In the 1970’s and 1980’s, there was a great urban flight as families moved from urban town centers into the suburbs.  Suburban shopping centers started growing significantly during this time in response to the growing demand.  In the suburbs, customers are more reliant on automobiles for transportation as public transportation is less available.

Fast-forward to this decade, and there is a definite trend among young families to return to the city.  Urban environments offer more lifestyle choices, more job opportunities and more unique shopping options.  In addition, homeownership is down 66% among people under 44 as the cost of homeownership is too much. Renting is more attractive to some people because of the flexibility and freedom it provides.  Young families are also choosing to live urban lives as they can be closer to their children while they are at work.

Now, after decades of building in the burbs, many retailers are moving back into the cities.  Nordstrom Rack is opening urban locations in Columbus, Cleveland, Milwaukee, Chicago, Seattle, New York, Boston, Birmingham, and Washington D.C. Whole Foods is opening new stores in Detroit, Chicago, and Newark.  Both Target and Walmart have focused expansion on downtown locations with smaller store formats.  Retailers have to alter their assortments to meet the needs of the urban shopper as well as accommodate the smaller store format.  For example, Home Depot found that customers in its urban stores wanted smaller ladders, grills, and paint than its suburban shoppers.  Food retailers have also found that some large size containers do not fit in smaller apartment refrigerators.

Younger customers have great spending power and their priorities and needs have changed from the traditional suburban environment.  Retailers are following their lead and trying valiantly to meet those changing needs.

Discussion Questions:

1. Which retailers are opening stores in inner cities?

2. Why are they opening them?

3. How are these inner city stores different than their suburban counterparts?

 

SOURCE: Walter Loeb, Forbes.com, December 28, 2012