As we enter the second month of 2020, we thought it was time to provide our thoughts on the state of the retail market both nationally and locally.
2019 ended on a strong note as year-over-year retail sales—minus auto sales and gasoline—grew 5.9% in December, according to the U.S. Census Bureau. Food and Beverage (F&B) sales continue to lead the way in brick-and-mortar retail at 4.9% growth. This trend of F&B retail leading the way is likely to continue as dining remains a core part of the shopping experience.
Accompanying F&B is the steady growth of the other players in the service retail sector including specialty fitness, health and beauty, amusement, and telecommunications. We expect to see sustained growth in these spaces at both traditional shopping centers and newer mixed-use developments—especially brands that promote themselves as a destination in addition to functioning as a service provider.
Concepts that invite customers to participate in the creation of products or stores that market themselves as a place for likeminded people to gather and experience a service while building community are likely the brands that will outgrow other more traditional retailers.
Even though we are seeing the most growth in service-focused retail, all is not lost for traditional brick-and-mortar shopping. Much of this can be traced to the entrance of Generation Z into the market. Generation Z includes anyone born between 1997-2010.
This is the latest group to join the consumer world and research shows they prefer to shop and discover new products in-store rather than purchasing online. This new consumer base is leading to more and more online retailers entering the brick-and-mortar space.
While online sales are seen as convenient, they are not always viewed as the most efficient and accurate. For instance, purchasing clothing online can be particularly troublesome for shoppers because there is no way to try on and experience the product before buying. There is also difficulty when it comes to exact color and size matching with items like furniture, art, and décor.
Overall, we continue to be bullish on brick-and-mortar retail at both a national and local level. The economy shows no signs of slowing down and the future of North Alabama couldn’t be brighter.
We do believe we will continue to see consolidation and innovation in the traditional retail category and that the service retailer will remain the leader in growth. Exciting times are ahead for all of us here in the Huntsville/Madison County market, so stay tuned to the Crunkleton blog for future announcements.
Originally from Tennessee, Zac studied business management at Samford University. After moving to Huntsville in 2001, Zac started out his career in banking, wealth management, and financial planning. In 2010 he joined Crunkleton and has since become the VP of Leasing for the commercial real estate group where he focuses on retail leasing and development.
Phase two is the creation of the property’s retail hub, Gaslight Alley. This new area will be a new kind of shopping experience in the city. Described as “old-world”, the alley will encompass many retail shops along a cobblestone walkway. (Read more about its aesthetics here.)
We caught up with two of the coming businesses to see what we can expect in the coming months at Gaslight Alley.
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