Shoppers are opting for fresh air over Fresh Direct, and storefronts are opening back up.
New data shows customers returning to shopping centers are bringing a windfall for US landlords, who leased 17 million square feet of space during the third quarter at strip malls and open-air shopping centers — up 49% from 2019 according to real-estate firm CBRE.
Grocery on the Grow
Unlike traditional malls that use big department stores like Macy’s to drive foot traffic, grocery stores are the central lure of strip malls and newer, town-center style outdoor malls.
Combine the fact those grocers at strip malls didn’t close during the pandemic with a massive flight to the suburbs, and it’s the perfect recipe for newly suburban millennials to find ingredients for their homemade sourdough:
- Foot traffic at grocery stores in the US is up 3.6% in 2021 next to pre-pandemic numbers while e-commerce accounts for just one-fifth of core retail sales since COVID hit.
Grocery-driven malls drew $5 billion in investment activity in the third quarter, making it the second-most active in 10 years, according to CBRE.
Miracle Last Mile: Retail storefronts also benefit from the fact that it isn’t easy to deliver everything to everyone’s front door. Warehouse space in dense cities is expensive and scarce — vacancy rates dropped to a new low of 4.3% last month — and retailers have turned shops into fulfillment hubs that give customers another reason to come in and shop — and the chance to put away that razor knife and packing tape.