Carrie Smith: How the ‘convenience factor’ is driving retail change

Coffee shops, car washes and dollar stores all part of the trend.

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  • | 12:10 a.m. October 18, 2022
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Starbucks Coffee says that 90% of its new stores will have a drive-thru.
Starbucks Coffee says that 90% of its new stores will have a drive-thru.
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By Carrie Smith | Senior Vice President of Retail Services, Franklin Street

If you’ve been inside a Jacksonville area Starbucks recently, you may have noticed some changes. 

Most stores in our area, and throughout the country, have traded in their comfortable lounge chairs and cozy jazz for an environment meant to get customers in and out. 

This new store model, designed for speed over ambiance, is the direct result of evolving customer preferences. While consumers began favoring convenience before the pandemic, the contactless environment created by COVID-19 accelerated this trend. 

During the pandemic, drive-thru orders accounted for more than half of Starbucks’ sales nationwide.

To accommodate for this shift, Starbucks recently announced that 90% of all new stores would have a drive-thru.

So, naturally, other brands have stepped up to compete with Starbucks in the North Florida market by employing a similar model. 

Scooter’s Coffee, Ellianos and Black Rifle Coffee Company are just some of the national coffee franchises expanding in and around Jacksonville, all banking on the idea that coffee lovers will pay a few extra bucks for high-quality coffee (when compared to lower-cost options like Dunkin’), as long as they can get it fast.

And coffee shops aren’t the only retail category being driven by convenience. 

 Car washes bubbling up

Jacksonville residents have probably noticed there seems to be a new car wash popping up on every corner. 

They are hard to miss – sometimes looking more like small water parks than car washes.

What you may not know, depending on your visit to these locations, is that most of these brands expanding in our area today are based on a membership model where customers pay a monthly fee for services, like a gym. 

Many offer several different pricing tiers that vary by level of service and number of visits, but most importantly, they are designed to be convenient. 

This is a trend we’re seeing not only in Jacksonville, but throughout Florida and across the Southeast. 

The bottom line is that this model has proven very profitable and developers and entrepreneurs have been eager to invest.

Most of the brands active in the Jacksonville market are buying their properties, although some are securing locations to ground-lease. 

In either case, these retailers are seeking highly visible locations along busy corridors and intersections that are easy to access on one’s commute home or while running errands.

These groups tend to look for an acre of land, and with multiple points of entry, so they are in direct competition with several other retailers, including fast-food drive-thru restaurants, banks and coffee shops. 

Ultimately, this type of competitive environment for land is driving up the price of dirt for developers and end users looking for lots in our market.  

Streamlined fast-food

When it comes to fast-food, the convenience factor is self-explanatory. 

But what’s interesting is that nearly all of the fast-food tenants our team represents throughout Florida are currently seeing sales at, or even well above, pre-pandemic levels. 

And it’s not just the usual suspects. We are seeing numerous new franchises enter the market, while others continue to expand.

This includes several new-to-market concepts, including Slim Chickens, Huey Magoo’s and Charley Cheesesteaks, which may not have been able to successfully compete in Jacksonville before the pandemic. 

Again, it all comes down to the convenience factor. 

We saw this happening before the pandemic, but it really accelerated at the height of social distancing.

Since then, consumer preferences have continued leaning toward speed, ease and less face-to-face interaction. 

Many fast-food brands have even streamlined their processes to add more efficiency with two-lane drive-thrus and order-ahead options.

We also are seeing some older fast-food buildings being demolished and redeveloped to meet today’s new design standards. 

Like car washes, fast-food franchises are facing tough competition for locations and historically high prices as a result. 

Properties with interstate visibility as well as outparcels at grocery-anchored shopping centers are in especially high demand. 

Dollar stores cashing in

Add one more player to the aggressively expanding list: the dollar store. 

These brands include Dollar Tree, Family Dollar and Dollar General, another retail category thriving in the North Florida market. 

The stores have continued to perform extremely well since the last recession. Consumers have found the convenience of their model and low price point a welcome addition to their normal routine, especially in today’s inflationary economic environment. 

While keeping prices low is, of course, key to dollar stores’ success, so are their locations.

These brands tend to locate in areas with few options for food or basic household items, therefore positioning themselves as the most convenient option for people who live or work in the immediate area. 

As the economy slows, we can expect dollar store sales and real estate activity to remain strong. 

In addition to convenience, another factor that ties each of these retail categories together is their ability to prevail through challenging and uncertain times. 

Land prices and rental rates for retail in Jacksonville have never been higher. Construction costs and supplies have never been more expensive or more difficult to obtain. And labor shortages remain an issue nationwide. 

However, from a commercial real estate perspective, the retail market is incredibly active and competitive within these four categories and many others as well. 

What this tells us is that despite inflation and other economic headwinds, consumers in Jacksonville haven’t stopped spending their money at brick-and-mortar stores and restaurants – especially the ones that provide convenience for today’s consumer.  

Carrie Smith is senior vice president of retail services, Franklin Street.



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