The current state of retail (1 Viewer)

[timschochet]

So I’m pretty involved in retail businesses in Southern California. I manage a few shopping centers for my family, and I’m invested in a few stores, a few restaurants, a couple ice cream shops. I was at some of the busier centers over the weekend, right near on the water, and here is what I saw:

1. The restaurants are jam packed. People crowd to get into the good restaurants, and even the large mediocre ones. Ice cream and other sweets, coffee, continue to do very well.

2. Large crowds walk around the retail gift shops ….but they’re not buying. They pick up items, ask questions, remark on how cool stuff is, but they don’t spend money.

Of course this is purely anecdotal, but it’s true of everyone I’ve been talking to and I talk to a lot of people. A few years ago customers would come into these gift stores and spend $50, $100, without much hesitation. Now they’re spending $5 or $10 if that. Nobody’s buying, everybody is cautious. And the retailers are hurting big time.

Is this going to change? What will cause it to change? I’ve no idea.

 

[culdeus]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

 

[Max Power]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

 

[Eephus]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

 

[Eephus]

Retail stores have become showrooms. People are spending online.

This seems to be the case for clothing stores in the ritzy neighborhoods of SF. The retail shop is as much of an advertisement for the brand as it is a viable commercial operation on its own.

 

[fruity pebbles]

I’ve been hearing about a retail slowdown for a number of years now but it doesn’t seem to be happening in totality.

 

[UncleZen]

My wife criticized me a few years back because I did most of my Christmas shopping online. This year, she ordered more online than I did. It really is just so much easier and usually cheaper. Also, I have found the restaurants here in FL to be no where near as packed as they were pre-pandemic. They all still have long waits to get seated but that's because they are running at half staff.

 

[culdeus]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

Sustainable in people are doing stuff not buying landfill from china

 

[Max Power]

Retail stores have become showrooms. People are spending online.

This seems to be the case for clothing stores in the ritzy neighborhoods of SF. The retail shop is as much of an advertisement for the brand as it is a viable commercial operation on its own.

My wife will check Amazon prices on most things before she buys it. Half the time it's cheaper online and they can deliver in 24 hours. Hard model to compete against.

 

[timschochet]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

 

[timschochet]

Long term, what are the tenants that are likely to last?
Dry cleaners
Nail salon
Hair salon
Medical
Dental

in other words, service businesses. The stuff that you can’t buy on Amazon, you gotta go there. But none of these take up a lot of square feet. Which means that the centers with big box space (15,000-20,000 feet) are going to have a real problem.

 

[ChiefD]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

 

[Capella]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

In Florida we’ve converted everything into car washes. It’s just great. Car washes as far as the eye can see. Every city block, Woody’s Car Wash right across the street from Jimbo’s Car Wash Emporium where the logo is a pig for some reason.

 

[timschochet]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

This sounds good except who pays? Unless there’s some sort of government investment this won’t happen, because the banks are too heavily invested in higher retail rents than what you’re proposing,

 

[culdeus]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

In Florida we’ve converted everything into car washes. It’s just great. Car washes as far as the eye can see. Every city block, Woody’s Car Wash right across the street from Jimbo’s Car Wash Emporium where the logo is a pig for some reason.

Same here. I don't get it. Seems breaking bad effect

 

[jvdesigns2002]

Small businesses that sell goods are competing with big box stores that have buying power (Costco, target, wal-mart) and online stores that can operate out of warehouses and not have to spend money on showrooms. Not only that—insurance rates are going up for small businesses because of crime, wages are up—and consequently—even workers comp insurance is up. Even stores that get foot traffic become places for shoppers to sample and try on different things—and once they figure out what they want—they just purchase it online for a couple percentage points cheaper. People are far less likely to nickel and dime on experiences—including dining. There is a reason why a lot of brick and mortar retail is basically turning into pop up shops because the long term sustainability of a product based brick and mortar business is becoming more and more challenging.

 

[SpurrierisisGod]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

Wait??? People still go to banks? Like physical places?

 

[FairWarning]

Long term, what are the tenants that are likely to last?
Dry cleaners
Nail salon
Hair salon
Medical
Dental

in other words, service businesses. The stuff that you can’t buy on Amazon, you gotta go there. But none of these take up a lot of square feet. Which means that the centers with big box space (15,000-20,000 feet) are going to have a real problem.

