Downtown retail doesn't work the way people think

Given the prevalence of the development of shopping malls over the past 70 years, central business districts (downtowns) have long since been supplanted as major retail centers, with the exception of a few major cities like Manhattan (New York City), Chicago, and San Francisco (Union Square), where the retail stores remained high profile destinations, especially for visitors--not residents.

Very early in my involvement in such matters, I saw a presentation by a person from an urban economics consulting firm, where he said that the average office worker supported 1.5 s.f. of (convenience retail) and 5.5 s.f. of (quick service) restaurant.

In short you needed many thousands of workers to support a small amount of retail, and what the office workers were interested in was pretty limited, pharmacy, dry cleaners, shoe repair, etc.

Similarly, with restaurants, the support was for quick service places like Quiznos, Corner Bakery, Potbelly, Au Bon Pain, etc., not high quality sit down restaurants.  Although again, larger commercial districts were capable of supporting some.

Then there was a study of Southwest DC's business district, which found that 65% of the time, government workers brought their lunch, making it that much harder to support retail and food in districts dominated by federal buildings.

And that was before the impact of e-commerce.

And it turns out office workers aren't particularly intrepid.  They just aren't that interested in exploring the area around where they work.  And shopping in the area where they work, or coming home from work in the work city, as opposed to the residential city, doesn't seem to be of interest either.

And that was before covid, which has accelerated work from home.  Most commercial districts have half the number of employees coming to work that they did before.

So it's difficult for other retail categories like apparel, home furnishings, etc., to survive in downtown centers.  Frankly, they do better in areas with residential-supported commercial districts.

So to me, that Target is closing a downtown Philadelphia store after seven is years no suprise ("Target to Close Center City Store. Here's Why," ).  Fewer office workers.  Office workers aren't that interested.  E-commerce.  Not enough residents nearby to act as frequent customers.

Similar to the announcement of Walmart closing a store on the outskirts of Downtown DC, my reaction was it just wasn't located close to lots of potential and frequent customers ("Walmart to close one of its three DC stores").