Grocery Store Feasibility Study in Arizona

Few grocers, but large ones

Arizona grocery lending is unusual for its scale per loan rather than its frequency. The location quotient is only 0.32x, grocery stands 23 of 39 among classes in the state, and Arizona ranks 30 of 55 for grocery loans, so supermarkets and food markets are a small part of what SBA finances in Arizona. But the median loan of $699,000 is 1.99x the median for grocers nationally, and half of the loans fall between $272,500 and $1.6 million. In total, 27 loans from FY2017 to FY2026 add up to $28.2 million gross. The pattern says that Arizona grocers who borrow tend to buy or build real stores, not just refit a corner shop.

Programs, counties and timing

The program mix supports that reading, with 7 loans in the 504 program that suits land, buildings and heavy equipment, beside 20 in 7(a). No franchise appears (0.00%), so every borrower is independent or a small regional operator. Maricopa County has 11 loans, Pima 5 and Pinal 3, with Gila and Yavapai at 2 each and Cochise, Mohave, Santa Cruz and Yuma at 1 each. Approvals were scarce for most of the early years, with 1 each in FY2018, FY2019 and FY2020, then rose to 5 in FY2023 and 6 in FY2024. No lender table is printed for this cell, so no institution can be named as a leading source of grocery credit in the state.

Silent outcome columns

For Arizona grocery the outcome rates are absent. Too few loans feed them, a count too low for a percentage to mean anything, and the empty cell is neither a zero nor a clean bill of health. Elsewhere on the site a printed rate is a floor, because open loans can yet default.

What an Arizona grocery study has to test

A grocery plan in Arizona is first a question of trade area geometry. Population grows quickly in parts of the state, but it is spread over long distances, so the study should measure households by drive time from the site, the existing stores serving them, and whether the neighborhood is under- or over-supplied with fresh food. Desert heat raises refrigeration and energy costs, and these belong in the operating budget explicitly. Against a median of $699,000, cost lines should cover land or lease, building or tenant improvements, equipment and opening inventory. Coverage must hold on thin grocery margins, and a loan sized for a real store will want a conservative case. An appraiser will value the site and building together with the income, so the sales forecast needs support.