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Did Retailers Miss the Signs?

Did Retailers Miss the Signs?

As suburban populations grew over the past decade, retailers consistently ignored the trend in favor of cities.

In 2020, the onset of the COVID-19 pandemic in the United States sparked much talk of an “urban exodus” in which white-collar workers – freed from being tethered to physical offices by the rise of permanent work-from-home arrangements – would flee the urban cores of the largest U.S. cities in droves for the space and relative safety of outlying suburbs and smaller cities. So far, however, the most dramatic predictions of a tsunami of urban refugees have yet to be realized.

Both New York City and San Francisco, specifically, did see significant population outflows in 2020, and suddenly booming property markets in the suburbs surrounding a handful of other large cities (such as Chicago) suggest that the populations of these cities may also be set to decrease as more households decamp for the suburbs. Yet in many other large cities – such as Los Angeles, Houston and Phoenix – populations have remained relatively stable over the course of 2020, and warnings of an urban exodus seem to have been overstated. As a result, as 2021 progresses, expect a lot of ink to be spilled about how U.S. cities are poised to bounce back over the next few years as the country attempts to recover from the darkest days of the COVID-19 pandemic.

Yet while the grimmest warnings of an urban exodus are unlikely to be fully realized, certain factors are undoubtedly working against urban population growth – and in favor of suburban population growth – in the immediate post-COVID future. One is the rise of remote work. According to Euromonitor International’s “Voice of the Industry: COVID-19” survey, which was conducted in October 2020, 70% of North American-based professionals who responded to the survey indicated that they expect their businesses to expand remote working going forward.

Even if it is unlikely that most U.S. businesses will allow all staff to work from home all the time, it is a certainty that many businesses will allow employees to work from home more than they had before the onset of the pandemic. If workers commute to the office three days a week as opposed to five, they may be more inclined to live farther away from their workplace, especially if they can trade up to a larger living space in the process. This development is likely to boost suburban populations at the expense of urban cores.

By RetailDive.com, Bob Hoyler

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