Supermarkets

[Kontis]

Anyone own any? I know that national supermarkets - King Kullen, Super Stop & Shop, Pathmark, etc. make great tenants from a landlords point of view but I have met many groups of investors who have a chain of supermarkets - most specialize in supplying a specific type. One group has 5 markets who cater to the Asian population, they are so strong that they have a huge warehouse where they import their own goods.

I believe this is a solid investment if you specialize in a certain niche and gives your leverage against the Nationals. What are your thoughts - specialty? general? Do you know how they operate - get supplied if you don't bring the products over yourself?

These guys are liquid.

 

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[DeletedUser394]

Grocery stores have extremely low profit margins....I read that they are as low as 1-3%, so you'd need a high volume of consumers. :icon_super:

 

[hatterasguy]

The trick is boddies through the door, that spend money. I know someone who owns a couple of supermarkets and does well. As said above its a super low profit business.

I don't know the number of people he wants through the door, but he wants them to spend an average of $25 each before they leave.

Both of his stores are regular supermarkets like Stop & Shop, but they are in more expensive areas where the average income is $80k, and $120k. As such people happily will pay slightly more to avoid the big chains.

As far as a tenant, sure I'd rent to one in a heart beat. If they are good they tend to stick around forever, and its in their best interest to keep the place up.