Grocery Store Feasibility Study in Utah

Large grocery loans in an underweight class

Utah grocery loans are far bigger than grocery loans elsewhere, even though the class is thin. Between FY2017 and FY2026 the state posts 39 loans worth $47.7 million. The median of $763,000 is 2.17x the national grocery median, and the heart of the loan range spans $258,450 to $1.7 million. The class is 23 of 55 across the states, 18 of 39 inside Utah, and its location quotient of 0.49x puts groceries well under their national weight in Utah's SBA mix.

Programs and lenders

The programme split is 29 loans under 7(a) and 10 under 504, a healthy 504 share consistent with owned buildings. Franchise brands are 2.6% of loans. First Utah Bank alone clears the reporting level, with 7 loans worth $8.7 million, an average far above the state median. Salt Lake County has 14 loans, Utah County 7 and Cache 5, then Millard and Weber with 3 each.

A volatile record

FY2017 produced 8 loans and $7.6 million, but FY2018 only a single loan for $30,000 and FY2019 two for $520,400. Dollars then climbed to $10.0 million from 3 loans in FY2023, dropped to $338,300 from 3 loans in FY2024, and recovered to $5.8 million in FY2025. FY2026 closes with 6 loans and $9.4 million. Because tickets vary so much, a few stores shape each year.

Cancellations and no loss rate

Pre-funding cancellations reached at least 16.7% of Utah grocery approvals in FY2017 to FY2024, rising to 20.0% on the strict count. A charge-off rate is left out because the early funded set is thin, and the gap must not be taken for a clean record.

Testing a Utah store

A Utah grocery study has to size the household base in a short drive, then compare it against the stores already operating, including national chains and discount formats. With a median near $763,000 the budget may include property, so site cost and the store's sales per square foot must reconcile. Fresh food spoilage, labour and refrigeration are the lines most likely to break the plan. Show debt service coverage with a competitor opening nearby, and have an appraiser view the building as retail space that another operator could use. The thin location quotient may reflect competition from large chains, which the study should test directly.