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blueradon

The Future of Retail

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So as we all know and are well aware of - retail industry is not doing so hot...and it probably won't be so great in the next 5 years

However, downtown cities are growing...more people are starting or will be starting to flock downtown with the surge in condo and apartment buildings being created in many major metro cities...

So that gets me thinking...

Would this be a prime opportunity for retail to finally start planning to make its move to downtown metro cities? I'm sure that some of these stores are looking at downsizing, most stores can turn to the convenience of online sales, and in the future they may require making their stores a little bit smaller. This seems like a win-win situation for empty downtown buildings.

To me this would seem like a perfect opportunity with the lower costs of living due to the housing and real estate markets, and already seeing the signs of downtown development coming back to the forefront.

So what do you think?

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Makes sense. I think there will have to be a new focus on affordability though. Even people with the discretionary income to buy $150 button-up shirts aren't doing so. They're saving, paying down debt, etc. Just a thought that passed my mind when walking through Blue Blvd (Cherry/Diamond) the other day. I want them to succeed, but I don't see a huge market for their higher-end goods right now. I think the H&M model--fashionable goods at low prices--can succeed TODAY, even in downtown GR.

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I'm going to focus my predictions on the Grand Rapids Area itself. But the following would apply to any metro area similar to ours.

Let's begin 3-5 years out.

Basically we are going to see the end of consumerism in its current form as people tighten their belts and conserve as the effects of the recession takes its toll. The Great Depression statistically lasted only 18 months. But the effects it had were felt until the onset of World War II. That's 8 years of people struggling from the crash of '29. If the war had not happened the effects of the Great Depression may have been felt for much longer. This economic recession we're in now is some where between the current recession and the Great Depression in severity from what I gather. So for the next 5 years minimum will lock down survival mode for many poor and working class people and belt tightening for higher social statuses. This does not bode well for retail. So the shuttering of Linen and Things and Circuit City are just the beginning of a domino effect that will ripple throughout the retail world taking out all but the strongest and most determined.

This translates into pretty much a doom and gloom scenario for retail corridors like 28th Street, Alpine Ave., Plainfeild Ave, Rivertown Parkway, Etc. for a while as the shuttering of Circuit City, Linen and Things are only the the beginning. Much of the suburban and exurban retail developments that have been built in the last 25 years will pretty much look like the stretch of 28th street running through Wyoming. That being run down structures with allot of vacancies, or filled with things like Save Allot, Dollar General, the sleazy chack cashing places, and pawn shops. The big box anchors and sub anchors will be vacant or barely clinging to life and unable to afford comprehensive upkeep.

In addition to big boxes and other retail dropping like dead flies, Center Point Mall and Rodger's Plaza Mall will ultimately fail while Woodland and Rivertown Crossings will be locked in mortal combat with each other for a customer base already migrating to more affordable discount retailers like Target, Walmart, and Meijer. If the Recession deepens any further, only one of these two malls will Survive. The death of Woodland mall would instantly turn the Intersection of 28th Street and Broadmore Ave. into a ghost town while the Death of Rivertown Crossings will have devastating effects on surrounding retail. Let's hope these two mall can hold there own.

As for the Lifestyle Centers being built and/or planed such as Orchard Hills, and the one for the Knapp Corner area, only one will succeed. The Orchard Park that is/was? suppose to go into Walker is never going to happen. Topping these things off, most of any new retail developments on the planning books will be put on hold or canceled aggravating the hardships for struggling inner 'burb retail corridors like Plainfeild Ave. south of Meijer, Alpine Ave. South of I-196 and Wyoming's stretch of 28th Street. which are trying to revive themselves.

Lastly downtown, retail is going to continue to struggle for awhile. However if built, the Street Car line and the S. Division BRT might help DT out a bit.

For Discount Retailers, like Meijer, Walmart, and Target, the fates might be kinder for them. They are not being spared from the recession as seen in the abysmal christmas shopping season. But discount retailers will be propped up by people moving from shopping malls and higher end retail to discount retail as incomes esp the disposable kind continue to shrink. But not being spared from the recession they will slow or halt the construction of new stores as the market will no longer be able to absorb any more.