In Michigan, pot shops. Your list is pretty much what I see also, along with coffee shops. Stores like Meijer, WalMart, and Target get the majority of foot traffic, niche stores are fighting for the crumbs.

 

[Dan Lambskin]

Long term, what are the tenants that are likely to last?
Dry cleaners
Nail salon
Hair salon
Medical
Dental

in other words, service businesses. The stuff that you can’t buy on Amazon, you gotta go there. But none of these take up a lot of square feet. Which means that the centers with big box space (15,000-20,000 feet) are going to have a real problem.

In Michigan, pot shops. Your list is pretty much what I see also, along with coffee shops. Stores like Meijer, WalMart, and Target get the majority of foot traffic, niche stores are fighting for the crumbs.

Don’t forget payday loan places

 

[RCon]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

This sounds good except who pays? Unless there’s some sort of government investment this won’t happen, because the banks are too heavily invested in higher retail rents than what you’re proposing,

In theory, given a long enough timeline and no government intervention, the landlord/owner of the space would pay, under the theory that some income is better than none. In practice, I suspect government intervention in one form or another will win the day, most likely in terms of tax breaks and subsidies for large corporations to buy and redevelop the space.

 

[Juxtatarot]

I’m surprised that dry cleaners are on the good list still. Hasn’t work from home, casual dress standards, and easy care fabrics hurt them?

 

[beer 30]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

This sounds good except who pays? Unless there’s some sort of government investment this won’t happen, because the banks are too heavily invested in higher retail rents than what you’re proposing,

In theory, given a long enough timeline and no government intervention, the landlord/owner of the space would pay, under the theory that some income is better than none. In practice, I suspect government intervention in one form or another will win the day, most likely in terms of tax breaks and subsidies for large corporations to buy and redevelop the space.

So us because if the government gets involved it's spending our tax dollars. When does this stop? Everywhere I look they are still building retail space when the lot right next to it is empty retail space.

 

[Major]

Long term, what are the tenants that are likely to last?
Dry cleaners
Nail salon
Hair salon
Medical
Dental

in other words, service businesses. The stuff that you can’t buy on Amazon, you gotta go there. But none of these take up a lot of square feet. Which means that the centers with big box space (15,000-20,000 feet) are going to have a real problem.

In Michigan, pot shops. Your list is pretty much what I see also, along with coffee shops. Stores like Meijer, WalMart, and Target get the majority of foot traffic, niche stores are fighting for the crumbs.

Resale sneaker/vintage designer shops are all over the place as well. While I think a lot of these are money laundering operations, people still like to buy/sell/trade their used stuff in person.

 

[BassNBrew]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

 

[BassNBrew]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

Small office space around here is doing very well. I've been force out of my space 3x in the last 25 years by larger tenants expanding. Considering buying space which doesn't seem wise on one hand but it would be nice to have a permanent address.

 

[Max Power]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

I worry about that industry too. We used to have a couple really good spots around me and they've been starting to underwhelm lately. The nearby Mexican place used to have portion sizes so large that you definitely had leftovers for tomorrow. The last time we went the chicken breast was so small it looked like it was cut in half. I just didn't walk out of there happy about the place. One of the best parts of it is now gone probably due to their profit margins.

 

[Gally]

2. Large crowds walk around the retail gift shops ….but they’re not buying. They pick up items, ask questions, remark on how cool stuff is, but they don’t spend money.

They will spend money and buy online what they liked while browsing. Retails stores are being used as show rooms where consumers can touch items, try them on, etc and then go buy them online where they are cheaper. This is my guess as to why the browsing seems busy but the purchasing is down.

 

[FreeBaGeL]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

This is very much it. Travel, for example, is king right now. People travel like never before and travel spending continues to rise. Projections for 2025 are another 7-9% rise in travel spending off an already seemingly unsustainable high. And also keep in mind this is alongside stagnation/decline in business travel spending as the world has really embraced virtual meetings out of covid, so leisure travel spending as a subcategory even more.

Same thing with concert tickets, sporting events, skiing, etc. They just can't raise prices high enough to get people to stop coming. A lot of experience subcategories their biggest problem is that there is too MUCH demand (overcrowding, etc) and even raising prices far beyond what they used to be can't slow that down.

