REAL ESTATE NEWS

While the Q3 earnings cycle painted a mixed picture across discretionary categories, one segment stood out with remarkable consistency: big-box discount and value retail. Despite noise about the strength of the consumer, isolated closures and soft discretionary spending, value-driven operators are expanding, upgrading stores and increasingly moving into grocery and essential goods — claiming ground once reserved for traditional supermarkets.

As a result, the widely reported “K-shaped economy” is driving a reordering of what qualifies as essential retail heading into 2026.

Value Big-Box Retailers Expanding Faster Than Many Realize

Starting with Costco, a household name associated with big-box retail, is planning 35 new warehouses in the full year 2026 — one of the retailer’s largest expansion years in a decade.

CEO Ron Vachris reaffirmed: “We continue to see significant opportunities for expansion across the markets where we operate.” Walmart, which announced plans to position itself as a logistics and e-commerce powerhouse, plans to build or convert more than 150 U.S. stores over the next five years.

The biggest surprise from this earnings season was TJX (owner of TJ Maxx, Marshalls, HomeGoods), which is opening roughly 130 new stores in the next 12 months, alongside long-term plans for 1,300-plus new stores globally. Many analysts expected moderation — yet TJX continues to build aggressively, underscoring its confidence in physical retail and a long runway for off-price growth. Even retailers like Target, whose stock price has been under pressure, remain in expansion mode within high-growth markets, particularly through their small-format concepts.

Some additional brands with planned expansions include: Ollie’s Bargain Outlet, Ross & DDs Discounts and Dollar General.

Traditional Grocery Is No Longer Uniformly Stable

For decades, grocery-anchored centers were viewed as the safest asset class — but Q3 commentary paints a more nuanced picture. Kroger announced closures of around 60 older stores, driven by factors such as aging locations, shifting demographics and competitive overlap. Albertsons announced the closure of roughly 30 underperforming locations, opening fewer in their place.

While grocery demand remains strong, the competitive landscape has changed. Walmart, Target and Costco continue to capture more market share in grocery, consumables and essentials — blending discount value with full-basket shopping. Discount players aren’t just absorbing general merchandise spend; they’re making gains on the grocery section, the core of essential retail.

CRE Winners Must Align with Five Takeaways

Here are some of the critical takeaways:

• Discount big-box is the most reliable tenant class in retail.
• Grocery-anchored stability must now be evaluated banner by banner, not as a universal truth.
• High-quality big-box sites will see increased competition, especially in high-growth markets.
• Expect value operators to backfill failing big boxes, accelerating the shift toward essentials-focused centers.
• Discount plus grocery equals essential retail — formats like DG Market and Aldi confirm this convergence.

Bottom line, the most important Q3 takeaway from these retailers isn’t the strength of the consumer — it’s that discount-driven big-box retailers are expanding, absorbing grocery spend and redefining essential retail in America. For 2026, the retailers driving the most traffic, opening the most stores and seeking the most real estate are overwhelmingly value-based.

Source: GlobeSt/ALM