[Rainger99]

Originally Posted by Bogie Shooter

I think he does.
From your link.

What about the claim The Villages charges higher-than-average market rates for rent?

That’s another myth; that The Villages charges too much rent for businesses to be able to survive. Every business knows the terms of their lease before signing a contract, and has included that in their pro forma. Any rent escalations are defined from the outset and are either fixed or tied to the federal Consumer Price Index. So there are no surprises on either end. There are properties within The Villages that require higher rents than others, but also many properties in the community that we do not own charge higher rents than we do.

The question was “What about the claim The Villages charges higher-than-average market rates for rent?”

He doesn’t say that they don’t charge higher than average market rates. The question wasn’t whether the villages charges too much rent for businesses to survive. Obviously businesses do survive.

He says that it is a “myth that The Villages charges too much rent for businesses to be able to survive.” A tenant might be able to survive paying higher than average rents - but may still be paying above average rents.

The guy’s ability to not answer the question shows that he should be in politics. If you don’t like the question, give a non-answer that appears to be an answer.

[Laker14]

Originally Posted by Rainger99

The question was “What about the claim The Villages charges higher-than-average market rates for rent?”

He doesn’t say that they don’t charge higher than average market rates. The question wasn’t whether the villages charges too much rent for businesses to survive. Obviously businesses do survive.

He says that it is a “myth that The Villages charges too much rent for businesses to be able to survive.” A tenant might be able to survive paying higher than average rents - but may still be paying above average rents.

The guy’s ability to not answer the question shows that he should be in politics. If you don’t like the question, give a non-answer that appears to be an answer.

He should have attacked the question. "Average rent?" What is "average". We all know that the value of real estate is entirely based upon its location, hence the appropriate rent is also. So when we are talking about "average" rent, are we comparing the rent that Red Sauce pays per square foot, in Lake Sumter Landing to the cost per square foot in a strip mall between TV and Ocala?
Are we assuming that Winn Dixie pays a lot more per square foot in LSL than it will on the corner of 466A and Micro Race Track Rd? Well, what do you think the value of that real estate is now? 15 years ago it was not much, but today? It may well command just as much, if not more, than LSL due to the higher traffic flow and access for non TV residents.

I agree with you that he didn't answer the specific question. But he did a good job of explaining that the rent charged is not why businesses fail. They fail because whoever put the business plan together made a miscalculation of how attractive and profitable their enterprise would be, based upon the rent and the traffic flow that location would provide.

I had a colleague who put his dental practice in a mall. This was in the late 1970s when malls were still attractive for shoppers. The rent was high, but the traffic flow was tremendous. It didn't work for him because the mall traffic wasn't what you wanted to build a dental practice around. He got a disproportionate amount of walk-ins, rather than folks who were looking for a "dental home". Who wants to drive to the mall and park a half-mile away for a dental appointment?
My point is that the mall wasn't charging too much rent for its space. Heck, the hot pretzel shop right next to him was there for 30 years. The failure to put a business appropriate for the location was entirely his fault.
BTW, he moved his practice about a mile to a single building off of a busy road with an appropriately sized parking lot and had a fabulously successful practice and career.

[ROCKETMAN]

Originally Posted by Papa_lecki

To continue the wonderful posts about shopping and grocery stores in the various parts of the Villages, Winn Dixie is building a new store on 466A, at Micro Race Track Rd.

By my count, there are 4 grocery stores within a mile of that intersection on 466A, not counting the 2 Publix on 44.

Why not put the new store in the South area?

There will be at least 1 more Publix built closer to the 4th town square. There already is one built further south of 44.

[ROCKETMAN]

Originally Posted by Papa_lecki

To continue the wonderful posts about shopping and grocery stores in the various parts of the Villages, Winn Dixie is building a new store on 466A, at Micro Race Track Rd.

By my count, there are 4 grocery stores within a mile of that intersection on 466A, not counting the 2 Publix on 44.

Why not put the new store in the South area?

If your rent is to high why is there a 97 per cent occupancy rate for existing commercial sites.

