MIAMI—If there's one word to describe the retail market in 2017 it might be “adaptable.” From the explosion of discount retailers to the increasing normalcy of home delivery services, a lot has changed, and retailers as well as real estate and development professionals have had to adapt to succeed.
Florida's retail market has fared particularly well through the changes. GlobeSt.com caught up with Cushman & Wakefield's Patrick Berman, retail expert and managing director with the firm's Florida Capital Markets division, to get his take on what worked, what didn't and what's ahead for Florida retail in part one of this exclusive interview.
GlobeSt.com: What lessons did 2017 teach us about the retail market?
Berman: This year taught us that retail is not failing; it is evolving. Retailers are adapting to meet consumer demands such as low prices, expedited delivery and “no hassle” return policies, and according to the data, these efforts are working.
Across the nation in 2017, 14,248 stores opened while 10,168 stores closed, for a net gain of 4,080 net openings, according to data from IHL Group.
New retail development is focused on convenience, service, groceries, discounters, restaurants and medical uses. Priority is given to “internet resistant” businesses such as dentists and hair salons, as well as niche businesses that offer an experience that cannot be replicated online such as Top Golf and Dave & Buster's, both of which are expanding their presence in Florida.
With limited new construction and strong demand, Florida's retail market is overall very healthy. In 2017, vacancy rates dropped 20 basis points and rental rates increased by 2.3%.
(Will high-street retail work in Miami's urban core? Here's one thought.)
GlobeSt.com: What areas of retail—what types of stores—are performing the best? Which are still in trouble?
Berman: Apparel retailers, traditional department stores and electronics outlets were the worst performers in 2017. Radio Shack and Payless ShoeSource accounted for 16% of all store closures nationwide in 2017.
Discount, restaurant, convenience and automotive retailers opened the greatest number of new stores in 2017. Dollar General and Dollar Tree opened 1,940 new stores in 2017—an average of 5+ new stores per day). The following retailers are expanding their store counts in Florida: Publix, 7 Eleven, Aldi, O'Reilly Auto Parts, ULTA, Five Below, TJ Maxx, Wawa, Dunkin Donuts, Chipotle, Chick Fil-A, Taco Bell and KFC.
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