Shares of grocery-anchored shopping center landlords slid on Friday after Amazon.com Inc. said it would buy Whole Foods Market Inc. in a multibillion-dollar deal that shows the internet retailer intends to become a formidable competitor in the grocery sector.
Kimco Realty Corp. fell 5.1%, DDR Corp. slid 4.5%, Regency Centers Corp. was down 4.4%, and Federal Realty Investment Trust shed 2.1% in Friday morning trading. The S&P 500-stock index was down about 0.2%.
Shares of grocery-anchored shopping center REITs have held up better than mall REITs in recent months, suggesting that grocery stores are more insulated from the rise of internet shopping and changing consumer preferences than mall owners are. Consumers typically make frequent trips for daily necessities to grocery-anchored centers, which often include other tenants such as laundromats and barber shops.
But Amazon's aggressive move into the market could be a harbinger of more change to come. Analysts have noted that while the internet hasn't taken a big slice of the grocery market yet, property owners can't afford to ignore the rapid pace of evolution in e-commerce.
Write to Esther Fung at firstname.lastname@example.org
(END) Dow Jones Newswires
June 16, 2017 11:31 ET (15:31 GMT)