[retiredguy123]

Small rental spaces at the Trailwinds shopping center is being advertised at $30 per square foot per year. I'm sure that Publix is paying less than $30, but, even if they were, their annual rent for the 50,000 SF store would be about $1.5 million. That would be about 4 percent of the gross sales income for an average Publix store of $38 million. So, I don't think Publix is concerned about paying the rent.

[JMintzer]

Originally Posted by retiredguy123

Small rental spaces at the Trailwinds shopping center is being advertised at $30 per square foot per year. I'm sure that Publix is paying less than $30, but, even if they were, their annual rent for the 50,000 SF store would be about $1.5 million. That would be about 4 percent of the gross sales income for an average Publix store of $38 million. So, I don't think Publix is concerned about paying the rent.

The average grocery store chain has a profit margin of just over 2%. So yeah, I think they're concerned about rent...

[Laker14]

Originally Posted by JMintzer

The average grocery store chain has a profit margin of just over 2%. So yeah, I think they're concerned about rent...

With a 2% profit margin, you don't have to be very far off on your calculations to sink your ship, do you?

Maybe that's why so many of the grocery store brands we grew up with are gone.

Wegmans is big in my neck of the woods (Upstate NY) and their model seems to be to own the real estate and rent out a few store fronts connected to the Wegmans anchor. I'll bet they get top dollar for those sites.

[Papa_lecki]

Originally Posted by JMintzer

The average grocery store chain has a profit margin of just over 2%. So yeah, I think they're concerned about rent...

Publix Gross Sales were $48 Billion

In addition to its net sales growth, Publix reported $4.4 billion in net earnings for 2021, up from the $4 billion profit it logged in 2020. Gross margin for 2021 was 27.7%, compared to 27.9% in 2020. After excluding the last-in, first-out (LIFO) reserve effect, the decrease was primarily due to increased shrink and distribution costs, the company said.

Publix boosts capital budget for 2022 | Grocery Dive

[Laker14]

Originally Posted by Papa_lecki

Publix Gross Sales were $48 Billion

In addition to its net sales growth, Publix reported $4.4 billion in net earnings for 2021, up from the $4 billion profit it logged in 2020. Gross margin for 2021 was 27.7%, compared to 27.9% in 2020. After excluding the last-in, first-out (LIFO) reserve effect, the decrease was primarily due to increased shrink and distribution costs, the company said.

Publix boosts capital budget for 2022 | Grocery Dive

Your numbers illustrate that it's a big business. Closer to 10% profit margin? How does 4B in earnings, on 48B in sales =27% margin?

[retiredguy123]

Originally Posted by Papa_lecki

Publix Gross Sales were $48 Billion

In addition to its net sales growth, Publix reported $4.4 billion in net earnings for 2021, up from the $4 billion profit it logged in 2020. Gross margin for 2021 was 27.7%, compared to 27.9% in 2020. After excluding the last-in, first-out (LIFO) reserve effect, the decrease was primarily due to increased shrink and distribution costs, the company said.

Publix boosts capital budget for 2022 | Grocery Dive

I'm confused. Is the profit margin 2 percent or 10 percent or 27 percent? But, in any case, I don't think the rent payment for Villages vs non-Villages properties is a significant factor.

[JMintzer]

Originally Posted by Papa_lecki

Publix Gross Sales were $48 Billion

In addition to its net sales growth, Publix reported $4.4 billion in net earnings for 2021, up from the $4 billion profit it logged in 2020. Gross margin for 2021 was 27.7%, compared to 27.9% in 2020. After excluding the last-in, first-out (LIFO) reserve effect, the decrease was primarily due to increased shrink and distribution costs, the company said.

Publix boosts capital budget for 2022 | Grocery Dive

Which has nothing to do with the success/failure of an individual store...

[EdFNJ]

Originally Posted by JSR22

It's 3 miles.I live closer to the Colony Publix, but shop at the Tailwind's Publix because there aren't any golf carts in the lot.

BINGO! THIS!