- As retail anchor stores have continued to close locations, sell to private equity, and feel the sting of ecommerce and fewer brick-and-mortar stores, there are an increasing number of southern and midwestern retailers making a push to the Houston market to backfill these locations, alleviating fears of mass vacancies.
- These brands include Dirt Cheap, Ollie’s Outlet, Rose’s Discount Stores — each of which of which operate in the 20,000-sq.-ft.-plus space, and all with similar business models of selling comprehensive discounted, wholesale, and outlet style merchandise.
- Grocery stores are becoming more neighborhood-oriented, eschewing the “all-in-one” style. The successful rollout and expansion of El Rancho Supermarkets may be a natural move for Randall’s, to not only invigorate its declining market share, but also to reposition itself in neighborhoods that have become more diverse and dynamic.
- Asian and African Grocery stores continue to grow in size add in number of stores, and thrive as they serve both their primary customer base and to a growing interest from a non-core customer base.
- Major players like HEB, Kroger and Whole Foods are expanding, while Target and Walmart are spending money to upgrade their in-store food quality offerings, trying to become a higher-quality “shop in store or online” experience — closer to the customer formats boasted by Aldi, Trader Joe’s and Sprouts, each of which continue to grow in Houston.
- The advent of Lidl Grocery stores is still to come in 2020, as they plan to find a slice of Houston in between Walmart Neighborhood Market & Aldi. Food and grocery habits are changing rapidly.
Fitness & Well-Being
- The fitness industry continues to expand in almost every direction, from national fitness clubs in full-sized format growth, discount “all-in-one” large format boxes, smaller circuit-focused concepts of 1,500 to 5,000 sq. ft. with brands like F45 Fitness, Orange Theory, Regymen, and 9 Round Kickboxing, to name a few.
- Niche-related fitness is in explosion mode, from cycling and barre concepts to Pilates and even senior-oriented age segmented concepts. Fitness is huge, it’s growing, and it would stand to reason these concepts work in concert with each other more than in competition.
Suburban and Urban Construction
- New suburban retail construction in the past 12 months has continued to be focused primarily in a “360-degree” pattern along the Grand Parkway ring. The distribution along the Grand Parkway includes major nodes of development at cross intersections including at Northeast/59 Freeway in New Caney, North/45 Freeway in the Woodlands, Kuykendahl Road in the Springwoods Village area, Morton Ranch, and W Bellfort in Aliana–Richmond.
- New urban retail construction is rapidly growing in a vertical and dynamic way, as the 100,000-plus per year population boom over the past year has produced not only new Houston residents, but among the highest growth rates of under-30 age residents in the country. Projects being developed on once-unthinkable $50-$100-per-foot land sites can sustain retail development, without having to go multi-story, and this is without the city of Houston pushing to overhaul parking code requirements as urban shopping/dining patterns change at a blinding pace.
- Retail centers are starting to look into ways to monetize and optimize capital improvements to centers that signal a cultural shift tenants are looking for. Installations of 21st century landscaping, lighting, and even inexpensive but effective signs of adaptation like electric car charging stations in parking spaces are becoming not only cost-effective, but revenue-generating. Look for this trend to catch fire between now and 2025.
Senior Vice President
Team Leader | Retail Services