Center City Still Lacks Big-Box Stores, But Makes Other Retail Gains

Center City residents doing their holiday shopping in the coming weeks will have many local options for niche, independent and small footprint retailers. But if they want a big-box experience — aside from Target or a grocery store — they will likely need to leave the neighborhood.

The increasingly populous and wealthy section of Philadelphia is no longer the catch-all shopping destination it was when department stores lined East Market Street in the early 20th century.

“This incredible spending power that we have in Center City is not being entirely captured in Center City,” said Center City District Vice President of Economic Development Clint Randall, speaking at a press conference tied to the release of a new report on the neighborhood's retail market. 

The population in the core Center City neighborhood has grown 38% to 70,000 over the past 15 years, according to the report. Greater Center City, including adjacent neighborhoods, saw its population increase 29% to 211,000 over that span. 

The average annual income in the neighborhood ballooned 50% to more than $152K in the decade leading up to 2022.

High-end retailers have taken note and opened up shop on the west side of Walnut Street, where the report found 86% of storefronts are occupied. The neighborhood-wide occupancy rate rose to 84% after more than 130 new businesses opened so far this year.

Those included the nation's first Jordan World of Flight location and an Abercrombie & Fitch, which was previously the second-most requested chain in the neighborhood after Zara, according to a survey CCD conducted between last holiday season and this spring. 

The top of the list of most-requested chains in the neighborhood was dominated by clothing retailers, but lower down are several big-box outlets that would be considered everyday staples in many suburban communities. That includes HomeGoods and Dick’s Sporting Goods tied at No. 13, Michaels and Home Depot tied at No. 24, and Best Buy at No. 26.

But based on his conversations with brokers, Randall isn’t expecting any of those companies to move into Center City anytime soon.

“Broadly speaking, the big-box category has pulled back from doing city deals,” he said.

Some of those types of companies have also been exiting Center City. Grocery chain Giant announced plans to shutter its Market East location in November 2024. Macy’s followed suit with its Wanamaker Building location in January.

Wawa, CVS and Starbucks also shrunk their footprints in the neighborhood this year, while chains like Rite Aid and Iron Hill Brewery have shut down entirely.

MSC is working on behalf of TF Cornerstone and Alterra Property Group to lease the retail portion of the Wanamaker Building, much of which is slated for an office-to-residential conversion.

But the brokerage doesn’t appear to be focused on a major tenant that could replace Macy’s in one fell swoop.

“TF Cornerstone and Alterra are courting tenants with the intention of really filling all three floors of the Macy’s footprint, but in a multitenant way, whether that's food and beverage, traditional retail, experiential or, most likely, a mix of the three,” Randall said.

While many people who move to Center City don’t bring a car with them, 72% of respondents to CCD's survey said vehicle ownership is sometimes important because it allows them to access retail outlets that aren't available within walking distance.