MHD INDUSTRIAL PROPERTY
THE FUTURE OF GROCERY LOGISTICS As the largest grocery logistics landlord in Australia, Charter Hall is powering the food and grocery industry at a time of unprecedented growth. Matthew Cox, National Industrial Delivery Manager for Charter Hall explains how the sector has been disrupted by the digital economy in the past 18 months, and why automation will supercharge the online grocery space in the future.
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ver the past financial year and during the pandemic, the food and grocery sector has observed record growth in Australia, as consumers reduced their discretionary spending and focused primarily on essential goods amid uncertain economic conditions. “The Australian retail sector is worth about $340 billion according to the Australian Retailers Association, and the supermarket, grocery and fresh food market make up nearly a third of that landscape,” says Matthew Cox. “It’s the single biggest part of the Australian retail landscape and the most resilient. It is why Charter Hall Group has made a substantial investment in this sector and has focused on partnering with tenant customers that need both bricks and mortar retail outlets and supply chain 42 | MHD NOVEMBER 2021
logistics facilities to ensure the success of their business models.” Charter Hall’s substantial portfolio is occupied by major supermarket players Coles, Woolworths, Metcash and ALDI, in addition to other prominent food and beverage manufacturers who supply these supermarket players including Ingham’s, Coca-Cola Amatil and Arnott’s. Purely online prepared food companies, like Marley Spoon are also part of the portfolio and in a business segment that is growing strongly. For the 2020-21 financial year, 40 per cent of Charter Hall’s record $10 billion transactions were sale and leaseback arrangements, with 24 per cent of those being in the food and staples retailing sector. Those businesses strategically chose Charter Hall to be their long-term
property partner and landlord. Matthew explains the dynamics of this sector have been significantly disrupted by the pandemic. As consumers re-evaluated their shopping habits and looked for ways to reduce their time in supermarkets, online grocery retailing has spiked in popularity. This includes shoppers using “click and collect” services and delivery direct to their homes. “Market growth within the online food logistics sector was prominent for two or three years before COVID, but the pandemic really supercharged this trend,” says Matthew. “In 2018, it only made up two or three per cent of the market, and people were sceptical that it could expand much further. But since COVID, online grocery sales have grown
