While retailers such as Bed, Bath & Beyond and Tuesday Morning are closing up shop, it might seem as if the retail sector is suffering.
But with the population of Fort Worth inching toward 1 million, that’s more mouths to feed, increasing the need for more grocery stores.
That is no surprise for retail watchers like Bob Young, executive managing director at Weitzman, a real estate firm that focuses on retail.
While many retailers are struggling, grocery is where it’s at, he said.
“Community centers, these are the daily needs centers anchored by a grocery store typically,” said Young. “Community retail saw occupancy climb to 95.2%. They attract regular customers, and that means a constant flow of income.”
While all retail-type centers are doing well in the Dallas-Fort Worth area, Young said, the grocery-oriented community centers are faring best of all.
“This is an extremely strong result for our largest category with 485 centers totaling 74.1 million square feet,” he said.
Despite pockets of food deserts in the region, the uptick in the need for grocery sites has worked in H-E-B’s favor as it makes its long-promised expansion in the Dallas-Fort Worth area, he said.
At the same time, some of H-E-B’s main competitors, Kroger and Albertsons, are awaiting a ruling from the Department of Justice about their proposed $24.6 billion merger.
The merger would put four competing brands – Kroger, Albertsons, Tom Thumb, and Market Street – under one umbrella in the North Texas market. Kroger has 218 stores in Texas while Albertsons has 65 with an additional 43 stores that sport the Tom Thumb brand.
“We’re watching that merger closely,” said Young. “It will have a big impact here, one of the most competitive grocery markets in the country.”
The market has shifted over the past 15 years, said Mark Newman, vice president for JLL’s.
“Fifteen years ago, Walmart wasn’t a factor. Now, with their supercenters and their Neighborhood Markets, they are a top player in the market.”
Newman notes that Walmart keeps investing in their grocery operations to remain competitive.
“They’re not standing still. They’ve added more pickup sites during the pandemic,” Newman said.
Other competitors are also adding stores, Young notes.
“Sprouts is adding locations,” Young said. “They are much smaller footprint stores, but they seem to find the right locations.”
H-E-B keeps building stores in DFW region
All these new sites are coming because of the population growth in North Texas, said Newman.
Newman said H-E-B’s acquisition of a site in southwest Fort Worth just off the Chisholm Trail Parkway is a case in point.
“Five years ago, there was nothing there,” he said. “Now, they can’t build homes fast enough.”
There is no timeframe for an H-E-B store in that location, according to Mabrie Jackson, a company spokeswoman.
The San Antonio-based grocer purchases land in anticipation of future needs, she said.
In September 2022 H-E-B opened a store in Frisco and followed that in November with a store in Plano.
Under construction in Tarrant County are H-E-B stores in Mansfield and one in the Alliance area of north Fort Worth. Both are expected to open in 2024. H-E-B already operates stores in Burleson and Parker County and, under the Central Market brand, in Fort Worth and Southlake.
Along with being a grocery store, H-E-B also operates home and garden centers and a top-rated barbecue restaurant, True Texas BBQ. That’s another differentiator for H-E-B: Its Texas roots.
“H-E-B is a brand unicorn with customer loyalty of almost mythical proportions,” said Allen Wallach, CEO of PAVLOV Advertising Agency.
Wallach said the grocer’s ability to deliver a true Texas experience gives it an edge over other brands, which may do a good job, but don’t have the distinction that H-E-B offers.
Aldi adding stores in Texas, Arizona and Florida
Aldi also is planning expansion in Texas as well, part of its nationwide expansion. The retailer plans to add about 120 new stores this year, primarily in the fast-growing states of Texas, Arizona and Florida.
With inflation taking a bite out of consumer pocketbooks, the German-based grocery, which puts a focus on low prices, has seen its sales increase. In 2022, nearly 400,000 Texas consumers tried Aldi for the first time, the company said.
“The influx of new shoppers over the past year shows what we knew to be true. People don’t want to spend more on groceries than they have to,” said Karla Waddleton, Aldi Rosenberg, divisional vice president, in a news release.
As all these grocers shift to gain advantage in one of the fastest-growing areas of the U.S., JLL’s Newman expects it will be good for the consumer.
“There will be competition here, no doubt about it,” he said.
Bob Francis is business editor for the Fort Worth Report. Contact him at email@example.com. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.