is even speculation that Amazon will begin licensing this technology to other retailers, similar to what it does with Amazon Web Services. That seems like a reasonable assumption given the data play we just talked about. Assuming the tech works, it’ll get copied. So they may as well embed themselves.

    In case you were wondering, the Bureau of Labor Statistics pegs the number of cashiers in the US at about 3,555,500 (2016 number).

    And this number is projected to remain more or less flat until 2026.

    That doesn’t feel right to me.

  • Frais du toit

    This past summer, an IGA store in Montreal’s Saint-Laurent borough erected “the largest organic green roof garden in the country.” It is about 25,000 square feet and it has a soil depth of only 150mm. 

    They also claim that it’s the first supermarket in Canada to sell produce grown on the roof of the actual store. The brand: Frais du toit, or fresh from the roof. There’s even a livestream in the vegetable aisle showing you how the goods are doing overhead.

    I would be curious to know what their yields are like and what they are charging for the produce. But it’s certainly a praiseworthy initiative.

    Below is a quick video that will give you an idea of what the roof looks like. If you can’t see it, click here.

    [youtube https://www.youtube.com/watch?v=-Z69ScyHCfU&w=560&h=315]

  • design-plus:

    Loblaws food store by Landini Associates, Toronto