Beyond the Build

Construction Trends

Long Live Retail

Over the last decade, maybe even longer, retail has been an interesting case study. We’ve written a lot about bricks and mortar vs online sales and how that will affect our industry in the future. The pandemic heightened predictions that physical stores were set to become a thing of the past. It’s true that distribution centers or facilities that support online sales (the last mile) are one of the fastest growing segments in construction right now. Still, the vacancy rate for “bricks and mortar” retail is at a 15-year low.

I recently read an article titled, “Why the Retail Apocalypse Never Happened” that explains this phenomenon. A few take aways:

  • The one constant in retail is evolution to fit the needs of the current customer.
  • We have all learned that retail and online sales work in tandem with each other. Eliminating a physical footprint often has a negative impact on online sales, too.
  • The offerings at retail centers have become more diverse, often including medical options and lifestyle locations.
  • Freestanding shopping centers have a lot more flexibility than a fixed footprint mall and are therefore faring better.

I have noticed that office real estate is taking a page from retail and either converting to multifamily or getting more creative in their offerings for future tenants. Overall, I found the latest data encouraging. It’s exciting to see how we’ll continue to adapt and evolve.  Game on…

Merrill Stewart Jr.

Merrill Stewart is Founder and CEO of The Stewart/Perry Company, a commercial building contractor based in Birmingham.