A portion of the ULI 2018 Look Ahead keyed in on retail. Their commentary may best be summarized, “Retail isn’t dead, it’s just changing. Give it some time to adjust.”
In 2016, total retail sales approached $5 trillion, broken down:
$4.3 trillion from traditional, or maybe not so traditional, bricks and mortar transactions
$.5 trillion from Internet
$62 billion from the web, but being fulfilled by the bricks and mortar stores
So about 10% of the total was Internet sales, which will rightly continue to grow. Simultaneously, we’ll see an enhanced experience and entertainment value of bricks and mortar stores in the U.S. Going forward, the Internet and physical stores will continue to compete and complement each other, including the “last mile.”
As most of us know, the U.S. has the largest ratio of gross leasable retail per capita of any country in the world, at just under 24 sf per person. (Australia has 11 sf per person and Germany, being at the other extreme, is about 2.5 ft.) Maybe we are “over-retailed” a bit, which is some of the transformational aspect facing those in the industry.
On our radar, we have several retail redevelopments transforming existing bricks and mortar to the other types of retail, entertainment and commercial offices, all intermixed. The image above shows us razing a circa ‘60 a department store to be replaced by a cinema with full food and beverage offerings that will reposition the experience of this mall as a shopping and entertainment destination. As the markets change, so will we.