National Retail Expansion in Upper Midwest Hits Roadblocks

In the Upper Midwest, the common progression of national retailers is to enter the Chicago market first, then go to the Twin Cities, then spread out to any one of a number of smaller markets, including Des Moines, Cedar Rapids, IA, Fargo, ND, and Rochester, MN. That’s according to retail brokers who talked Tuesday about their respective markets at the North Central States Idea Exchange, a program sponsored by the International Council of Shopping Centers in Bloomington, MN.

“When they get to Chicago, we are the next stop,” said John Johannson, a retail broker with Bloomington, MN-based Welsh Cos. Among the new retailers who’ve entered, expanded or are looking for space the Twin Cities market are Bed Bath & Beyond, Costco, JoAnn Etc, Wickes, Pep Boys, MARS Music and Von Maur department stores. “When they get to the Twin Cities, the next step is Des Moines or Fargo or other cities in the region,” said Mike Scott, a retail broker with Bloomington-based United Properties.

A common issue facing new retail development, even in smaller cities, is neighborhood opposition to big box development. Scott Olsen, a leasing representative with Cedar Rapids-based Skogman Commercial Group, said that Target has been turned down twice on the north end of Cedar Rapids, and is going before the city council again this week. Home Depot also has been turned down on one site and is on hold on with another.