Store perimeters are growing up to 50% faster than center-of-store categories, according to Food Market Institute expert, Larry Levin. Although rapid change is far from a foreign concept to the food and beverage industry, departments such as prepared food, produce, deli, cheese and bakery have taken a strong lead in recent years as drivers of both revenue and growth.
The driving force behind this expansion is the consumer. Research has shown that when choosing to eat at home, 80% of consumers want to make meals from scratch, often opting for the fresh, organic and “free-from” ingredients found along the perimeter of the store1. Today’s consumer is looking for convenience, clarity and quality.
Considering how to accommodate this shift in shopping behavior is critical to remain relevant and profitable. However, expanding product offerings often requires substantial changes such as remodeling the store arrangement, adding displays and department areas, or even increasing the store footprint to accommodate department growth – all which can present significant upfront investment challenges for your business. Many retailers are turning to leasing as a flexible funding option for large expansion or renovation projects.
Leasing can provide a budget-friendly solution that allows you to quickly respond to market demands while managing cash flow concerns. Without putting growth on hold, access the capital needed to make changes, purchase equipment, and even finance soft costs like construction. The availability of installation period financing means vendor deposits can be paid along the way to keep the project moving – and with no large upfront cash outlays on your part. Instead, 100% of project costs are rolled up into one easy monthly payment.
If you have recently completed a renovation project, or have one underway, consider a cash reimbursement, also known as a sale leaseback. Many retailers use this strategy to restore cash reserves in anticipation of future growth initiatives – preferring a low, predictable monthly payment spread out over time instead of a dramatic capital investment spike.
Explore additional information and case studies about how leasing solutions from First American can deliver the ability to expand your perimeters and your profit margins: http://www.fafoodandbeverage.com/expansionsandrenovations
1Russell, Julia. "FMI Connect: Capturing Retail Opportunities in Fresh Foods." SmartBrief. June 22, 2016. http://www.smartbrief.com/original/2016/06/fmi-connect-capturing-retail-opportunities-fresh-foods