Major grocers are buying more of their own stores in a bid to manage the risk of higher rents from high inflation. We believe this demonstrates how essential physical stores are to operators. Likely a positive move for supermarket property valuations.
Isabella Fish at The Times has today highlighted that Tesco has been buying back more of its own stores in recent years. It currently owns the freehold of 60% of their property portfolio, up from 44% in 2015.
A source in the article said “Property is even more valuable now to the grocers as customers are back shopping in stores while online sales have come off. Buying the freehold helps with lease debts and balance sheets and gives businesses more flexibility.”
Read the article here: https://www.thetimes.co.uk/article/tescos-supermarket-sweep-to-guard-against-inflation-rbkvqvsx8