The Future of Food Chains

CUSHMAN & WAKEFIELD

CON S U M P T I ON

The food-store sector also proved to be relatively unfazed by the outbreak of Covid-19, showcasing its resilience and robust performance. This re-affirmed the strength of the sector, with Supermarket performance also being lesser effect during the global financial crisis than its retail counterparts.

ALL RETAIL - ANNUALISED

THE FUTURE OF THE SUPERMARKET

30

Supermarkets have outperformed other retail assets over recent years, owed to relatively inelastic levels of demand, strong occupier covenants with typically long WAULTs, and the often direct link between rent levels and the pricing levels of the goods sold within them achieved through RPI- linked rental reviews.

20

10

0

-30

-20

-10

The sector as such has attracted strong investor interest, and consistently trades at a yield premium when compared to other retail assets.

Income Return Market Rental Value Growth Equivalent Yield Impact Total Return Mar 2001 Jun 2002 Sep 2003 Dec 2004 Mar 2006 Jun 2007 Sep 2008 Dec 2009 Mar 2011 Jun 2012 Sep 2013 Dec 2014 Mar 2016 Jun 2017 Sep 2018 Dec 2019 Mar 2021 June 2022

Source: MSCI , 2023

QUARTERLY TOTAL RETURNS INDEX BY SECTOR (JAN 2010 = 100)

ALL SUPERMARKETS - ANNUALISED

20000

15000

10000

5000

0

SEP ‘11

JUL ‘12

JUL ‘17

APR ‘11

SEP ‘21

SEP ‘16

FEB ‘12

FEB ‘17

JUN ‘15

JAN ‘15

JUL ‘22

APR ‘21

DEC ‘12

DEC ‘17

JUN ‘10

APR ‘16

OCT ‘13

JAN ‘10

OCT ‘18

FEB ‘22

AUG ‘19

MAY ‘13

NOV ‘15

AUG ‘14

MAY ‘18

MAR ‘19

DEC ‘22

MAR ‘14

JUN ‘20

JAN ‘20

NOV ‘10

NOV ‘20

Mar 2001

Jun 2002

Sep 2003

Dec 2004

Mar 2006

Jun 2007

Sep 2008

Dec 2009

Mar 2011

Jun 2012

Sep 2013

Dec 2014

Mar 2016

Jun 2017

Sep 2018

Dec 2019

Mar 2021

June 2022

Source: MSCI , 2023

All Property

All Retail

All Office

All Industrial

Supermarket

Income Return Market Rental Value Growth Equivalent Yield Impact Total Return

Source: MSCI , 2023

53 FUTURE OF FOOD CHAIN |