A widening gap is reshaping the grocery sector, pushing shoppers toward either discount chains or premium fresh-format markets, leaving traditional supermarkets squeezed in the middle. According to a new JLL report, this "barbell" distribution marks the most consequential shift for grocery-anchored retail centers in years—one that's now determining which properties outperform the rest.
Discount grocer Aldi exemplifies the value-driven end of the spectrum. It was the fastest-growing U.S. grocery chain in 2025, opening 180 new stores and adding another 720 by the end of this year, while Grocery Outlet added 37 new locations.
Also, Aldi led in traffic growth, with same-store visits up 8.3%. On the premium side, Trader Joe's saw visits climb 10.4% and Whole Foods 9.8%, while Sprouts Farmers Market opened 39 stores. By contrast, Kroger ended the year nearly flat, with a mere 0.3% gain.
"The data confirms a two-track market where traditional supermarkets are being squeezed," said James Cook, Americas director of research of retail at JLL. He noted a pronounced "flight to value" among consumers, who are making "more frequent, shorter trips to manage budgets."
Private-label sales surged 30% from 2021 to 2025, reaching more than $282 billion, as nearly half of all shoppers opted for store brands.
Economic pressures underpin the divide. Food-at-home prices have climbed more than 30% since 2020, even as overall inflation eased to around 2.7%. Nearly 80% of consumers still report noticing grocery price increases, the highest among all retail categories. Wealthier households continue to spend freely on health- and wellness-oriented groceries, while middle- and lower-income families are turning to discount formats amid shrinking savings and rising debt.
For landlords and investors, these shifts have major implications. Grocery-anchored centers continue to outperform, with vacancies at just 4%, compared to 6.3% at non-anchored centers. According to JLL, they also command a 4.4% rent premium. Yet expansion remains concentrated, with 215 of 2025's 400 new grocery stores opening in the Southeast and additional clusters forming in the Mid-Atlantic.
Investor appetite is keeping pace. Transaction volume for grocery-anchored assets rose 42% last year to nearly $11 billion, with institutional buyers now accounting for 27% of acquisitions—the highest share in more than a decade. National cap rates fell about 40 basis points from their 2023 cyclical peak, averaging 6.7% by the end of 2025.
As Cook put it, grocery real estate success now depends more than ever on the strength and format of its anchor store.
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