Spending priorities have definitely shifted to people wanting to do stuff more than wanting to have stuff.

 

[Gally]

Spending priorities have definitely shifted to people wanting to do stuff more than wanting to have stuff.

But then when they are there they are "doing the stuff" they are filming on their phone so they can watch all the stuff they "did" on their phone.

 

[Leroy Hoard]

Spending priorities have definitely shifted to people wanting to do stuff more than wanting to have stuff.

But then when they are there they are "doing the stuff" they are filming on their phone so they can watch all the stuff they "did" on their phone.

Nothing like not being in the moment.

 

[TripItUp]

pickleball has been taking some space here in San Diego.

Also a lot of health and wellness stuff, like skin care/cryogenic therapy/palates/yoga etc.

 

[timschochet]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

This is very much it. Travel, for example, is king right now. People travel like never before and travel spending continues to rise. Projections for 2025 are another 7-9% rise in travel spending off an already seemingly unsustainable high. And also keep in mind this is alongside stagnation/decline in business travel spending as the world has really embraced virtual meetings out of covid, so leisure travel spending as a subcategory even more.

Same thing with concert tickets, sporting events, skiing, etc. They just can't raise prices high enough to get people to stop coming. A lot of experience subcategories their biggest problem is that there is too MUCH demand (overcrowding, etc) and even raising prices far beyond what they used to be can't slow that down.

Spending priorities have definitely shifted to people wanting to do stuff more than wanting to have stuff.

This is a great point. However, part of traveling has traditionally involved people buying stuff, at gift shops, souvenirs, etc. That’s gone down.

 

[RCon]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

This is very much it. Travel, for example, is king right now. People travel like never before and travel spending continues to rise. Projections for 2025 are another 7-9% rise in travel spending off an already seemingly unsustainable high. And also keep in mind this is alongside stagnation/decline in business travel spending as the world has really embraced virtual meetings out of covid, so leisure travel spending as a subcategory even more.

Same thing with concert tickets, sporting events, skiing, etc. They just can't raise prices high enough to get people to stop coming. A lot of experience subcategories their biggest problem is that there is too MUCH demand (overcrowding, etc) and even raising prices far beyond what they used to be can't slow that down.

Spending priorities have definitely shifted to people wanting to do stuff more than wanting to have stuff.

This is a great point. However, part of traveling has traditionally involved people buying stuff, at gift shops, souvenirs, etc. That’s gone down.

I've got the whole trip recorded on my phone. I don't need a t-shirt!

I kid, but I wonder if there's much truth to the sentiment for a lot of people?

 

[mr. furley]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

Wait??? People still go to banks? Like physical places?

recently had a debit card data breach. someone tried spending $100 at like 16 different places in NJ on my card.

got a fraud call from my credit union to alert me. they closed the old card immediately, reversed the charges and told me to stop by and pick up a new card.

10 minutes later i had a new card and was off.


last week my wife's card was breached. she banks with a different institution that has no local presence. they told her "2-3 weeks" and they'd mail her a new card.

 

[DA RAIDERS]

My family has commercial real estate. It’s definitely a concern

 

[whoknew]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

I was at a retail conference about 9 months ago and they talked about how retail spaces are booming - they can't find vacant space. And retailers have found that the rental space is effectively a loss leader. That having a retail space in an area significantly increases the online sales in that area.

Granted this was in Texas, but are you not seeing that trend in California?

 

[timschochet]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

I was at a retail conference about 9 months ago and they talked about how retail spaces are booming - they can't find vacant space. And retailers have found that the rental space is effectively a loss leader. That having a retail space in an area significantly increases the online sales in that area.

Granted this was in Texas, but are you not seeing that trend in California?

It’s still hard to find good vacant space.

But I’m worried about the drop in sales. And as far as rental space increasing online sales- I don’t have any knowledge about that.

 

[FreeBaGeL]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

They seem to be doing just fine though. At least the name brands that people seem to be flocking to these days which I do think reflects a change in society over the last few years where the people have generally gotten a lot more pro corporation and pro big business.

Look at how restaurant stocks are performing.

Darden (Olive Garden etc) up 20% in the last year

Chipotle up 22% in the last year.

Brinker (Chilis etc) up 340% (!!) in the last year.

