As of mid-April, various companies are set to vacate more than 90 million square feet of retail space in 2018. This new number comes in the wake of department store chain Bon-Ton being forced into liquidation. RadioShack, Payless ShoeSource, and Toys “R” Us have also filed for bankruptcy protection. And other companies are scaling back their U.S. presence, including Rite Aid, Subway, and Best Buy.
Suzanne Mulvee, a senior real estate strategist at commercial real estate services firm CoStar, predicts Bon-Ton won’t be the last company announcing new closings this year. This doesn’t mean all physical stores are going away, but it does represent a massive shift in the retail industry.
So what does the “retail apocalypse” mean for you? Whether you’re a retailer trying to figure out how and where to build or a city that’s relying on retail growth, Retail Attractions can help you answer this question.
More Space Available
The retail closings are going to free up large amounts of retail space. Some property owners see this as a good opportunity to fill the spaces with more profitable tenants. But with so much space available, getting new businesses moved in is going to be highly competitive. Communities and property owners will need to know how to market their retail spaces in a competitive market.
After having seen so many retailers go under, other retailers and restaurants are going to be much more cautious when expanding into new areas. And that means it’s going to take a great amount of initiative and a well-planned strategy to recruit them for your community.
Another way that retailers are expanding more cautiously is by opening small-format stores. The smaller stores let customers experience the products in-person but focus on being a hub for in-store pickup, easy returns, and local delivery. Target, one of the few retailers actually expanding in 2018, expects to open 35 of these small-format stores this year.
Two Categories Still Growing
Rickey Hayes, the founder of Retail Attractions, says, “Two categories that will continue to grow [are] restaurants and groceries.” Even though there are online sites getting in on grocery sales and delivery services that bring the ingredients for quick meal-prep to your door, they still can’t beat the physical locations for convenience. People want to inspect their produce before they purchase it and make sure their perishable items don’t spoil in shipping. And if you don’t want to cook there’s no way to beat the convenience of a restaurant.
Search For Better Data
If you’re a retailer looking for smart ways to expand in today’s retail landscape, you’re going to need access to better data for finding emerging markets. The dynamics of retail have changed. And figuring out exactly how that plays-in to your business isn’t easy to do on your own. That’s one area where Retail Attractions can be a huge asset for your business.
Here at Retail Attractions, we’re keeping a close eye on the emerging trends in retail. Whether you’re a community looking to attract retail or a retailer wondering how to move forward, you need someone with a wider view who is able to accurately predict what comes next. Contact us today to learn more about how we can help you get through the retailpocalypse.