As Recovery Continues, Chicago Retail Outperforming Other Major Cities

Courtesy of Starbucks
Starbucks Chicago Roastery, 646 North Michigan Ave.

Retail foot traffic in the four largest U.S. cities was hitting 2019 levels throughout much of the second half of 2021, then thinned out after the arrival of both the delta and omicron variants, according to the location analytics form Placer.ai.

But Chicago has fared a bit better during the past few months than cities such as New York City and Los Angeles. Foot traffic in its retail outlets bounced back in the fall, a recovery which has continued into the winter, Placer.ai found.

“Of the four major cities analyzed, New York City — where the retail sector relies heavily on tourists and office workers — suffered the heaviest blow,” according to a recent company report.

Summertime activity was good for New York retailers, Placer.ai stated, with traffic levels in July equaling the traffic seen in July 2019. The rise of the delta variant seemed to discourage shoppers there, and September traffic declined by 7% when compared to 2019, and in December traffic levels were still down 4%. Los Angeles saw similar declines.

Chicago retailers avoided these severe disruptions. Stores here were already outperforming their counterparts on the coasts as of last summer. Traffic in July 2021 was up about 2% over the July 2019 level, Placer.ai found. By August, traffic was up 4%. And after suffering a blip in foot traffic across much of the fall shopping season, by December retailers were back to equaling the market’s performance in December 2019, just before the pandemic’s onset. Houston retailers saw nearly the same trends.

Retail landlords have also fared better in Chicago, according to a market conditions report released by JLL in January. Retail rents in Chicago increased 0.9% between Q1 2020 and Q3 2021, the firm found. That’s not much, but rates in New York City and Los Angeles during the same period declined 1.3% and 0.5%, respectively.

“But behind the overall retail visit numbers lies a more complicated reality,” Placer.ai added in its report.

Some retailers in struggling cities are doing great business, the company’s researchers found. At the same time, other brands with strong nationwide foot traffic still see fewer customers in otherwise healthy cities.

“Chicago, which has seen the strongest retail recovery of the four cities analyzed, saw Target and Starbucks underperform their nationwide average,” according to Placer.ai.

Foot traffic in Starbucks’ in Chicago was up 7.2% in November over the November 2019 level and up 1.1% in December over the traffic recorded in December 2019. Although that’s an improvement, it’s still far behind the more than 20% gains during the same period seen for Starbucks’ in New York City and the 7.7% boost seen in Los Angeles’ Starbucks in December.

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