While inflation showed signs of cooling in January, consumer spending took a hit. Due to this, shoppers are becoming more cautious. Naveen Jaggi, JLL president of retail advisory services, appears on Asking for a Trend with Josh Lipton to discuss the grocery sector's performance.
"The grocery sector is probably still the hottest sector in American retail today," Jaggi says. He highlights that grocery-anchored shopping centers are highly sought after by investors.
However, Jaggi warns that inflation concerns and rising construction costs are impacting the industry.
"The reality is today, if you want to do a grocery store deal, you'll have to pay the current rate," Jaggi explains. "The current rate means that the cost of construction, the cost of labor ... all of that is higher today than it was three or four years ago, and you can't expect it to come down, which means your rental cost goes up ... which means over time, that will have certain levels of inflation on certain products on the shelf."
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This post was written by Josh Lynch