PROPERTY
Heading south :
The rise of tertiary cities and what it means for retail
Small towns and suburbs in Texas , Arizona and Florida are booming , thanks to a population shift away from large northern and West Coast cities to the south . And retail is following .
By Michael Baker
M ore than three years after the outbreak of Covid-19 and everything that came with it – mask mandates , store closures , Zoom fatigue , and sourdough starters , just to name a few – the deep and lasting impact of the pandemic is starting to become clear .
In some instances , the pandemic temporarily accelerated trends that were already well under way , and once it receded , the pace of change eased up again , like a tide that came in and went out . The rapid growth of e-commerce , which exploded during the Covid peak years but then returned to a more trend rate of growth in 2022 , is a good example of this .
The same thing happened with domestic migration patterns in the US . Population shifts that had been going on for years – from large northern and West Coast cities to the south – picked up speed in 2020 and 2021 , and then slowed in 2022 and 2023 . The flow of people could actually start to reverse if companies in the major cities manage to get their workers back into offices .
But even if some of these domestic migrants return to their previous urban and coastal environments , there are still good growth opportunities for high-quality retailers in smaller cities and suburban areas in different parts of the country .
And , as is often the case , the first-mover advantage will go to those who correctly anticipate where the population is moving , and why .
Pandemic winners and losers To a certain degree , the story of pandemicdriven migration is still being written . The situation with remote workers remains in flux , and while the pressure to return to the office is mounting – from impatient companies with empty headquarters and leadership teams that believe in-person interaction is vital for getting the best outcomes – the population is unlikely to return to what it looked like in 2019 .
44 www . insideretail . us September 2023