Cheesecake Factory up 60% in the last year.

Texas Roadhouse up 45% in the last year.

Shake Shak up 60% in the last year.

And plenty more.

Many of these have grown more in the last year than they typically grew in a DECADE in the past. Many have grown nearly as much in the past 5 years than they had in their entire existence prior to that.

 

[Max Power]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

They seem to be doing just fine though. At least the name brands that people seem to be flocking to these days which I do think reflects a change in society over the last few years where the people have generally gotten a lot more pro corporation and pro big business.

Look at how restaurant stocks are performing.

Darden (Olive Garden etc) up 20% in the last year

Chipotle up 22% in the last year.

Brinker (Chilis etc) up 340% (!!) in the last year.

Cheesecake Factory up 60% in the last year.

Texas Roadhouse up 45% in the last year.

Shake Shak up 60% in the last year.

And plenty more.

Many of these have grown more in the last year than they typically grew in a DECADE in the past. Many have grown nearly as much in the past 5 years than they had in their entire existence prior to that.

Is it because they are opening up more locations?

Over the past year we've also seen a lot of chain restaurants go under or close a decent % of stores.

Red Lobster
Hooters
Outback Steakhouse
Boston Market
Applebees
Cracker Barrel

 

[Manster]

Amazon

I try to buy from local brick and mortar stores but often can't find what I need. Amazon can have it to my doorstep same day, or next day, typically. Also, returns are simple.

I suppose my family is not the norm for eating out, but don't eat at restaurants regularly. It's way too expensive, and in my experience, the quality does not meet that price.

 

[Manster]

Take half of all that retail space and replace it with green grass and trees again so the ground can absorb moisture and regenerate itself and reduce run off everywhere.

Convert the rest of that space into regional distribution centers to move all the goods online.

Take malls and convert them into afforable housing. Put a gym in there. A coffee shop. Use the food court for take out food. Create little communites with that extra retail space.

Brick and mortar retail........ begrudgingly going the way of blockbuster

 

[Stoneworker]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

They seem to be doing just fine though. At least the name brands that people seem to be flocking to these days which I do think reflects a change in society over the last few years where the people have generally gotten a lot more pro corporation and pro big business.

Look at how restaurant stocks are performing.

Darden (Olive Garden etc) up 20% in the last year

Chipotle up 22% in the last year.

Brinker (Chilis etc) up 340% (!!) in the last year.

Cheesecake Factory up 60% in the last year.

Texas Roadhouse up 45% in the last year.

Shake Shak up 60% in the last year.

And plenty more.

Many of these have grown more in the last year than they typically grew in a DECADE in the past. Many have grown nearly as much in the past 5 years than they had in their entire existence prior to that.

Is it because they are opening up more locations?

This is a good point. Take Cheesecake Factory, for example.

As of Q3 2024, year over year same-store-sales grew by a meager 1.6%.

However, there are 49 new Cheesecake locations opening in just '24 and '25 which are helping fuel the growth story that is feeding the 60% stock rise.

 

[FairWarning]

Retail stores have become showrooms. People are spending online.

There is also the fact a dollar doesn't go as far as it used to. People are getting less for the same amount of money.

Retail in NC seems packed as well, but I'm seeing the opposite on restaurants. I don't eat out a ton, but seems to be less traffic at sitdown restaurants and several places have even reduced hours around me.

Local Chipotle was closed for a week and now closes at 7pm due to staffing. Many restaurants only using half the tables while people wait due to lack of staff. Hard to see how they turn a profit paying rent when only using half the capacity. What really stinks is that if a place actually turns out to be decent and thrives, the landlord cranks up the rent until they eventually force them out.

They seem to be doing just fine though. At least the name brands that people seem to be flocking to these days which I do think reflects a change in society over the last few years where the people have generally gotten a lot more pro corporation and pro big business.

Look at how restaurant stocks are performing.

Darden (Olive Garden etc) up 20% in the last year

Chipotle up 22% in the last year.

Brinker (Chilis etc) up 340% (!!) in the last year.

Cheesecake Factory up 60% in the last year.

Texas Roadhouse up 45% in the last year.

Shake Shak up 60% in the last year.

And plenty more.

Many of these have grown more in the last year than they typically grew in a DECADE in the past. Many have grown nearly as much in the past 5 years than they had in their entire existence prior to that.

