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State of the Retail Market
In 2020, retail vacancy was only up slightly for Missoula retail, whereas a lot of the US saw more dramatic increases. We did see some tired retail concepts close their doors for good. But, these closures provided the vacancy for new tenants to move into or expand in the retail space.
While it will take some time for retailers to earn back consumer trust, Missoula seems to be making that bounce back pretty heartily. The Missoula Downtown Association even reported 20 new businesses opening.
The development of retail property is looking up for Missoula. The coming years show quite a bit of new square footage in planning and permitting. Part of what’s pushing this is actually the big boom of e-commerce in the past year.
A retail trend that isn’t going anywhere is the fusion of an online and in-store experience. There are some obvious issues with going completely online for your shopping. No in-person customer service, quality control issues you might have otherwise noticed in the store, or poorly represented colors or fabrics online. Issues like these perpetuate demand for retail stores.
The BOPIS model, or buy online pick up in store, also bolstered brick and mortar store sales. Companies like UberEats and GrubHub are an extension of the model. Delivery apps allowed many restaurants to not only operate but see sales increases during the peak of the pandemic.
While food delivery app use peaked in March 2020, downloads rose again in December of 2020 – with orders staying steady or growing in a recent survey. Restaurants took a hit in the past 12 months but still need space to meet the growing demand for in-person and delivery eats.
A final trend worth noting in 2021 is the medical industry continued a slow move into the retail landscape. Consumer habits have pushed medical clinics to retail shopping centers and mixed-use areas versus a concentration on medical campuses. Medical has identified some appealing components of moving into the retail space: better visibility and access, as well as easy parking.
Finally, Missoula’s trade area is one of the largest in the state. Missoula pulls from the Bitterroot Valley to the bottom of Flathead County, which makes it an attractive place for national brands. The domino effect is real for retail – once a few established brands come into the market, you’ll see several follow. With Chik-fil-A and WinCo getting their footing in Missoula, it’s likely that we’ll only see more expansion in the coming months and years.