Brick and Mortar Retail is Not Dead

06.09.2017

(Rendering of Lidl's first US location in Fredericksburg, Virginia; courtesy of Business Insider)

Contrary to the news headlines you might see throughout the various reports on retail, brick and mortar is still growing at a steady rate. Overall retail market vacancy is down to 5.1% versus 5.5% this time last year per Marcus and Millichap research department. The overwhelming majority of this growth is certainly in the food and beverage sector as new and exciting concepts continue to roll out. The up and coming soft good retailers that are thriving are those tenants that focus on the unique in-store experiences, quality of product and sustainability. The traditional big-box retailers that are closing stores have not done a good job of differentiating their store experience. Instead, they are clinging to the idea that people will always shop their stores. Over the next couple of years, there are a few brands that are poised to take a lead in the retail category.

In the grocery sector Lidl, which is a German-based discount grocer, is set to open 100 new stores in their first wave into the US. In the food sector, assembly-line pizza is the latest crave with the two key players being Blaze Pizza and MOD pizza. Just think Subway for pizza. In the retail discount sector, Five Below has been one of the leaders in store growth this year with aspirations of 100 new stores by year-end. There are even a number of e-tailers who are in search of brick and mortar space and those include Indochino, Bonobos, Warby Parker and Casper mattresses. In conclusion, if you look a little deeper into the landscape of retail there are a lot more bright spots that could be highlighted by some really forward thinking operators. It is not all gloom and doom in the retail world.

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