Friday, January 5, 2018

Center for an Urban Future releases the "10th Annual State of the Chains" report

I am always eager to read the 10th Annual State of the Chains report issued by the Center for an Urban Future (CUF). While focused on New York City, the comprehensive nature of the data and analysis have implications for other cities as well. The fact that one-fifth of all national retailers closed stores in the past year is simply astounding and confirms what we have also noted in our own research nationwide. Additionally, food remains a driver of retail growth, but the findings in the report offer some more specificity - growth has occurred in bakeries, mobile phone chains, frozen yogurt, and fast-food/fast-casual chains. On the other hand, electronics, office supplies and shoe stores, items that are quite easy to compare and purchase on-line have seen the most shrinkage. As we move forward there are more questions to answer - such as how much more food can we support before the market is fully saturated? And after that, what else takes its place? These are all questions we will be thinking about in the coming year.

Back to the report....CUF Executive Director Jonathan Bowles' summary is included below an offers a good synopsis of the report, which can be found here.

From Jonathan Bowles....

Our report, published on Thursday, finds that the number of national retail locations in the city increased for the ninth consecutive year. However, the report shows that a growing number of national chains appear to be facing new challenges from online competition. Although the city’s economy overall has been expanding, a fifth of all national retailers on our list closed stores in the past year, and only one-in-seven retailers increased their footprint—the smallest share since we began keeping track a decade ago.

Our report finds that food establishments drove much of the growth in chain stores over the past year, while retailers that compete most directly with online outlets—such as shoe and electronics stores—experienced significant contractions.

This year’s report includes a special analysis of how the chain store landscape has changed over the past decade. Among the key 10-year trends:
  • There are now 952 chain coffee shops in New York, 65 percent more than a decade ago, led by Dunkin’ Donuts.
  • Fast-casual dining chain restaurants in the five boroughs increased 105 percent over the past decade, from 141 to 289 stores.
  • The number of fast-food restaurant chains grew 14 percent, from 1,107 to 1,261 stores.
  • Food-related chains are responsible for 41 percent of the growth in national retailer locations in New York over the past ten years, the most of any category.
  • There are fewer than half as many electronics shops in New York today as there were in 2008: down to 53 locations in the five boroughs, compared to 144 stores ten years ago.
  • During the same period, the number of shoe retail chains decreased 16 percent, from 239 locations to 207.
  • The number of chain bakeries has more than tripled over the past decade, from 55 to 161. This is in addition to the growth in fast-casual chains.
  • Chains that specialize in frozen yogurt, such as Red Mango and 16 Handles, have expanded by 283 percent—the largest growth rate of any retailer category. In 2008, there were 12 chain yogurt stores, and today there are 46.
  • In contrast, ice cream chain stores have been steadily declining for a decade. The number of ice cream shops decreased from 376 in 2008 to 311 in 2017, a 17 percent drop.
  • Mobile phone service chains added 621 locations in the past decade, going from 233 locations in 2008 to 854 in 2017.
  • Office supply chains have lost 25 percent of their locations, falling from 63 stores to 47.

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