Online shopping, high rents take a toll on US retail stores

By BELINDA ROBINSON in New York | China Daily Global | Updated: 2023-07-26 09:29
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A customer buys a drink inside the Starbucks Seattle downtown store on Feb 4. At the end of last year, Starbucks closed its store located at Broadway and Denny in Capitol Hill neighborhood, Seattle, citing safety and security concerns. CHIN HEI LEUNG/SIPA USA

Fewer new constructions

Across the country, the amount of new construction for commercial spaces was particularly low in 2022 for the third consecutive year, said the real estate company Coldwell Banker Richard Ellis, or CBRE, in California.

It fell 4.9 percent at the end of 2022, the lowest level since CBRE began tracking the market in 2005.

Some empty Bed Bath & Beyond retail spaces will be used by TJ Maxx, Home Goods and Ross.

Yet, despite a raft of problems in the retail sector, retail sales in June were up 1.5 percent this year compared with the corresponding period in 2022, according to the Census Bureau.

Rosenblum from Retail Systems Research cautioned against thinking a "retail apocalypse" will ruin all of the big-box stores.

"The death of stores was always overblown," she said. "The sociology of shopping here is fairly straight forward; if you want people to come to malls, you have to give them a reason beside stores."

Retail analyst Spiekerman agreed: "Big-box retailers are coping quite well under the circumstances. To be successful, retailers must focus on providing choices across convenience, price and offer multiple checkout options ensuring that retailers can engage a wide range of shoppers."

In the future, city centers in New York and malls in states such as Florida will need to transform to win back lost customers, analysts say.

"Malls have to do a better job of giving customers a reason to go besides the anchor stores," Rosenblum said.

"When malls were in their glory days, they used to have rock concerts. People would go to the mall and bring their beach chairs and sit down … There's a social element to the mall that has to be recaptured."

US cities are putting plans in place to make downtown areas more accessible to shoppers by creating more room on sidewalks, widening bicycle lanes and reducing traffic.

In New York, the mayor wants to redesign Fifth Avenue, the luxury shopping street, by reducing traffic and widening sidewalks to encourage more pedestrians.

In San Francisco, the Public Realm Action Plan by Sitelab Urban Studio for the Downtown SF Partnership, has called for the "doom loop" of downtown to be transformed with art, food, pop-up stores and shows.

Rosenblum said a series of developments could also entice people back to malls in Miami.

"Somebody is building a mall in Miami, and they are going to put a ski slope in it. Then someone else is going to put a pickleball court in the middle of one. That's quite a clever idea," she said.

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