“NEW DEVELOPMENT PARADIGMS AND TRENDS”
Retail Attractions, LLC
In our last two blog posts we discussed how local politics play a big part in retail and economic development for cities, especially when communities have to compete for every advantage in these days of growing expenses and declining revenues. As we mentioned before, the model for retail development in cities has changed radically. Much stricter guidelines and more scrutiny at each level of the process is resulting in far less growth and causing cities that need and desire to grow their retail base to think in new ways.
Gambling on the future is always a risky thing, but it has always been a part of the risk of development. Betting on the cycle is fun and profitable if you get it right, and a killer if you get it wrong. The good news is that there are some encouraging signs in the retail arena. Bookstores, and electronics retailers are suffering, but retailers like T.J. Maxx, Marshalls, Petco, and almost all the “dollar” stores are seeing strong growth. In some parts of the country, retailers are still struggling and the evidence indicates that consumers are still sensitive to pricing and that people for the most part are shopping for bargains and the greatest value for their money.
We are seeing some grocery growth across the region, and, because of the economy’s effect on the housing industry, many grocery chains are still very cautious and are taking advantage, as are lots of other retailers and restaurants, looking at 2nd generation space, infill, and redevelopment opportunities. In some markets, not in all, department store closings have created caverns in malls and in power and strip centers that have led to redevelopment challenges for owners. In certain areas, de-malling will benefit both owners and consumers as new retail growth creates new challenges to find exciting and more efficient shopping experiences for communities and consumers.
Across the board, there are many challenges to retail growth. Without healthy and sustained job growth, retail may survive but certainly new growth will be needed to cause it to thrive. Retail Attractions has always preached that new retail growth in cities gives them a boost in recruiting new job opportunities. Retailers are all concerned about internet sales opportunities, both in relation to their own increased sales, and negatively as to how those online sales pinch their traditional real estate models. New efforts to make the collection of sales taxes for city governments easier on internet sales may be good for cities, but they are increasingly becoming more tangled in the political winds at the federal level.
Last but not least, cities should not be shocked when retailers in many genres begin to downsize their boxes to become as efficient as possible. This is already happening in many of our client cities. Cities should assist retailers with all available means to help them improve their efficiency and over-all sales per square foot. Justice (a clothing outlet targeting girls aged 7-14), for example, plans to open 55 stores in the US, but also plans to remodel over 40 locations. Old Navy has already remodeled numerous stores to downsize and re-fit into smaller spaces.
Retail Attractions has relationships with retail and restaurant tenants and would love to help your community market itself to retail growth. Cities need to learn the valuable lesson of doing what they do best, which hopefully is building new infrastructure for growth, providing government services to their citizens, and creating proactive policies for growth and sustainability. Let a professional do the work of marketing your community to the national retailers. It’s more efficient, and more productive.
Contact us today to make a seemingly overwhelming task more manageable.