Mixed messages on urban vs. suburban growth

A recent RetailWire panel discussion evaluated a Wall St. Journal article about millennials’ move to the suburbs. As I point out below, there is plenty of contradictory information on the topic, leaving retailers with mixed messages about their retail estate strategies:

First, there is mixed data about the move toward the suburbs vs. the move back to the city. For every piece of reporting about suburban growth (like the Wall Street Journal article), there is evidence to the contrary. I don’t think it’s clear what the long-term behavior of Millennials will be.

The bigger issue, aside from demographics, is the challenging position of many mall anchors. Sears and JCP (both in varying degrees of difficulty) anchor many malls around the country, and — outside of Macy’s — there is not a strong national department store able to be a productive mall tenant around the country. Adding new tenants like restaurants and Forever 21 may help, but it’s not a systemic solution.

In many markets, “the rich get richer”…here in Milwaukee, for example, Nordstrom is (finally) adding a store to the dominant regional mall in the area while a second-tier mall like Brookfield Square struggles with its tenant mix because of weak anchors. Unless the long-term decline of the anchor department store suddenly reverses (and there is no evidence of it), mall developers have plenty of challenges on their hands.

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