Retail renewal: difficult, but not impossible
Aristotle proclaimed that nature abhors a vacuum. My father had a different idea. He believed that nature abhors an empty storefront.
There was a reason he felt this way. My father was a small commercial lease broker in Chicago. He made a living uniting pharmacies, restaurants, and appliance and clothing stores with owners who had available space in the shopping streets of the neighborhood’s shopping districts. Sometimes that was a really good deal: In the years after WWII, just about every presentable corner of town had a retailer who wanted to rent it. Other times it was a scene of stagnation: During the Depression years, landlords begged for retail tenants, and they were nowhere to be found.
Overall, however, retail leasing was a way to earn an honest living and support a middle class family. Vacant storefronts existed in Chicago and afflicted my father endlessly, but most of the time they didn’t last very long.
Now, of course, we live in an entirely different world. Neighborhood shopping corridors, like high-priced downtown areas, lack paying tenants. In a number of medium-sized cities, empty storefronts exist on almost every shopping block and dominate many of them. It’s no secret how this happened. The combination of digital shopping and the coronavirus has made it very difficult to continue physical activity, and this was especially true for family retailers, who have given up in alarming numbers.
Consultant Lev Kushner and urban scholar Greg Lindsay argue that downtown storefronts in large cities fill with “microfulfillment outposts, Essentially urban warehouses where customers drop by briefly to collect the goods they’ve ordered online or, more worryingly, where boxes of goods are stacked wall to wall and delivered to customers who have never put feet in the store. Some of these “dark stores” promise to deliver groceries to your doorstep in 15 minutes. For all intents and purposes, there is no one in the store. There is hardly anyone on the sidewalk either. Target recently announced that more than 90% of its sales in the fourth quarter of 2021 came from fulfillment buyers.
“As a glut of vacant storefronts plagued American cities even before the pandemic,” Kushner and Lindsay wrote, “dark stores are reinforcing these holes in the urban fabric by plugging them with services that displace the point of sale. from the street to the doorstep, discouraging the bustle that defines cities.
RISING GENERAL PROSPERITY WILL NOT SOLVE THIS PROBLEM as it did after WWII. If the storefront business is to survive, something else will have to save it. What could this something be? I asked this question in an essay last year. Consider this one as an update.
The most intriguing, but not entirely convincing, experience comes from Australia. It’s a form of tactical pop-up town planning, but with a slightly different angle. In 2008, the city of Newcastle (around 300,000 inhabitants) started contacting landlords with a new proposition: if they made their commercial space available for free to commercial tenants who wanted it, the tenants would take care of the utilities. and maintenance, and most importantly, bringing a renewed flavor of activity to a dying business corridor. If a paying tenant showed up, the non-paying tenant had to leave within 30 days.
The results of this Renew Newcastle the experience far exceeded expectations. The empty business districts of downtown Newcastle have filled with photo studios, toy makers, web designers, even an art gallery in a former men’s clothing store. In just a few years, the number of vacant commercial properties downtown has fallen by 60%; on some blocks it was 90 percent. More surprisingly, tourists started to come. As of 2015, there were 82 previously vacant properties in the program and 264 individual participants.
Renew Newcastle didn’t last forever. In 2019, he fell victim to a misguided investment in renovating the city’s train station and the program had to stop. But that was not the end of the story. Other cities have started to try similar experiences, and at this point Renew Australia is a viable and promising large-scale enterprise. It has over 200 projects underway in various cities across the country. The experience was slower to develop in the United States. But the city of Raleigh, North Carolina, has two programs in place to lure pop-up businesses to vacant storefronts at free or reduced rents. One of these companies resulted in a five-year lease signed by an art and clothing market.
All in all, it’s an admirable effort, but it raises some troubling questions about the kind of revival it fosters. The majority of tenants participating in Renew Australia are artists, designers or creative researchers of one kind or another. They do a pretty good job of bringing visitors and street life to the hallways where she had disappeared. But for the most part, they don’t bring hardware stores or drugstores or the other kinds of neighborhood businesses my dad used to recruit in Chicago. They aren’t exactly a magnet for local middle class families. Urban critic Joel Kotkin argued for years that you can’t create a full-fledged city revival with a range of artists and designers. You need a daily business that appeals to ordinary families with children. Renewal programs based on Australia’s do not appear to exist yet.
THERE MAY BE ONE IMPORTANT EXCEPTION: RESTAURANTS. It is true that the storefront restaurant industry was in turmoil even before the start of the COVID-19 pandemic, with mid-range establishments, often owned and operated by individual families, losing out to fine dining. on one side and fast food and fast casual on the other. And it is true that the pandemic has accelerated this trend. A market research firm, NPD Group, reported that the catering activity in restaurants had fallen by nearly 50% between 2019 and 2021. Last year, the group calculated, casual restaurants made four-fifths of their sales thanks to take-out, service at the wheel and on delivery.
Overall, those numbers don’t seem to herald a bright future for the family-run Italian cafe located on an urban shopping street with checkered tablecloths and photos of crooners on the wall. But people still want to eat out, including those with quiet dining and personalized service. They just want to do it outside. Restaurants ailing indoors found themselves winning back customers if they could set up on outdoor terraces or even a sidewalk facing the street. Local governments have cooperated by transforming parking spaces into dining areas.
Much of this outdoor boomlet, and the civic approval that came with it, persisted after the initial panic before vaccination subsided. It is impossible to predict how he will behave in the uncertainties of the present moment. But the evidence seems clear enough that with decent time and something interesting to explore, Americans still have a desire to experience the sidewalk that was at the heart of urban neighborhood life. On December 26, Boxing Day, it was unusually hot in my community in Northern Virginia. The streets were crowded with local residents – drinking coffee on the terraces, eating ice cream, browsing the local bookstore, checking rugs and quilts at a high-end household department store. None of this is to say that street trading is somehow back to what it used to be, or never will be. But it can survive if it’s smart enough to come up with the right product and the right format.
Meanwhile, the shift to remote working seems destined to continue pretty much unabated. Even if downtown offices return to in-person, full-time, or part-time employment, we will still have millions of middle-class Americans typing on computers or talking on Zoom calls from their home offices. A 2020 study by two economists from the University of Chicago postulated that 37% of all jobs in the United States could be done full-time remotely, and calculated that these jobs represent 46% of the country’s wages.
Even though they do much of their shopping on the Internet, remote workers will take breaks around the neighborhood, stop for a cup of coffee, a visit to the bookstore, or a trip to the pharmacy. If these places are attractive, home workers will frequent them. Despite the virus, the shopping streets of my remote-working daughter’s southern Minneapolis community have become a nest of busy cafes, sandwiches, and novelty stores. I am not saying that this renewal is a model for the future of urban neighborhoods. I’m just saying there’s a greater desire for it than we sometimes think.
My dad wouldn’t recognize all of this as sort of the business world he once operated in. But I’m pretty sure he would look there and tell me there are some great deals to be had.