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Las Vegas robust market for groceries, with many new stores planned

Updated June 21, 2024 - 12:57 pm

Numerous grocery stores are in the works for the Las Vegas Valley and the region has room for many more, experts say.

Las Vegas is arguably the best expansion market for grocery stores in the U.S. right now, said Burt Flickinger, managing director of retail consulting firm Strategic Resource Group. The fact Las Vegas has been an underserved market for grocery stores in recent years and its growing population make the area primed for expansion, he said.

“Las Vegas and Phoenix are the two most powerful expansion markets anywhere in America, and will continue to be so for the foreseeable future, as long as there’s enough water conservancy for power, industry and residential,” Flickinger said.

Recent expansions range from big box chains to health food and international and discount brands. Sprouts Farmers Market opened two valley stores in 2023; Costco is building a store in southwest Las Vegas; and Smith’s is in the process of opening two more locations in Southern Nevada. Other stores such as discount grocery Aldi, Korean grocery H-Mart and Asian supermarket chain 99 Ranch Market have plans to enter the market.

Grocery stores are continually looking to expand in the Las Vegas Valley as the region continues to grow its diverse population. And the growth is showing no real signs of slowing down. Clark County’s population grew by 3.1 percent from 2020 to 2023, to 2.34 million people, according to the latest data from the U.S. Census Bureau.

A new UNLV report projects about 450,000 people could be added to Clark County’s population in the next decade and by 2034 the county should have roughly 2.8 million residents.

“Grocers, specifically, are looking for rooftops,” said Isabella Sorrentino, a senior associate at ROI Commercial Real Estate, who helps oversee leases for Sprouts in Las Vegas.

The Las Vegas grocery market is very strong across many different concepts, she said. Store volumes range from $330,000 to $1.5 million in sales a week, depending on each store’s size, which is creating demand for brands to expand.

“​​It’s a good time to be a landlord,” Sorrentino said, noting that leases for grocery stores have risen by anywhere from 50 to 66 percent compared to 2018 leases.

Las Vegas is ‘crucial’

The Las Vegas Valley is “crucial” for Kroger Co.-owned Smith’s and makes up a third of the brand’s total business, spokesperson Tina Murray said. Smith’s has 46 stores, a distribution center and roughly 980,000 weekly customers in Clark County, she said. 

“That reach and scale was the catalyst for having a full-line distribution center located within the county to supply our stores and our customers with the freshest products,” Murray said in an emailed statement.

But it’s not just established brands like Smith’s and Costco that are investing in Las Vegas.

The speciality Korean grocery brand H-Mart is working to open its first store in Las Vegas and to add to the diverse number of international grocery stores Las Vegas has to offer.

Also in the past year plans have emerged for German discount grocery chain Aldi to add at least two stores in the Las Vegas area. California-based discount grocer Superior Grocers opened its first non-Golden State location in the area and the deep discount brand Grocery Outlet Bargain Market opened its first Las Vegas location in the Blue Diamond area.

All this activity points to Las Vegas being a robust metro grocery market, said Layla Kasha, chief growth officer for Grocery Outlet.

“This is not a small town that’s going to support one or two grocery stores,” she said.

Since the Grocery Outlet opened in August its performance has been strong enough for the company to consider adding more locations, Kasha said. She also said that since many people move to Las Vegas from other areas it has helped the company get a quick start to its operations.

“There’s a lot of folks that know Grocery Outlet from living in California or in another part of (Nevada),” Kasha said.

The diversity of Las Vegas’ population also is a plus for Sprouts since many West Coast transplants know the brand, but there is still enough people who don’t know the brand for Sprouts to add new customers, said Cory David, a Sprouts regional vice president, who oversees the Las Vegas market.

More Las Vegas growth

Both Sprouts and Grocery Outlet said they are looking to grow by 10 percent each year.

David said Sprouts is considering adding more locations in Las Vegas but didn’t have details on how many. He said the company is looking for neighborhoods with high-growth potential.

Murray said Kroger considers future population and job growth in areas it wants to add new stores and if a new store fits near existing locations.

Grocery Outlet is looking to add three to four Las Vegas locations to establish the area as a cluster for the company, Kasha said. More Grocery Outlet locations could open in the next 12 - 14 months in areas with an established retail presence and should replace some of the closed 99 Cents Only store locations.

“We’re looking, usually for high-traffic areas with good co-tenancy,” Kasha said. “We want not similar retailers, but affinity retailers, so people that would shop for us, likely shop at T.J. Maxx or a Ross.”

But growth potential isn’t unlimited. A west Las Vegas Vons location closed in 2023 and the 18 Las Vegas area 99 Cents Only stores have shuttered as part of a national closure.

Even with some closures, Las Vegas should continue to be seen as a desirable grocery store market due to its growing population, said Steve Neiger, a retail specialist broker and principal at Cast Capital Partners.

“Things can go wrong, but population growth can make up for it,” Neiger said.

If a grocer is cutting back on its presence in Las Vegas it’s more likely the company is struggling internally rather than the Las Vegas market can’t support a location, Neiger said.

“Brands wouldn’t come here unless they think they can succeed,” Neiger said.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on X.

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