For the first time in years, retailers across the country are planning to open more brick-and-mortar stores than they are closing. Businesses are rebounding from the COVID-19 pandemic, dusting off expansion plans that were put on hold nearly a year ago. Retailers are eager to double down on brands that remained strong throughout the pandemic, and some are testing fresh concepts that can bring in new customers. Less-expensive rents due to numerous vacancies are making these opportunities irresistible to retailers and developers.
Year to date, retailers in the U.S. have announced 3,199 store openings and 2,548 closures. Last year, there were a staggering 8,953 store closures and only 3,298 openings as the pandemic hit, upending the retail industry and pushing many businesses into bankruptcy. As a result, vacancy rates for real estate increased while average retail rents decreased.
As vacancies are a headache for landlords, lease negotiations are better than ever. Not only are these factors enticing retailers to open up new stores, but also encouraging innovation. With rent not causing as much of a budget constraint as it historically does, retailers will have more wiggle room to try new ways of reaching and attracting customers within a brick-and-mortar store. (CNBC, 03.18.21)
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