Supermarket construction surges 42% since 2008

Supermarket development has surged 42% since the first half of 2008 with 41.22m sq ft of new space under construction at the end of the first quarter of 2011 according to research from CB Richard Ellis (CBRE).

Supermarkets are the only sector to see a sustained increased in construction activity according to the research. The property adviser said this has accelerated the shift in the non-food market share away from town centres. Almost 50m sq ft of supermarket space is estimated to be allocated to non-food.

CBRE director – retail lease consultancy Christopher Keen said: “In some markets the lack of alternative development seems to be resulting in some relaxation in planning attitudes towards supermarkets as they are often the only viable development option and can provide an invaluable boost to the local economy in the form of new investment and subsequently new jobs. 

“Supermarkets, because of the high levels of shopper footfall that they can generate, are emerging as a potent anchoring alternative to strengthen failing areas.”

The property adviser said that supermarkets were not reliant on speculative development funding to meet expansion requirements which puts them in a strong position to take advantage of vacancy increases in secondary markets and high streets, often trading from space that is no longer viable for non-food retailers. 

Despite the recent slowdown in non-food sales growth, the demand for additional modern, large supermarkets in out-of-town locations remains exceptionally strong and the primary focus of grocers’ expansion plans according to CBRE.