Grocery Store Feasibility Study in the Sacramento-Roseville-Folsom, CA Metro Area

Sacramento-area grocery loans run well above the national class norm: the $673,000 median is 1.91x the national figure, and the central loans range from $162,500 to $1.4 million. The file totals 42 approvals worth $39.7 million over FY2017 to FY2026. The area ranks 17 in a field of 412, the class holds 14 of 39 places locally and the location quotient is 1.19x.

Sacramento County and a single lender

Sacramento County, CA supplies 35 loans. U.S. Bank, National Association is the single bank named, at 7 loans and $4.5 million, which is a large average for the class. SBA shows 37 loans routed through 7(a) and just 5 through 504, so a grocer here usually borrows for equipment, inventory and leasehold work, and sometimes for an owned building. The franchise share is 0.00%, which fits independent and ethnic grocers.

Years, floors and what is hidden

FY2017 had 5 loans and $5.0 million, FY2021 8 loans and $9.6 million, FY2023 5 loans and $6.4 million, FY2025 6 loans and $3.4 million and FY2026 5 loans and $2.5 million. FY2018 through FY2020, FY2022 and FY2024 are hidden. SBA hides cancellation and charge-off rates as well, so the page has no loss floor, and hidden is not zero.

What a Sacramento grocery study must test

A grocery project is a thin-margin, inventory-heavy business, and a study should test it as one. The trade area needs households and income by tract, the competing chains and independents within a short drive, and the specific format: full-line, specialty, ethnic or small-box. Sales per square foot and shrink must be supported by something other than hope. Equipment, refrigeration and build-out are the main cost lines and belong beside the $673,000 median. Working capital for inventory should be funded in the plan. Check the loan payment against a slow ramp and a lower-margin case, since a few points of shrink can erase the cushion. The lender line is SBA's record of what the bank holds or held, and the study should also check whether the grocer can secure supplier credit, a produce and meat program, and clear permits for refrigeration and food handling before the lease starts. An appraiser should separate real estate, equipment and inventory from business value. The counties follow the July 2023 definitions.