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These Retailers Don’t Think The Industry Is Dead In The Bay Area

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Retailers love the San Francisco Bay Area. It has one of the most famous shopping districts in the world, Union Square, and San Francisco has one of the lowest retail vacancy rates in the country at about 2.4%. Even with many stores closing nationally, major retailers — from grocery to discount — are opening stores throughout the region.

These Retailers Don’t Think The Industry Is Dead In The Bay Area
Ross Dress for Less in El Cerrito, Calif., opened in mid-July.

“The Bay Area is attractive since there is lots of wealth, lots of jobs, lots of density, lots of bodies and lots of consumer dollars,” Cushman & Wakefield Managing Director Rhonda Diaz Caldewey said.

The Bay Area is not unique in its demographics and its ability to sustain retailers. Metro areas like the Bay Area, Seattle, Boston or New York have higher-educated communities with greater discretionary income, according to Transwestern Senior Vice President and Director of Retail Properties John Sechser.

Retail center owners are taking their cues from the local tech-centric demographic and are updating malls with entertainment concepts and adding tech amenities.

“Going out for dinner and lunch is clearly on the rise,” Sechser said. “[Millennials] prefer to mingle and network and have a meal prepared for them outside their meal space. That bodes well for the entertainment segment within those markets as well.”

This shift can be seen through the types of retailers expanding throughout the Bay Area. Entertainment concepts, breweries with restaurants and lounges, luxury theaters and food emporiums are among the retailers expanding in the region, according to Caldewey. Other retailers adding more stores include discount, grocery stores, sporting goods and apparel, and beauty stores.

Check out some of the major retailers expanding throughout the Bay Area below.

Grocery Stores

These Retailers Don’t Think The Industry Is Dead In The Bay Area
The Sprouts in Pinole, Calif., which opened at the end of December 2016

Bay Area shoppers have no shortage of options for grocery stores with Grocery Outlet, Sprouts, Whole Foods, Nob Hill Foods, Smart & Final, Trader Joe’s and Safeway adding locations. Sprouts has rapidly expanded in the Bay Area and opened a Newark store in July. It also has opened stores in Pinole, Albany and San Jose within the last 12 months.

Whole Foods has become a popular anchor tenant for mixed-use developments and is the anchor tenant for Irvine Co.’s Santa Clara Square Marketplace and a future location at the Town Center in Sunnyvale. It is also growing its 365 by Whole Foods concept in several locations, including as part of Nautilus Group’s development in Oakland, in San Francisco’s Nob Hill and part of a retail development underway in Concord. Whole Foods also is planning to enter new locations in San Francisco.

Discount Retailers And Thrift Stores

These Retailers Don’t Think The Industry Is Dead In The Bay Area

Discount stores are particularly popular in the Bay Area, especially with families having less disposable income due to rising rents. TJ Maxx, Marshalls, Daiso, Ross Dress for Less and Home Goods are among the discount retailers expanding throughout the region.

Ross Dress for Less and affiliate dd’s Discounts have rapidly expanded nationally over the last two years. The retailer plans to open 70 Ross and 20 dd’s Discounts in 2017, which includes several locations in California. Its new location near the El Cerrito del Norte BART station opened during the second quarter. Home Goods opened a store in Mountain View in June and plans to open a new location in San Jose in early August. Daiso has rapidly expanded its Bay Area footprint within the last two years, opening stores in Concord, El Cerrito and Emeryville. It also plans to open a store in Dublin.

Target recently opened two of its small-format stores at Stonestown Galleria in San Francisco and the Ravenswood Shopping Center in East Palo Alto.

Even local thrift stores are finding a niche within the Bay Area. Goodwill Greater East Bay will add about three stores each year for the next couple of years. It opened a Walnut Creek location in July and plans to add locations in Oakland and Fairfield by year’s end.

Entertainment Concepts

These Retailers Don’t Think The Industry Is Dead In The Bay Area
The interior of a The Lot movie theater

From food halls to bowling alleys, creating meeting places and experiences is one way owners of retail assets are trying to lure shoppers back to their centers. Malls around the Bay Area are trading closed department stores and empty parking lots for movie theaters and recreational activities. Hillsdale Shopping Center is adding a Cinepolis and Pinstripes, and West Valley mall in Santa Clara will add an ICON luxury movie theater with the malls' latest expansion projects. San Ramon will get The Lot movie theater in 2018 as the anchor to City Center Bishop Ranch.

Beauty And Fitness

Ulta Beauty, Ulta Salon Cosmetics

Beauty and fitness concepts have been cropping up around the region, especially small-format fitness boutiques and studios. Ulta Beauty has been rapidly growing both around the country and within the Bay Area. It opened a store in San Jose in May near Highway 85 and Almaden Expressway and also plans to open a store in Vallejo sometime this year. The beauty retailer has 25 Bay Area locations.

Berkeley’s Fourth Street, which recently underwent an expansion, has become a fitness and beauty hot spot with new tenants lululemon, Project Juice, SoulCycle and Marlowe. Orangetheory Fitness and Anytime Fitness are among the fitness centers actively expanding throughout the Bay Area.

Sporting Goods

Dick's Sporting Goods
Dick's Sporting Goods

Dick's Sporting Goods appears to be filling in the gap left after Sports Authority and Sport Chalet closed all of their Bay Area stores. Dick's has opened several locations throughout the Bay Area, most recently in Milpitas' Great Mall in June, San Jose in May and Sunnyvale in March. The retailer has over 50 stores in California. The retailer may slow its expansion plans due to the recent trends in retail and may open as few as 10 stores in 2019 nationwide.