Consolidation and increasing competition from discount retailers and superstores is not crimping the grocery store sector outlook, according to a new report from Marcus & Millichap.

Recent food inflation has been concentrated in restaurants, which if it continues, "should help maintain groceries as a focal point for consumers and keep foot traffic consistent," according to the report.

Grocery store vacancy has been posting in the low-2 percent band and the average asking rent is nearing its prior peak. Spending in each of the past 23 months through March accounted for 24 percent of all store-based retail sales, which "is facilitating standout property metrics," the report said.

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