It’s true that the COVID-19 pandemic has hit the St. Louis retail market hard. But a new report from Newmark shows that there is hope in this market, too, as retailers adapt to the challenges of the pandemic by multiplying their revenue streams and embracing ecommerce.
According to Newmark’s first quarter St. Louis retail report, the retail vacancy rate in the St. Louis region jumped 60 basis points, ending the first quarter at 5 percent. Net absorption totaled negative 590,046 square feet for the past four quarters, according to Newmark’s research.
The average quoted retail rent in this market did increase slightly in the first quarter to $13.02 a square foot, a jump of 3 cents a square foot from a year ago.
While those statistics aren’t particularly strong, Newmark did report on some positives in the St. Louis retail market.
First, Dollar General is opening its second DGX concept store in the St. Louis region. DGX stores are designed to serve customers living in urban areas. This new 4,500-square-foot store will open at 622 Washington Ave. in downtown St. Louis.
Fast-casual Vietnamese eatery DD Mau will open its second location in the St. Louis area. The 3,150-square-foot restaurant will open at 20 Allen Ave. in Webster Groves this summer. Newmark represented DD Mau in the transaction.
The Edge Fitness Clubs will open its second location in the region at The Crossings at Northwest in St. Ann, Missouri. The club expects to open on March 27.
And what about the future of retail? Newmark says that retailers across the country — not just in St. Louis — are embracing new technology and adapting their business models. They’re doing this not just because of the COVID-19 pandemic, but to take advantage of customers’ growing reliance on online shopping, too.
Newmark pointed to the Flexera 2021 State of Tech Spend Report. This report found that companies plan to spend big in 2021 on cybersecurity, big data and analytics, automation and AI/machine learning. This change comes as online shopping and marketing shifts from an optional extra to an essential part of many retailers’ business plans.
Retailers are also focusing on customizing their products and shopping experiences to individual customers. Offers from retailers will be based on a variety of personal preferences unique to individual shoppers, while products will move from one-size-fits-all models toward individually designed merchandise. As Newmark says, those retailers that can offer the correct product at the right time will gain market share in 2021.
