Retailers Planning To Open More Stores Than They Close For First Time Since 2017, Report Finds

The Amazon Fresh grocery store in Franconia, Virginia.
Courtesy of Dochter & Alexander Retail Advisors
The Amazon Fresh Grocery Store In Franconia, Virginia.

Fresh off a strong holiday weekend for in-person sales, a new report shows retailers are planning to open more brick-and-mortar stores than they close this year for the first time since 2017.

The report, from retail data firm IHL Group, is welcome news for commercial developers who for years have watched e-commerce seemingly demolish the demand for in-person shopping.

The findings may indicate a new equilibrium is forming between online and in-person shopping as retailers begin to understand the value of physical stores as distribution hubs, The Wall Street Journal reported.

The numbers show department stores and specialty retailers are still suffering, but their closures are balanced by strong demand for new spaces from mass merchants, food, drugs and convenience chains, according to the WSJ.

That includes major discount retailers like Five Below, Dollar Tree and Dollar General, the latter of which planned to open more than 1,000 stores in 2020.

It's not all doom and gloom for legacy fashion brands either. Department stores and specialty retailers plan to close 469 more locations than they open in 2021, far fewer than the record 6,787 net closures last year, according to IHL's report.

Part of the turnaround has come from landlords willing to offer more flexible leases to retailers in order to entice them back out onto the street. The changes began when big-name brands first began to back out of their leases in the 2010s, when the slide in retail openings first began.

In an interview with the Wall Street Journal, Toni Roeller, senior vice president of in-store environment and visual merchandising at Dick’s Sporting Goods Inc., said the brand would be opening more locations with experiences like batting cages and climbing walls to encourage customers to stick around after shopping online.

“People research online, but many times they want to try before they buy,” Roeller said.

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