Groceries and supermarkets do well during tough times
Businesses that serve to provide basic needs to customers will benefit from a level of 'insulation' from tough economic times, according to a leading retail executive.
Recently appointed CEO of Centro Steven Sewell said that grocery items, household goods and other non-discretionary products and services would always bring in buyers regardless of negative economic conditions.
He told The Australian on January 4: "Supermarkets are doing extremely well."
The strong focus on household necessities such as food and clothing as opposed to big-ticket items including plasma TVs and whitegoods could help investors interested in commercial property to align their practices with the prevailing market trends.
While the discretionary markets can offer businesses the opportunity to generate large profit margins when economic cycles are at a high, they tend to suffer when the consumers tighten their purse strings.
In contrast, while grocery items can be seen to offer modest returns, the demand is always there - making commercial real estate that suits this sort of retailer a solid option when times are tough.
Businesses that focus on consumables may also find that they can benefit from a change in location during slower times - gaining vital increases in public visibility and pedestrian traffic.