Supermarkets in cities to face closures as online grocery rises

Supermarkets in town centres are more likely to be closed down in the future, compared to their counterparts on the edge of town, the latest research has revealed.

According to investment advisor Atrato Capital, town centre sites are less suitable locations for retailers to use when meeting the increase in online orders. As such, many of them could face closure, while other, more convenient, out-of-town branches open elsewhere.

Atrato stated that some of the town centre sites are under “threat” as trading transfers from physical-only to stores to stores that do online.

“Large town-centre supermarkets are not ideal because it’s very hard to do online from them and obviously it’s harder and harder for people to drive their cars to them,” said principal Ben Green.

READ MORE: Amazon plots 260 store openings in grocery ‘power play’

“If you take a typical regional town, with a ring road and arterial roads running in and out, the ones that work are on an arterial road, so you’ve got easy access to deliver to a large population both inside and outside the town.”

With a heavy focus on ‘future-proofing’ stores by adding omnichannel capabilities, Atrato Capital asserts that store-picking is the future of online grocery, claiming it is more profitable than fulfilling orders directly from warehouses.

The news comes as property consultancy Collier’s revealed within the UK Grocery Real estate Review 2022 that there has been a rise in supermarket opening activity among the Big 4 grocers after a period of inactivity.

Sainsbury’s opened three supermarkets last year but also closed sites in Andover, Portsmouth and Gloucester city centre.

Additionally, revamped sites in cities have adopted the “Neighbourhood Hub” format which are smaller Sainsbury’s Local stores, catering to diverse, nearby communities.

The data of supermarket openings come as Amazon unveiled its newest Fresh store in Southwark this week, joining a raft of 15 stores in London.

Supermarkets

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