Is it because they are opening up more locations?

Over the past year we've also seen a lot of chain restaurants go under or close a decent % of stores.

Red Lobster
Hooters
Outback Steakhouse
Boston Market
Applebees
Cracker Barrel

Bob Evans has been trending down for a while also.

 

[Phil Elliott]

We went to Cheesecake Factory yesterday for early dinner (4:30) and it was about two thirds empty. Then went to a dept store (Dillards fwiw). There was one other person on the second floor shopping. Had to look around for someone to open a dressing room and looked like about three fourths of the checkout computers have been removed.

 

[MTskibum]

We went to Cheesecake Factory yesterday for early dinner (4:30) and it was about two thirds empty. Then went to a dept store (Dillards fwiw). There was one other person on the second floor shopping. Had to look around for someone to open a dressing room and looked like about three fourths of the checkout computers have been removed.

This must be dependent on where you live, our mall has 2 dillars with 2 floors each and both have plenty of people each time you go.

In addition there is a large cheesecake factory there with a giant menu of "meh" food. That menu is so large you think you can find something that will taste good, but you would be wrong. It is generally fairly crowded though.

 

[RCon]

Apropos of nothing, there's a small, mostly local chain around here that's 100% a Cheesecake Factory ripoff. The entire menu is near identical, yet somehow, the food is even worse than Cheesecake Factory. Haven't been there since 2020 or 2021, and that was only because they were one of the only semi-nearby places that was doing outdoor dining during the winter of COVID. They must be doing OK, though, as it seems like they're opening more locations nationally.

https://www.maggiemcflys.com/

 

[glvsav37]

Here on Long Island, satellite hospital and medical offices have been taking over large spaces in our local mall, like where a 2 floor Sears use to be.

I've always wanted to open one of those shared/temp office places specifically positioned inside of malls. The parking is already there, the restaurant and food courts are already there and if you need something like an outfit or gift for a party, you can duck out on your lunch break and do a quick shop.

 

[FairWarning]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

I was at a retail conference about 9 months ago and they talked about how retail spaces are booming - they can't find vacant space. And retailers have found that the rental space is effectively a loss leader. That having a retail space in an area significantly increases the online sales in that area.

Granted this was in Texas, but are you not seeing that trend in California?

It’s still hard to find good vacant space.

But I’m worried about the drop in sales. And as far as rental space increasing online sales- I don’t have any knowledge about that.

What are the businesses that are buying/renting from you right now?

 

[Dr_Zaius]

Here on Long Island, satellite hospital and medical offices have been taking over large spaces in our local mall, like where a 2 floor Sears use to be.

That's true around here as well. Medical buildings popping up every where. Two big regional hospitals bought out almost all of the unaffiliated places over the last 20 years and now they're both expanding like gangbusters.

Convert the rest of that space into regional distribution centers to move all the goods online.

These are a mixed blessing at best. Eastern PA is a prime territory for distribution centers because of access to NYC, NJ, and the Philly area. On the plus side, shipping is often really prompt even from the non-Amazon sources. Downside is the amount of truck traffic is staggering, and the jobs created is not great in relation to how much space they consume.

 

[timschochet]

People have shifted their spending patterns to experiences rather than things. In some ways this is more sustainable.

We went to the mall before Xmas for the first time since the pandemic. There's an escape room where the Macy's used to be and an arcade has taken the spot of Nordstrom's. There seemed to be as many places to eat as there were places to shop. I don't know how sustainable this is.

It’s not sustainable in terms of retail leasing, which is, selfishly, my main concern.

But long term it could be everyone’s. Most of our banks are heavily invested in commercial space. Office space has already taken a gigantic hit since Covid and isn’t coming back. If retail takes a similar hit that will create serious economic trouble.

I was at a retail conference about 9 months ago and they talked about how retail spaces are booming - they can't find vacant space. And retailers have found that the rental space is effectively a loss leader. That having a retail space in an area significantly increases the online sales in that area.

Granted this was in Texas, but are you not seeing that trend in California?

It’s still hard to find good vacant space.

But I’m worried about the drop in sales. And as far as rental space increasing online sales- I don’t have any knowledge about that.

What are the businesses that are buying/renting from you right now?

We have all kinds. I manage several midsize shopping centers.