For more than 50 years, retailers have favored the commercial strip: a linear pattern of retail businesses strung along major roadways characterized by massive parking lots, big signs, box-like buildings and a total dependence on automobiles for access and circulation.
For years planners have tried to contain and improve the strip. Now they are getting help from consumers and the marketplace. The era of strip development is coming to an end. Evolving consumer behavior, changing demographics, high-priced gasoline, Internet shopping — are all pointing to a new paradigm for commercial development.
Commercial strips are not going to disappear overnight. But it is becoming increasingly clear that strip retail is retail for the last century. The future belongs to town centers, main streets and mixed-use development. Here is why:
We're overbuilt on the strip
From 1960 to 2000 there was an almost tenfold increase in U.S. retail space, from four to 38 square feet per person. For many years retail space was growing five to six times faster than retail sales. Most of this space came in the form of discount superstores on the suburban strip.
The recession proved that we have too much retail. Strip centers are now littered with vacant stores. By some estimates, there is currently over 1 billion square feet of vacant retail space, much of which has to be re-purposed or demolished.
Retail is moving back to the city
Wal-Mart in late 2010 announced plans for its first-ever stores in Washington D.C. To make the new stores fit an urban environment, the company has agreed to consider an array of new layouts, designs, and parking arrangements.
The store planned for New Jersey Avenue illustrates Wal-Mart’s new approach. The company plans a store of 75,000 to 80,000 square feet (much smaller than usual) on the ground floor of a five-story mixed-use building featuring 315 apartments, underground parking, and space for small retail stores.
At the same time that Wal-Mart and Target are planning new urban stores all over America, as many as 400 former big box stores sit vacant on commercial strips. Most analysts agree that urban neighborhoods are the new frontier for retail: the one place left with more spending power than stores to spend it in.
Traffic congestion, fuel prices and design are problems for the strip
Americans value convenience, but the perceived convenience of the strip has been reduced as traffic congestion has worsened in recent years. Add to this the rising price of fuel and an overall physical environment designed for cars, instead of people, and it’s understandable why fewer people want to shop the strip and almost no one wants to linger.
Town centers and Main streets provide a “place-making dividend” that the homogenous blur of the strip can’t match. They also provide a “park once” environment that will grow in importance if fuel prices rise. Just imagine what will happen to strip development if gas prices hit $5 a gallon or more, as some analysts predict.
The economy is restructuring the retail landscape
The recession saw the collapse of numerous big box chains, like Circuit City and Linens 'n Things. This helped send vacancy rates soaring. After three years on the brink, consumer confidence has improved, but we can expect a new normal when it comes to retail spending. Why? Because unemployment remains high, the days of unlimited credit are over, and many analysts predict that a “new consumer frugality” will be the norm for years to come. What’s more, strip centers without anchors (like grocery stores) and Class B malls are virtually unfinanceable according to many experts.
We’re also moving into an era of hybrid shopping centers. Big boxes are moving into the mall, and many malls will more closely resemble ol-fashioned main streets. Already, seven of the 13 regional malls in the Denver metropolitan area have — like Belmar in Lakewood, Colorado — been turned into mixed-use town centers.
Time-constrained lifestyles and boredom with the dull sameness of most strip centers has meant a slow but steady decline in the number and length of stays at strip malls. People go to get what they want and they leave. A pleasant (i.e. cool) atmosphere is particularly important to the GenY generation. A mixed-use town center with street life, outdoor dining, places to hangout and window shop is much more likely to attract the affection and the dollars of young shoppers than an auto-dependent strip.
E-Commerce means fewer and smaller stores
Today, the nation’s “healthiest” retailer is not Wal-Mart or Costco. It is Amazon. Amazon has exploited the increasing availability of broadband Internet and mobile technology to build a retail superpower. One of the biggest reasons why the strip is coming to an end is because bricks-and-mortar stores are becoming a smaller part of the retail landscape.
First, it was catalog shopping; now it is e-commerce, social media, and mobile phones. This means that retailers will seek smaller footprints as merchandise categories move to online channels. For example, the rise of Netflix and streaming video means the inevitable end of bricks-and motor video stores. E-readers portend the end or at least the downsizing of bookstores; ditto for music stores, Hallmark card stores, and other merchandise categories.
None of this is meant to suggest that we won’t still have neighbor centers with grocery stores, drugstores, coffee shops, etc. We will. But the endless expansion of the commercial strip — that homogenous blob of sign clutter and asphalt that leads out from every town — is reaching the end of its useful life. A new paradigm is being shaped, not just by regulation but by consumers and the marketplace. Commercial strips (i.e. road towns) with no beginning and no end, with no center and no way to get around except by car, are becoming obsolete in an era of shrinking stores, rising gas prices, discerning consumers and online shopping.
Distributed by Citiwire.net.
