Sector Update: 

RETAIL

Due to the influx of millennials and the 

increasing influence of Generation Z

 

(who 

are just starting to come into adulthood), restaurant 

growth is driven by concepts that are hip, quick, healthy, 

specialized and require minimal waiting, no tipping and maybe 

even have their own secret menus (Cotton Candy Frappuccino 

anyone?). Chipotle, Raising Cane’s, Chick-Fil-A, Starbucks, Café Rio and 

others are aggressively expanding across Arizona, often to the detriment of 

the traditional fast food powerhouses and casual dining chains. It’s a race to 

establish their brand as the dominant in their category. Like the past, the trendy 

categories continue to evolve from many independents to a few chains, as we saw 

with frozen yogurt shops, fast casual burgers, quick serve customized pizza, and one of 

the newest concepts: quick serve poke cuisine. 

/// 

These younger generations like to eat out 

a lot, but they are more frugal and don’t care to spend much on clothing and other items. This, 

along with the growth of online sales, home delivery, and virtual or cloud-based products, has made 

it challenging for property owners to backfill spaces in many Class B and C retail properties. 

The bright spot today for new construction

 in Arizona is grocery store-anchored centers, 

which began in earnest in 2016. Fry’s started to roll out new stores for the first time in many 

years. Sprouts and newcomer, Natural Grocers, have also opened multiple new stores. Safeway 

recently announced several new stores and WinCo continues to pursue new sites selectively. 

The demand for shop space in grocery-anchored centers is more limited, so the new 

centers are generally smaller than in the past.  

Beyond food service concepts,

 health and wellness concepts are one 

of the few segments taking up small shop space. Concepts like Orange 

Theory, Pure Barre, Red Mountain Weight Loss, Gentle Dental and 

Nextcare take spaces that historically went to retail stores. 

///

 2017 

promises to be an interesting year at the very least, but we remain 

excited and optimistic for what this New Year brings.

CONGRATULATIONS 

Commercial Executive Magazine

 and 

Mandy Purcell

on 10 years of success and a tireless commitment to

the Phoenix commercial real estate market.

10

    YEAR ANNIVERSARY

9617 N. Metro Parkway W.  Phoenix, AZ 85051

602-944-0970 | 

www.metrocentermall.com