What might happen to all that retail space Bed Bath & Beyond may soon abandon?
What might happen to all that retail space Bed Bath & Beyond may soon abandon?
Bed Bath & Beyond filed for bankruptcy this weekend, as struggles with e-commerce and the pandemic just proved too much for the once ubiquitous staple of suburban shopping malls.
Barring an unlikely investor willing to resuscitate it out of bankruptcy, the retail chain says it’ll begin closing 360 locations across the country. But who exactly is gonna move into all those big, boxy storefronts?
Bed Bath & Beyond apparently didn’t have enough demand for high-thread-count sheets or kitschy welcome mats. But demand for their retail space may be pretty high.
“Strip malls in prime suburban locations are actually doing remarkably well,” said Ermengarde Jabir with Moody’s Analytics. “This actually gives retail landlords an opportunity to potentially raise the rent a little bit.”
Retail vacancy rates in most markets are actually lower than they were before the pandemic, according to the commercial real estate firm JLL — which is a Marketplace underwriter.
While companies may be ghosting office space, their workers are showing up in real life to buy actual everyday stuff — especially stuff that stretches their dollar.
“Marshalls, T.J. Maxx, Family Dollar, Dollar General, Dollar Tree,” said Naveen Jaggi of JLL.
Over the last decade, Jaggi said that discount stores have gobbled up the territory formerly occupied by the David’s Bridals and Bed Bath & Beyonds of the world — a.k.a. the declining retail middle class.
Inflation has only accelerated that trend. “The U.S. consumer has only so many dollars to spend, and if they’re gonna go spend it, they want to get as much bang for their buck as they can,” Jaggi explained.
If those empty Bed Bath & Beyonds are replaced by one of those stores with Dollar in their name, that could present some problems for the Barnes & Noble or Old Navy next door.
“I don’t want to make anyone upset at Dollar General, but you do want to be next to stores that have similar customers to you,” said Joe Goodman, a marketing professor at Ohio State.
Though Goodman conceded that any neighbor is typically better than an empty storefront.
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