Donald MacLellan, senior managing partner, Faris Lee Investments: Yes, I believe more shakeups will happen. Whole Foods just announced it will be laying off about 1,500 employees and has created a new concept with more mainstream/affordable pricing. Fresh & Easy could very well completely exit the market in the near future. Fresh Market signed several leases and pulled out of the Southern California market with only a few stores operating.

One of the factors for the demise of Haggen was that many mainstream grocery stores are offering the gluten-free, locally grown, organic products at competitive pricing that in the past was a clear differentiator for the Haggen concept. These mainstream stores are stepping up their game in order to compete. Many customers—even in strong demographic markets—are still cost conscious and want to capture value as well as quality.

The grocery business has an extremely tight profit margin that is all about volume … if you can't capture that volume, you won't be able to survive. We are seeing continuing expansion with some niche concepts that are performing very well. Super King, which is a small chain in Los Angeles, is thriving. Other ethnic chains are also having success if they fit within their local market. Smart & Final continues to opens new stores, and Grocery Outlet is looking to grow its Southern California presence. Aldi will be entering into the California market soon, with plans to open 45 stores.

GlobeSt.com: What else should our readers know about this sector?

Terry: No matter the changes that the grocery sector will face, supermarkets still generate on average 1.5 consumer trips per week, according to the Food Marketing Institute. They will continue to be the main traffic generators for retail shopping centers for many years to come.

Voorhees: Increasingly, there is something for every shopper at every income level. The most-compelling models seem to be smaller-formatgrocers producing exceptional sales out of small-footprint stores, often in spaces that would traditionally lease for lower rental rates. That combination—high sales per square foot in smaller format stores producing lower tenant occupancy costs—is the sweet spot for retailers of doing more sales out of less square footage. A number of ethnic grocers were early to this trend and continue to produce excellent results.
We expect more and more specialization to come in the grocery category, including the return of specialty butchers, produce vendors, cheese shops and the like. In the beverage category, for example, this move is already underway nationally with retailers like Total Wine and BevMo! For consumers, this means more selection, more compelling offerings, and in many cases, better pricing than ever before.

MacLellan: Haggen is just one more example of a grocery store failing in the Southern California market. The store came into Southern California—a very large, competitive and mature market—and wasn't able to find its customer base fast enough. Succeeding in this market is certainly no easy task. It should be an interesting 2016 with the continued shake-up and competitive grocery-store environment.