Retail investors know grocers are valuable anchor tenants. Most of those investors, despite being experts in the latest fashion brands, hottest restaurants and coolest fitness concepts, would tell you the grocery-anchored center is actually their favorite format: boring by design, reliable by nature. New research backs up this conventional wisdom, but not all grocers are equally beneficial, and grocers don’t lift all neighboring tenants equally either.

Researchers for the first time completed a large-scale study about the different ways grocers impact nearby businesses, so-called “spillover” effects, and they found that average foot traffic increases immediately and durably at nearby stores by more than 23% when a grocer opens, but only within a 0.1-mile radius. That’s only 525 feet! Beyond 0.1 miles, the research found, “the estimated effects are statistically indistinguishable from zero.”

Why are grocers so beneficial? They are a reliable driver of demand, without seasonality or much risk of falling out of favor. And all that demand, once it’s done buying groceries, will shop at nearby stores out of convenience, a shopping pattern called “trip-chaining.” The reliability of the grocer as an anchor plus the expected boost in traffic for other retailers nearby makes these tenants highly desirable.

And this study, which examined more than 850 grocery openings between 2019 and 2022, went further. Openings drove a 7% increase in the number of establishments in that 0.1-mile radius and a nearly 9% increase in employment. These positive effects diminished significantly at wider radii, going to zero at 0.2-miles.

The study shows unequivocally that grocers drive retail viability, bringing significant foot traffic to a higher density of co-tenants in this micro-area of impact. But the details are interesting and suggest pitfalls investor should avoid.

The spillover effects depended significantly on the type of retailers near the new grocer. Traditional wholesale and retail stores saw “an average increase of 30 percent in foot traffic.” “Accommodations, eating, and drinking” saw above-average benefits. But financial, communication and professional services retailers did not fare as well, and medical and healthcare services saw “an economically modest response of approximately 10%.” One surprising finding: there was no evidence of negative competitive effects “on nearby incumbent grocery stores.”

Also significant: the type of grocer that opened. The most positive spillover effects came from national and regional grocery chains, like Publix and Whole Foods, driving a 31% increase in foot traffic to surrounding businesses. Big-box retailers like Target, Walmart and Costco, and discounters like ALDI, Grocery Outlet and Save-A-Lot “generate more modest spillovers of 16% and 17%,” respectively.

On employment and establishment growth, most of the gains stemmed from new businesses opening near the new grocer - a wine shop next to a Whole Foods, for example. But some of the uplift came from a reduction in the number of exiting stores, showing that the grocer-created foot traffic lifts all boats, even marginal operators.

There’s a separate nugget in this paper, not a finding per se, but the novel methods the researchers used. They had to confront the possibility that foot traffic near these new grocery stores would have increased anyway, especially since grocers tend to pick already-fertile locations for new openings. The researchers used sophisticated AI to find twin locations - very similar sites nearby that the grocer could have selected but didn’t - and then validated those twins with econometric analysis (demographics, income metrics, etc.). Each actual grocer site had a highly validated twin, and the outperformance of the actual sites became the foundation for the paper’s findings.

The researchers may have stumbled on something actionable for forward-thinking real estate investment shops. They got very good at finding twins, and those vetted comparable sites represent optimal locations for future grocer or other large-format retail openings. Knowing how to find those twins quickly and accurately is an investment opportunity, especially for family offices or other long-term capital that can be patient.

One fun takeaway from all this is that we now know much more about how to optimize size and co-tenancy in a project if you have a grocer in hand. You can also use this to evaluate grocery-anchored acquisitions. Having an anchor is great, but spillovers are hyper-local, strongest for retail and food uses, and materially greater around high-quality grocers. For investors, that’s the opportunity: not merely owning grocery-anchored retail, but understanding how to organize everything around the grocer to maximize the demand it creates.

Who: Built Robotics

What: The best sites for solar power are often hard to physically get to. The company’s robots eliminate the need to bring in construction teams.

The Sparkle: Built “bridges the workforce gap” by automating - with what look like Transformers - construction of the piles that support utility-scale solar power plants. Its AI-powered robots work in fleets, 24 hours a day, creating the structures that hold large solar panels. They also have Transformers that automate trenching, another massive and highly repetitive construction requirement for these projects. And in case you missed it, solar is growing very fast; it will provide 10% of America’s electricity this year, up from 1% in 2015.

Nearly half of the 3.3% annual inflation seen from March 2025 to March 2026 came from housing costs. You can see in the graph below, increasing housing costs seem intractable, even if not always the single largest factor impacting consumers. Note the spike in the last bar on the right - that’s from oil prices increasing in March of this year. 

Link: https://usafacts.org/answers/what-are-the-biggest-drivers-of-inflation-in-the-past-year/country/united-states/ 

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