The Future of Food Chains

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CUSHMAN & WAKEFIELD

CONSUMPTION

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

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.

-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.

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

Income Return Market Rental Value Growth

Equivalent Yield Impact

Total Return

Source: MSCI, 2023

TOTAL RETURNS MONTHLY INDEX BY SECTOR (MAR 2000 = 100)

ALL SUPERMARKETS - ANNUALISED

90000

80000

70000

60000

50000

40000

30000

20000

10000

SEP ‘11

SEP ‘17

SEP ‘14

JUN ‘12

JUN ‘21

JUN ‘15

JUN ‘18

DEC ‘13

DEC ‘16

DEC ‘19

DEC ‘10

DEC ‘01

SEP ‘20

SEP ‘02

SEP ‘05

SEP ‘08

MAR ‘13

MAR ‘19

MAR ‘16

DEC ‘22

MAR ‘19

JUN ‘20

JUN ‘03

MAR ‘01

MAR ‘10

JUN ‘06

JUN ‘09

DEC ‘07

DEC ‘04

MAR ‘22

MAR ‘07