Holidays boost retail store activity

Holidays boost retail store activity
Woodland Mall is located at East Beltline Avenue and 28th Street in Kentwood. Credit: Courtesy photo

(Watch for this story Monday morning on WZZM TV 13) Brick-and-mortar retail is experiencing a holiday renaissance. 

Nearly 200 million Americans shopped over the Thanksgiving weekend, according to the National Retail Federation. That is why Mark Ansara, managing principal and senior vice president of retail at Advantage Commercial Real Estate, is calling this year “brick-and-mortar season.” 

“I ordered something on Amazon the other day, and it said I might not get it until Christmas and it’s more than a week away,” Ansara said. “The selection is trim, and you don’t know what you’re getting online. People want it now. 

“(Advantage Senior Vice President Mike Murray) and I were out a lot over Thanksgiving weekend, checking parking lots and stores. Places were packed.”

That is a significant reversal of how the past few holiday seasons were. Each year, Ansara and Murray release a holiday video, an entertaining look at the area’s retail, but this year the pair were clear in their view of a brick-and-mortar resurgence during the holidays. 

Online shopping exploded during the COVID-19 pandemic, when most people were sequestered in their homes. According to the U.S. Census Bureau, e-commerce sales jumped 43%, or $244.2 billion, in 2020. That caused an influx in industrial real estate activity nationwide as companies worked to expand their warehouses for shipping. 

While the adoption of online shopping was helped along by the pandemic and likely will not fully revert to pre-pandemic levels, there is a resurgence in brick-and-mortar retail, Ansara said. 

The U.S. Department of Commerce found retail grew faster in 2021 than e-commerce, jumping up 17.9% during the year. That trend is likely to stay true in 2022 as the post-pandemic shopping spree continued. 

NRF found retail holiday sales jumped 14.1% in 2021 compared to 2020. While the growth is expected to be be less than 8% this year, that is still a big increase compared to where it was during the pandemic.

“I think it’s still going to be a solid year,” Matt Kramer, KPMG consumer and retail national sector leader, told the New York Times. “I do think the consumers will be out, but there’s only so much budget to go around, and there won’t be these huge jumps like we saw last year.”

But what can Grand Rapids expect following the holiday season? Ansara said there will not be too many new retailers opening because “inventory is in horrid shape.” 

In the area he calls “Main and Main” or the East Beltline Avenue and 28th Street, it is hard to find space for a retailer looking for 10,000-15,000 square feet. Likewise, retail rental rates are higher than ever but are beginning to plateau, he said. 

“It’s playing the waiting game for something to come up,” Ansara said, who added there are several buildings ripe for redevelopment in that core retail area. “Activity has been brisk, but slowed down for the five to six weeks here, but that’s the season for retail.” 

Next year, Ansara said there will likely be a flurry of quick-serve food and coffee concepts new to the area opening. He said other firms are bringing in some soft goods brands new to West Michigan.

Beyond that, some retailers will reposition from a “B” location to an “A” location when given an opening.

For now, though, open retailers can expect a strong holiday push. 

“Part of the increase in foot traffic is due to the backside of COVID. People couldn’t shop, and now they want to get their stuff,” Ansara said, adding there are 50 people in line at any given time in retailers such as Marshall’s, TJ Maxx, Sierra Trading Post or Home Goods. “We don’t believe in inflation at Christmas time, people are spending to spend.”