Glimmers Of Hope Ahead For Downtown Retail Markets Still Struggling

It has been a long slog back to normalcy for retailers located in U.S. central business districts, as the coronavirus pandemic kicked off low office occupancy rates in March 2020 that have yet to recover. As business dried up, many downtown retail shops — especially independents — closed.

While survivors are still struggling, there are glimmers of hope across the nation for retailers as vaccines continue to roll out, confidence is on the rise and offices lease back up. 

Provided the coronavirus doesn’t throw any more curveballs, it’s only up from here, experts say.

“The vaccine, and the reduction in infections from the most recent peak this summer, are supporting the increase in [pedestrian] traffic, but there’s still a long way to go before a full recovery for downtown retail,” Springboard Marketing and Insights Director Diane Wehrle said.

Bisnow/Dees Stribling

Oakland City Center on a weekday morning in late October 2021. Few people were present and many of the shops in the area were closed.

The pain hasn’t been spread evenly.

Retailers in residential neighborhoods have been recovering faster than those in CBDs worldwide, according to an analysis from the Mastercard Economics Institute, as reported by Bloomberg. Small and midsized retailers in residential areas enjoyed an 8% increase in sales this year compared to 2019, the report notes, but in CBDs, comparable sales were down 33%.

Pedestrian traffic in U.S. downtowns during the workweek, which has traditionally been a mainstay for retail in those markets, remains much lower than it was before the pandemic, according to the most recent Downtown Pedestrian Traffic Report by retail data specialist Springboard.

Still, downtown pedestrian traffic has been increasing recently, albeit slowly. In September, workweek traffic strengthened to 40.7% below its 2019 level, up from 44.7% below in August and 44.1% below in July, according to Springboard, which uses sensors to monitor…