Texas stocks up on grocery stores
Texas added more grocery space than any other state last year as H-E-B and Kroger expanded in growing cities such as Houston and Dallas, according to a new report.
Grocers added more than 440 stores spanning 18.8 million square feet across the U.S. in 2016, and 16 percent of the space was in Texas, according to JLL’s 2017 Grocery Tracker.
California, which saw growth from Aldi and Grocery Outlet, accounted for 11 percent of the space. The next three — North Carolina, Virginia and New Jersey — each accounted for 5 percent of the new space.
Residential growth is driving the expansion in Houston. The area registered a record number of single-family home sales last year and ranked second in home starts nationally behind Dallas.
The report highlighted trends such as grocers becoming “grocerants” by offering a hybrid of a restaurant and grocery store with prepared food sections. Technology that allows customers to save time is on the rise. Grocers are offering scan-and-go apps that allow customers to tally purchases before checking out and apps that let customers order online for store pickup.
While much of the growth in the Houston market is concentrated in the suburbs, grocers are starting to focus on denser developments and mixeduse projects closer to the city’s center.
“You’re seeing grocers in other parts of the country that are more property-constrained doing that,”
said George Kelemen, president and CEO of the Texas Retailers Association. “I would expect to see more of it in key urban centers across the state.”
In Bellaire, H-E-B will build one of its first twostory stores on the site of its recently closed location on Cedar Street. H-E-B will also be part of Buffalo Heights, a mixed-use development on Washington Avenue by Midway. The store is expected to have offerings such as a poke bar and a coffee bar to appeal to apartment dwellers in the development and other urban shoppers, according to the company.
Whole Foods will occupy the ground floor of Pearl Midtown West, an apartment mid-rise being built by the Morgan Group at 3120 Smith.
In the Heights area, 365 by Whole Foods Market will be part of a retail development at the northeast corner of Yale and Loop 610. The value concept, which is smaller than a typical Whole Foods Market, is expected to debut in Texas in Cedar Park near Austin next month.
Supermarkets will comprise nearly a quarter of the 5 million square feet of retail space projected to be built across the Houston area in 2017, according to Wulfe & Co., a Houstonbased real estate firm. Grocers plan to open 21 stores here this year, with most of the major chains adding locations, including Costco, Sam’s Club, Wal-Mart and Target.
Aldi, which has stores averaging 17,000 square feet, will open 10 stores this year, according to Wulfe & Co. The German-based chain, which has grown to 32 stores since entering the Houston market in 2013, will open next in the Fulshear and Pearland areas.
Lidl, also based in Germany, is expected to enter the Houston market as it expands to the U.S.