Retail Bubble ?

[Delawaredave]

I am amazed about the continued retail building in our area.  I keep think the area "must be saturated" - then they break ground on another strip mall.

In my work travels, just seems like I'm seeing a rise in vacant retail properties.  I've also seen some "national restaurant chain" closures (Applebee's, etc) - which I've never seen before.

I saw a table somewhere which had "retail square foot per capita".   Vaguely remember numbers:  India had 3 square feet/person, Europe in the teens, US had 40-50 square feet per person of retail space.

Maybe saturation isn't possible with "consumption craved" Americans.

Bubble possible ?

 

[Texas Proud]

Maybe... maybe not...

I work at mega bank... we are opening lots of new branches... previously, we would never look at putting a new branch within 2 miles of another... that was our service area range... but now, we do put one in if there is a good spot available (which there usually isn't because all have been taken a long time ago)... and we make MONEY at them..

I do not know about the mom and pop type stores... but I would bet that a national firm (not a franchise) is going to make money at almost all of their stores they open...

 

[astromeria]

In the US, shopping seems to be most peoples' primary hobby. Something tells me that's rarely the case in other countries (except where food is typically purchased fresh daily).

 

[TromboneAl]

The thing that I see around here is several stores that are vacant, and have been for over a year, and right next to them they build a new building for a Starbucks, Blockbuster Video, and/or Subway.

 

[Donzo]

I live in a smallish mountain town in the seirra mountains.  In the past year or 2 a Home Depot, TJ max, Applebees, 2 Starbucks, Big Lots, 2 Longs Drugs,2 more car dealerships, 2 sushi resturants, numerous other resturants, 3 more large groceries stores, 2 more furnature stores, 2 car washes etc. have gone in!  And there is no sign of slowing down - I just don't see the populaton to support this kind of growth - I have seen my cost of living go down though...competition is a good thing.
I think we will see empty retail space in the future.
Other small towns in this area are similar in regards to growth.

 

[IHateCNBC]

I live in an area that has 4 Super Walmarts that are open 24 hours within a 10 mile block and they are all packed at any hour you go there.

 

[dumpster56]

I am amazed about the continued retail building in our area. I keep think the area "must be saturated" - then they break ground on another strip mall.

In my work travels, just seems like I'm seeing a rise in vacant retail properties. I've also seen some "national restaurant chain" closures (Applebee's, etc) - which I've never seen before.

I saw a table somewhere which had "retail square foot per capita". Vaguely remember numbers: India had 3 square feet/person, Europe in the teens, US had 40-50 square feet per person of retail space.

Maybe saturation isn't possible with "consumption craved" Americans.

Bubble possible ?

You saw an applebees CLOSED? Where?

 

[Martha]

I work on lender financing of these types of projects in suburban Minneapolis/St. Paul area.  There has been tremendous growth in population in the suburbs for the past few years.  The rural, small town and medium size cities in the midwest are losing population but the big urban centers are gaining.  This attracts retail and retail also attracts further growth.  

I live in northern Minnesota in a town of about 80,000, with the population stagnant.  Little retail growth here.  No superWalmart. No superTarget.  ALL my financing work for the past two years has been for suburban twin cities developments.  

 

[youbet]

I have seen my cost of living go down though...competition is a good thing.

Ditto to that Donzo!

In my close-in suburban area, there are grocery stores (major chains and independents) and food specialty shops literally stacked up like cordwood.  Competition is fierce. Service and quality are great.  Sale prices are frequently so low that it really is worthwhile to pay attention to the store fliers and plan the current menu accordingly and stock up on non-perishables.

I have no idea what the corporations and entrepreneurs were thinking when they all moved in so close to one another, but it seems to have been beneficial for consumers.  Interestingly, they all seem to be surviving........     

 

[VoyT]

There's a strip mall in my neighborhood that's been open more than a year and it has one tenant, and no signs of anyone else moving into the other storefronts.

As for a closed Applebees ... that's kind of surprising, tho I read recently that the chain and others of that kind are seeing a drop in business. Story blamed it in part on rising gas prices, and said folks were shifting to the more "upscale" fast food like Panera Bread..

 

[astromeria]

The owner of our local cheap Chinese takeout told us that business has fallen off about 3-5% this year. He's been located here a long time and there aren't any new Chinese restaurants to compete with him. Since I've seen Mexican workmen there picking up big orders of spicy chicken wings, I thought maybe with building slowing there are fewer workmen to feed. But he says it's not that--it's the ordinary family traffic that's less. Also orders are a little smaller (maybe it's my diet--no more eggrolls or spare ribs with my special soup!)

 

[Delawaredave]

You saw an applebees CLOSED? Where?

I think I saw it in Ephrata, PA - however, might have been another city or another chain................

 

[Delawaredave]

I work at mega bank... we are opening lots of new branches...  previously, we would never look at putting a new branch within 2 miles of another...

That's something else I don't understand - why there are bank branches springing up all over.   They must be very profitable.

I haven't been inside a bank in 2 years.   

 

[Texas Proud]

To the person saying the population is not growing... you are wrong... I am not going to look it up at this late hour, but the population of the US is growing rapidly... if I remember correctly (and I could be very wrong).. there should be another 30 million people in the next (or two) decade... (I think it is two.. I do not think we are growing at 10% a year... man, can not remember anything at this hour...)

As for bank branches.. yes, they make about 1 to 2 mill a year for each branch.. or else the manager is replaced..

 

[Helena]

In the past, older shopping centers would
fall into urban decay with most of the stores
closing and moving closer to newer growth
areas.... here in the DFW area, this urban
decay seems to be increasing... swallowing up
more and more not so old shopping centers...
the bank branches and supermarkets seem to
be the first to go... this is now happening in
my neighborhood and I am getting nervous
as property values usually follow suit... I just
moved here from across town from an area
that suffered a similiar fate... now I guess I
will have to move again... where to this time...
Mars ?

 

[larry]

I think I saw it in Ephrata, PA - however, might have been another city or another chain................

One (an Applebees) recently closed in Collierville, TN.

 

[Alan]

I live in an area that has 4 Super Walmarts that are open 24 hours within a 10 mile block and they are all packed at any hour you go there. 

I live in a town of 90,000 just north of Houston and we have 2 super- Walmarts and a regular Walmart all centered on a radius of about 3 miles from the town center. They have just announced that they are building a new super-Walmart next to the regular Walmart (and it will be replacing it when built). Lots of other retail stores still being built as well.

 

[P.S.]

   As for a closed Applebees ... that's kind of surprising, tho I read recently that the chain and others of that kind are seeing a drop in business. Story blamed it in part on rising gas prices, and said folks were shifting to the more "upscale" fast food like Panera Bread..

I heard this on NPR last week...apparently analysts have noted a drop in consumers eating at middle America chains, specifically mentioning Applebees, and this was being attributed to gas prices and less disposable income. On the other hand, the upperclass/affluent are not as affected by gas prices so upscale eating establishments have not reported a drop in traffic.