Shopping Season Approaches, But Sluggish Economy Hangs Over Mag Mile's Nascent Comeback
It’s the early weeks of the crucial holiday season for retailers in 2025. Though Chicago’s revitalized retail scene may anchor hopes on big consumer spending to back its real estate decisions, it may be more likely to find coal in its stocking this year.
Chicago retailers have slowly come back to the Magnificent Mile as the city’s legendary shopping strip has started to see some signs of life. But with economic uncertainty swirling and consumer confidence diminished, the fledgling recovery could be stifled even as gifting season approaches.
“Unfortunately, the expectation is that it's going to be a little bit more muted this year in terms of consumer spending and the shopping that we're all going to be doing, just given the overhang of some of the economic uncertainty that we are living through,” said Damla Gerhart, principal and central regional managing director at Avison Young.
Consumer confidence declined again in September, falling to its lowest level since April, according to The Conference Board’s Consumer Confidence Index. Consumers’ views of their current financial situation also weakened in September, posting the largest one-month drop since The Conference Board began to collect this data in July 2022.
Deloitte is forecasting a 2.9% to 3.4% increase in total 2025 holiday sales compared with the same period in 2024, which would be the smallest increase since at least 2016 and far below last year’s 4.2% sales growth.
A lot is on the line: Since 2019, November and December have represented nearly 20% of annual retail revenue nationwide, according to Avison Young’s 2025 holiday retail trends report.
“Holiday 2025 won’t be defined by runaway growth,” the brokerage wrote. “Success will come from delivering value, flexibility, and reassurance to consumers navigating a cautious season.”
Even as retail vacancy has stayed high in certain key Chicago corridors since the pandemic, big-name brands have bet on the city’s retail recovery.
Uniqlo announced plans this week to open a flagship store on the Mag Mile as part of an 11-store U.S. expansion. Late last year Warner Bros. signed a lease for 10K SF across multiple levels at 676 N. Michigan Ave. to open an interactive Harry Potter exhibit. Spanish clothing retailer Mango agreed to occupy about 17K SF at the neighboring 664 N. Michigan Ave.
“Despite the sort of doom and gloom that's out there, I was actually pleasantly surprised yesterday on walking Mag Mile that it was vibrant, it was busy,” said Meghann Martindale, principal and director of retail market intelligence at Avison Young. “People were walking with shopping bags. That's always the biggest indicator.”
The vacancy rate on the Mag Mile was 29.3% as of July, according to data from Kirsch Agency provided to Crain’s Chicago Business. That dropped from nearly 34% in 2023.
Martindale said the biggest challenge with bringing the vacancy rate down on the Mag Mile is that a lot of the vacant space consists of very large floor plates. Landlords have to lean into new strategies to reutilize the large chunks of former flagship stores to meet retailers’ current demand for smaller footprints.
“We're really looking at mixed-use as a densification and an occupancy mechanism to create that retail vibrancy,” Martindale said.
The recovery across the Mag Mile has been uneven, Martindale said. The retail scene in the area is hard to assess holistically because it is made up of so many independent owners, unlike a single-entity shopping center.
Still, with nearby Oak Street’s tighter vacancy — Chicago YIMBY reported the area faced a less than 10% vacancy rate in January — and growing momentum, that energy could start to spill back toward the Mag Mile, Martindale said. Some retailers are coming back to consider new urban city stores and looking at new pockets of opportunity, she said.
“It's going to take time for that whole stretch to really revitalize,” Martindale said. “You will see it somewhat sporadically based on the demand and the types of specific retailers.”
