Retailers will continue to need warehouse space, although some have successfully shifted the need to third parties. More >
In 2009, American retailers occupied more than 5 billion square feet of warehousing/distribution space. Although significant new leases are way down, retailers do continue to extend and/or renew their lease holdings. Many are attempting to downsize, but all are said to be reviewing their long-term warehousing strategies.
Marc Wulfraat, a transportation industry expert at TranSystems in Montreal, CA, suggests we look at the distribution strategy of Walmart, the world’s largest and most successful retailer, to better understand why retailers will still need distribution centers. “At last count, Walmart’s U.S. network consisted of 147 large-scale distribution centers, comprising flow-through general merchandise facilities, grocery distribution centers, fashion/apparel facilities and dedicated import facilities,” Wulfraat notes. “Walmart’s distribution centers are absolutely massive. The prototype general merchandise distribution center is 1.2 million square feet; the typical grocery distribution center is 880,000 square feet; and its largest import facility in Texas is 4 million square feet. Most of the distribution centers are an average of 125 to 150 miles from the stores—a huge competitive cost advantage compared to retailers who ship from farther away.” More >
Supply Chain/Logistics trends continue to evolve as retail sales remain uncertain and many retailers try to stay ahead of the supply and demand cycles. Anyone shipping, receiving or consolidating goods for first to third party is laser focused on the compression of profit margins. Additionally, user/occupiers of industrial space are examining methods to improve their P&Ls and drive down costs.
As we discuss strategic objectives with clients and review their portfolios to improve occupancy efficiencies, we are hearing common trends consistent with all types of industrial users. Some of the trends and best practices include: More >