Retail is recovering — and flowering — in smaller cities and the suburbs
Retail is recovering — and flowering — in smaller cities and the suburbs
Early in the pandemic, tons of stores and restaurants closed, especially in big cities. For many of those stores, closures were permanent.
Three years later though, retail in some places has recovered much more than in others — namely in smaller cities and the suburbs, according to a new report from the JPMorgan Chase Institute.
That’s where a lot of people moved early in the pandemic.
“The mass exodus of the cities, the migration south, the moves into the suburbs,” said Sonia Lapinsky at AlixPartners.
Big, national retailers have been paying close attention to all that too, she said. “Retailers have started to make some decisions on those trends. And when they have new leases up, they’re going to be making decisions based on where the consumer’s going.”
And while we know that people moved a lot in those early days, “what I think has been less clear is what’s happened since then and really understanding the persistence of some of those changes,” said Chris Wheat at the JPMorgan Chase Institute.
It now seems like a lot of those changes — where people moved and their work-from-home patterns — are sticking.
“All of those things are really playing an important role in shaping what’s happening with stores, both across the country and also specifically within neighborhoods,” he said.
Retail has bounced back much more in neighborhoods and towns, where a lot of people both live and work from home, and in downtowns in cities where more people are back in the office.
But in many larger, formerly office-centric cities, that’s not the case as much, said Sucharita Kodali at Forrester.
“Whether it’s San Francisco, or New York City, or Charlotte, North Carolina, a lot of the storefronts are either closed or there’s just not a ton of traffic,” she said.
Yet Kodali said that retail is doing well overall. That includes both online and physical stores.
“So we know that people are spending,” she said “And most of those people who were spending — taking their dry cleaning in at work or getting a coffee at 10 a.m. — are still doing a lot of that. They’re just doing it closer to their homes.”
So that’s exactly where stores and restaurants want to be.
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