In the world of brick-and-mortar retail, “Another One Bites the Dust” seems to be the soundtrack.
That’s part of a natural progression as business and consumer preferences evolve, say real estate agents who specialize in retail properties.
“Are you going to see some fallout from less superior concepts as better concepts come in? Yeah. That’s the circle of life,” said Andrea Nilson, a retail specialist in Boise with the Cushman & Wakefield commercial agency.
But as the companies shutter or downsize hundreds of stores, Boise often escapes the list of doomed locations.
Macy’s, J.C. Penney, Sears, Abercrombie & Fitch, Aeropostale, Payless Shoe Source and Radio Shack each have kept at least one Boise store alive during waves of mass closures in recent years. Some have closed nearby stores, as Macy’s did this spring in Nampa.
Notable exceptions are Sports Authority, Hastings, Kmart and Wet Seal. But all those chains except Kmart were going under entirely, and Kmart still has a store in Nampa.
Survival of the fittest mall
Many indoor shopping malls around the country have lost their footing since the Great Recession, and some have been converted to new developments. Karcher Mall in Nampa remains open but has fewer national brands and struggles to fill vacancies.
Meanwhile, the Boise Towne Square mall has kept its anchor stores, and it has plenty of traffic through its parking lots.
“I’ve been told that this mall does extremely, extremely well — that they always have a waiting list of retailers that want to move in there,” said Bob Mitchell, a retail property specialist at Thornton Oliver Keller in Boise. “There are some markets where the malls have lost their flair, but in Boise, that’s obviously not the case.”
So what makes the Boise mall different?
“It’s well-located and it has a really good tenant mix,” Mitchell said.
The mall doesn’t seem hurt by the arrival of a nearby competitor, The Village at Meridian outdoor mall.
Specialty retailers with just one Treasure Valley store — Anthropologie, Urban Outfitters, Lululemon Athletica and Chico’s — are pulling up roots from Downtown Boise and moving to The Village, where they can better capitalize on the county’s westward expansion.
So far, though, the Boise mall has retained stores such as H&M and Victoria’s Secret as their companies open second locations at The Village.
Is Boise special? Kind of
The Treasure Valley has long been considered a third-tier market by national retailers. With the area’s rapid population growth, development surge and low unemployment rate, that view is changing.
“I think we’re on the cusp of going from a tertiary to a secondary” market, Nilson said.
Most big-box national retailers have only a few locations in the Boise area. In contrast, major metro areas where national chains have 30 brick-and-mortar locations apiece are “over-stored,” Nilson said.
At the same time, Boise’s stores continue to draw shoppers from elsewhere in Idaho, said Pam Eaton, CEO of the Idaho Retailers Association.
When a chain’s executives weigh their options, they’ll ask, “Is one of these stores cannibalizing the other?” And in Boise, the answer is often no, Nilson said.
Nilson believes the Treasure Valley could have kept a second Macy’s store if it hadn’t moved almost a decade ago to a larger space at the Nampa Gateway Center.
“If they would have stayed in the Karcher Mall, which was the right size for them, rather than increasing to the behemoth ... they would still be open and successful,” she said. “We have enough population to support that.”
Eaton said the Treasure Valley’s demographics “match these stores’ business plans better than other cities.”
And because many national chain stores here are smaller than the 100,000-square-foot or larger stores in other metro areas, “it’s easier to sustain,” Eaton said. “The leases or building costs are often less, and we have a favorable business climate — so it’s less expensive and easier to do business in Idaho. ... And although the Boise area has had a ton of growth and new retailers open over the last decade, there’s still not as much choice or competition as many of the other cities across the nation.”
It’s not just Amazon
There’s one part of retail that isn’t being affected as drastically: food. The Amazon equivalent of dining out isn’t making a dent.
You can order a pizza online. You can have groceries delivered. You can sign up for a meal delivery service like Blue Apron. But people are still flocking to local restaurants. Locals still want to grab a meal on their way home or have a meal prepared for them.
“Even though maybe larger boxes are being directly impacted by online shoppers and Amazon and things of that nature, the restaurant side of things has just been growing like crazy,” Nilson said. “Everything from sit-down, to fast food, to fast casual, to Gyro Shack, to Human Bean, to kiosks in every way, shape or form. The restaurant side of things has been continually expanding.”
Supermarkets are opening, expanding and investing in local stores, too.
Nilson cites as examples the massive Albertsons overhaul of a market on Beacon and Broadway streets, its new store at Barber Station, and its interest in a former Shopko at Fairview Avenue and Eagle Road.
As the Treasure Valley grows, Nilson sees signs that retail is thriving, not dying.
H&M’s decision two years ago to open a second local store, in Meridian, “is a really good indicator” of retailers’ faith in the region, she said.
But she and others are skeptical that the big-box department store model can survive as it is, even in Boise.
“Sears, J.C. Penney and Macy’s,” Mitchell said, “it looks like their run is probably over.”