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Donuts, Drive-Thrus and Fitness Chains May Transform Shopping Centers This Year

So, you don’t have a Starbucks in your shopping center? We thought you might like to know that it can still be profitable! These tenants, who are marketing to the same demographic, are intentionally teaming up and in turn are increasing visits to their shopping centers.

Photo Courtesy of CoStar.

Donuts, drive-thrus and ice cream may be the key ingredients to shopping center success across the United States in the next year. Companies looking to expand on the West Coast include the iconic Los Angeles-based Randy's Donuts.

Starbucks Drive-Thrus: Starbucks Coffee, one of the world’s biggest and most influential users of retail space, seeks to replicate its in-store experience for users of its drive-thrus.

It now derives about 60 percent of sales through its drive-thrus and related programs, allowing customers to pick up orders made in advance through its mobile app.

The chain not only is focused on adding more drive-thru locations, but on doing more to bring Starbucks’ in-store experience to those customers who won’t be leaving their cars.

Reports indicate Starbucks is experimenting with techniques such as enhanced screens and other technologies that let drive-through customers interact better with their "digital baristas."

Tenants Team Up: We are seeing an increase in a trend where tenants with similar target demographics- for instance, upscale gym chains, restaurants and spa service providers- speak among themselves before approaching the owner of a hot new retail center in the works.

Tenants like choosing their neighbors ahead of time, possibly bargaining for more favorable terms from landlords happy to bring in several desirable businesses in one swoop.

Donut, Ice Cream Chains Expand: Several companies like Randy’s Donuts, Dunkin’ Donuts, Handel’s Homemade Ice Cream & Yogurt and La Michoacana Premium are looking to grow their location count by bucking nationwide movements toward organic and healthier eating.

Fitness Chains See Opportunities for More Growth: Catering to post-donut regret, there’s a range of operators seeking to build out their franchise networks. They include StretchLab, geared to flexibility; Row House, emphasizing rowing machines; and Red Effect Fitness, which uses infrared lighting to keep workout sessions at a steady temperature of 80 degrees.

2019 CoStar.

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