2023’s top-performing retail hub is…
When it comes to recapturing lost retail sales, The Big Apple is shining!
An analysis of key retail hubs by analytics provider Placer.ai reported that the core-based statistical area (CBSA) of New York-Newark-Jersey City posted a 1.3% increase in store visits in January. And while the region dipped back into negative comparisons in February through May, its drop-offs were three percentage points lower than the national average.
One of the biggest drivers of this trend was a strong return flow of office workers into Manhattan. More than 86% appeared at their desks in January (compared to 38% in 2022), and nearly 32% came to work in February—almost twice as many as workers who did so in that month last year.
And traffic in key retail corridors swelled along with the office tide. May store visits to Times Square & 42nd Street, North 5th Ave., and the Flatiron District rose, respectively, by 12.8%, 10.2%, and 13.8%--an overwhelmingly revived tally compared to a nationwide increase of just 1.7%.
Interestingly, New Yorkers who left their homes and offices permanently during the pandemic set off another retail resurgence north of the city. Thousands of them landed in Connecticut, and that state’s three key CBSAs have since experienced unheard-of traffic increases, according to Placer.ai.
New Haven, Hartford, and Bridgeport have seen their populations rising at a steady clip over the past three years, and many of the newcomers hail from New York City neighborhoods with higher median home values. Placer.ai layered Zillow housing data onto Connecticut’s population statistics and found a pattern of high-income homeowners moving into more affordable areas. They sold their expensive abodes and bought cheaper ones in The Constitution State, leaving them with high disposable incomes to spend on home improvement projects and shopping trips.
In the New Haven CBSA in March 2020, store visits were 165% higher at Lowe’s and 65% higher at Tractor Supply than they were the previous month. March 2021 proved another boom-time for the two home improvement chains, which posted 100% traffic rises over April.
Silicon Valley proved the shopping Mecca of California in the first half of the year. The San Jose-Sunnyvale-Santa Clara CBSA posted shopping center traffic gains of as much as 5% in February through April. Not counting a 2.8% February increase for San Francisco, all other major California CBSAs experienced traffic declines throughout the period.
Fat wallets appeared to be the reason for the crowd surge in the Valley. Nearly 45% of trade areas in the San Jose CBSA hold populations whose median household incomes surpass $200,000 a year. By contrast, only about 25% of shopping center trade areas in California consisted of households maintaining that income level.
In the Georgetown neighborhood of Washington, D.C., residents are not only affluent, but young. That has made this zone in the Washington-Arlington-Alexandria CBSA a retail laboratory for digitally native brands looking to establish their places in physical retail.
The Zip Code that contains Georgetown University students and affluent young families has a median age of 19.9, compared to 34.8 for D.C.as a whole. This young and tuned-in demographic provides DNBs with plenty of internet-savvy local residents eager to engage with their favorite online brands in person. Because so many of them are students who will move on after a few years, DNBs count on them to seed their brands nationwide.
In the first half of this year, several youth-leaning brands charted impressive traffic gains over 2022. Anthropologie recorded a 45% increase. Everlane and Warby Parker were up by more than 25%. And Patagonia, Dr. Martens, and Outdoor Voices saw percentage increases in the teens.
“Consumer demand for in-person shopping remains strong, though foot traffic data indicates that brick-and-mortar retail performance in 2023 exhibits significant regional variations,” Placer.ai noted.