CHICAGO – Luxury and value are the two classes of retail in Chicago that will provide the best building opportunities in 2013 even as the middle gets squeezed, according to a new report by Englewood Construction. Englewood, a commercial builder based in Lemont, IL, also sees an uptick in restaurant development next year.
Both ends of the retail spectrum will be looking different next year as demographics and tastes change. In the past, high-end buyers shopped in a completely different area than bargain hunters. The report predicts that these two types of shoppers will be strolling down the same street in 2013.
“No longer will new or renovated shopping centers only cater to one set of buyers or income bracket, but rather, most locations will offer a wider variety of retailers,” says Englewood’s President William Di Santo in a press release, pointing to how the city’s “Magnificent Mile” is evolving.
“Michigan Avenue used to be reserved only for luxury retailers,” Di Santo says, “but as the economy, demographics and shopping habits change, so too do the retailers and the new Chicago retail construction jobs we take on.”
Internet shopping has hurt the bottom line of many brick-and-mortar stores, causing rising vacancy rates. This has spurred owners to look at bringing in restaurants as a way to fill up their empty spaces, the report said.
“Fast-casual food franchises inside shopping centers and new stand-alone restaurants on out lots have become a major driver of commercial construction projects,” says Di Santo. “Restaurants still offer an experience and entertainment value that the online market cannot compete with.”
The fate of the middle-market retailers and restaurateurs, however, remains unclear for 2013, according to the report.
“In the past, [the middle] has generally been the most successful market to start new retail construction projects due to their popularity,” Di Santo says. “But as growth builds in the other two ends of the spectrum — value and luxury stores, the middle-market is the most susceptible to a downturn.”