So for the next three to five years, expect continued struggle and further blight in the older inner 'burbs and a painful decline in the newer outer 'burbs.

Beyond 5 years.

It get's cloudy from here. But the economy will recover. How soon the economy will recover, how the economy recovers, and how much of the loss's of the recession incurred are recovered will depend on allot of factors. But surviving retail will most likely be smaller in size, while any remaining big boxes will build smaller boxes, go multistory, or phase out big box formats in favor smaller stores supplemented with on line retail venues. But what ever happens retail as we know it is over.

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I'm going to focus my predictions on the Grand Rapids Area itself. But the following would apply to any metro area similar to ours.

Let's begin 3-5 years out.

Basically we are going to see the end of consumerism in its current form as people tighten their belts and conserve as the effects of the recession takes its toll. The Great Depression statistically lasted only 18 months. But the effects it had were felt until the onset of World War II. That's 8 years of people struggling from the crash of '29. If the war had not happened the effects of the Great Depression may have been felt for much longer. This economic recession we're in now is some where between the 1980's recession and the Great Depression in severity from what I gather. So for the next 5 years minimum will be lock down survival mode for many poor and working class people and belt tightening for higher social statuses. This does not bode well for retail. So the shuttering of Linen and Things and Circuit City are just the beginning of a domino effect that will ripple throughout the retail world taking out all but the strongest and most determined.

This translates into pretty much a doom and gloom scenario for retail corridors like 28th Street, Alpine Ave., Plainfeild Ave, Rivertown Parkway, Etc. for a while as the shuttering of Circuit City, Linen and Things are only the the beginning. Much of the suburban and exurban retail developments that have been built in the last 25 years will pretty much look like the stretch of 28th street running through Wyoming. That being run down structures with allot of vacancies, or filled with things like Save Allot, Dollar General, the sleazy chack cashing places, and pawn shops. The big box anchors and sub anchors will be vacant or barely clinging to life and unable to afford comprehensive upkeep.

In addition to big boxes and other retail dropping like dead flies, Center Point Mall and Rodger's Plaza Mall will ultimately fail while Woodland and Rivertown Crossings will be locked in mortal combat with each other for a customer base already migrating to more affordable discount retailers like Target, Walmart, and Meijer. If the Recession deepens any further, only one of these two malls will Survive. The death of Woodland mall would instantly turn the Intersection of 28th Street and Broadmore Ave. into a ghost town while the Death of Rivertown Crossings will have devastating effects on surrounding retail. Let's hope these two mall can hold there own.

As for the Lifestyle Centers being built and/or planed such as Orchard Hills, and the one for the Knapp Corner area, only one will succeed. The Orchard Park that is/was? suppose to go into Walker is never going to happen. Topping these things off, most of any new retail developments on the planning books will be put on hold or canceled aggravating the hardships for struggling inner 'burb retail corridors like Plainfeild Ave. south of Meijer, Alpine Ave. South of I-196 and Wyoming's stretch of 28th Street. which are trying to revive themselves.

Lastly downtown, retail is going to continue to struggle for awhile. However if built, the Street Car line and the S. Division BRT might help DT out a bit.

For Discount Retailers, like Meijer, Walmart, and Target, the fates might be kinder for them. They are not being spared from the recession as seen in the abysmal christmas shopping season. But discount retailers will be propped up by people moving from shopping malls and higher end retail to discount retail as incomes esp the disposable kind continue to shrink. But not being spared from the recession they will slow or halt the construction of new stores as the market will no longer be able to absorb any more.

So for the next three to five years, expect continued struggle and further blight in the older inner 'burbs and a painful decline in the newer outer 'burbs.

Beyond 5 years.

It get's cloudy from here. But the economy will recover. How soon the economy will recover, how the economy recovers, and how much of the loss's of the recession incurred are recovered will depend on allot of factors. But surviving retail will most likely be smaller in size, while any remaining big boxes will build smaller boxes, go multistory, or phase out big box formats in favor smaller stores supplemented with on line retail venues. But what ever happens retail as we know it is over.

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