Retailers Rising in 2025

The U.S. retail sector has proved its place as an investment standout in the past few years as supply has not been able to keep up with high demand. Despite these conditions, the retailers rising across the nation are in the grocery, dining, and discount retail segments. With the current retail vacancy rate across the U.S. at 4.1%, which has remained below 6.0% since 2021, retailers stand in a unique position for growth moving forward.

Grocers Remain a Top Performer

Grocery-anchored centers stand out from other retailers as they boast high occupancy rates and low tenant rollover. Another appealing factor for these properties is e-commerce, with online grocery spending in the U.S. rising since 2019.

Sprouts

Sprouts recorded visits for 2024 at 154.5 million, which is a jump from 144 million visits in 2023. Its top five markets for visits are located in California, with a store in Los Angeles recording the most visits at 939,000. In 2024, it opened 30 new stores that expand across 23 states. Sprouts recently announced its expansion plans for 2025, including new stores in Florida. The grocer will add seven new locations in the state, creating more than 600 jobs.

Trader Joe’s

Trader Joe’s has grown in recent years, with visits increasing by 20 million from 2023 to 2024. The grocer receives the most traffic from single consumers as they made up the highest percentage of its visits. Across the U.S., 26.5% of visitors between January to August 2024 were living in one-person households. With this uptick in activity, the grocer opened 34 stores in 2024. This year, it has plans to open 12 new properties, which will bring its footprint to 600 stores. Half of the new locations will open on the East Coast, but its other stores will be delivered in California and Washington.

Whole Foods

The Amazon-owned grocer is on track with its plans to open 30 new stores a year, and it currently boasts 75 locations on the way. Additionally, the grocer is experimenting with a smaller-store format—Whole Foods Market Daily Shop. These smaller properties, which range from 7,000 to 14,000 square feet, will feature a quick-shop format to meet the fast-paced needs of its customers. The first property opened in Manhattan during 2024, and the grocer has plans to open more smaller stores in 2025. Its new locations will meet its goal of providing customers with convenient options in urban areas as the new stores are planned for New York City and Washington, D.C.

Quick Service Expansion

The quick-service restaurant (QSR) industry has performed well, and it is expected to continue growing. Several QSR chains have consistently outperformed casual dining restaurants as consumers seek lower price points when dining.

CAVA

After a successful debut in 2010, CAVA reached over 300 restaurants nationwide in 2024, which expand across 25 states. It recorded an average unit volume of $2.6 million in 2024, growing from $2.5 million in 2023. The restaurant’s long-term goal is to have 1,000 locations by 2032, and it will also begin implementing a drive-thru system in some locations. There are already 38 CAVA properties with drive-thrus on the way.

Raising Cane’s

Known for its chicken tenders, Raising Cane’s has successfully expanded since 2023. It opened 100 new locations in 2023, and 118 restaurants in 2024. This year, the popular chain has plans to open more than 100 new stores across the U.S. The company’s CEO, Todd Graves, also stated he wants this momentum to continue in order to record $10 billion in sales by 2030.

Popeyes

Popeyes is owned by Restaurant Brand International(RBI), and the restaurant’s popularity allowed RBI’s sales to increase from $3.3 billion in 2016 to $6.8 billion in 2023. Now, it plans to open more than 4,000 Popeyes locations by 2028. To meet the increasing demand from its customers, Popeyes will begin implementing self-order kiosks and double lane drive-thrus in its new locations.

Discount Retailers Remain in Consumers’ Sights

Discount retailers have maintained success by offering quality products to consumers at lower price points. With inflation rates remaining consistently high in recent years, these retailers have provided a new outlet for consumers to shop for quality products.

Daiso

The Japan-based discount retailer made its U.S. debut in 2005, and now operates 120 stores throughout seven states on the West Coast. It remains an attractive option for consumers, due to its goods that range from $1.75 to $15.25. Currently, 100 stores are planned for delivery in 2025, and the company plans on having more than 1,000 locations by 2030.

Five Below

By year-end 2024, Five Below reached over 1,700 stores across 43 states. The company has grown since 2022, reporting an uptick of 15.7% in sales growth from 2022-2023. It currently plans to open 3,500 stores by 2030. To facilitate its expansion plans, Five Below emerged as one of the top bidders to take over Party City’s closed locations. It was able to secure 44 of Party City’s leases during the bidding process.

Dollar General

The discount retailer created competition for grocery stores by recording $31 million in sales for its consumables category in 2023. Since then, it has increased its store count to more than 20,000 locations. Throughout 2025, the retailer plans to open 500 stores, and it projects sales growth in the 6% to 6.7% range for the year.

Retailers must adapt to the tight retail environment in order to maintain stability. To do so, retailers can explore smaller-store formats or find new ways to meet their consumers’ needs.