Last week, I was able to attend one of the regional food shows that Nash Finch put on. Nash Finch is a conventional grocery distributor that serves quite a few independent retailers in communities in thirty six states. (http://www.nashfinch.com/)
While at the show, it was an honor to get to sit in on a presentation, mostly done on the fly, by Alec Covington, the CEO of Nash Finch. (Many of us in the natural products industry remember Alec from his time as the CEO of Tree of Life.)
Alec shared from his heart about the economic challenges that the country is facing and how those challenges are affecting independent grocery retailers. His insights were quite informative, but with far too much detail for me to try to forward the bulk of them without doing injustice to them. Even though his comments were directed to his customers, the independent grocers in the session, I felt that they were applicable for natural products retailers, or any independent businessperson.
The one thing that he touched on that I did want to relay was the potential opportunity for retailers to turn from tenants into property owners!
The basic premise behind his comments was that the property that a store is renting is probably worth less now than it was when the lease was signed. The “ah-ha” question: “Has your rent gone down to reflect that?”
Alec shared his expectation that many of these commercial property owners are going to have to redo their mortgages – and that will create open doors for retailers to buy their buildings instead of renting them. What a great idea! Your location is no longer an expense, but an asset!
In the week since I heard him share these ideas, I have visited with a number of retailers who have done this - bought the building where their store is! I have also talked with a couple of natural products brokers who have bought their office buildings! (That is pretty exciting – having your building pay for itself via the rent from other tenants!)
Some retailers have found that by finding alternative locations, that they have been able to negotiate a reduced rent for their current location!
There are some opportunities out there in the changing world in which you are operating! You may be able to find a way enhance your business and lower your costs by exploring things in this area.