Atlanta’s Shopping Centers Reflect Changing Consumer Preferences
Atlanta is recognizing that the nature of retail has changed. Shopping centers and mixed-use projects in Atlanta emphasize restaurants, fitness, entertainment and service retail. The changes in the market are happening quickly and consumers want the urban environment where everything they need is at their fingertips.
The BeltLine is providing an unmatched opportunity for this business model. The Eastside trail proves that Atlanta has welcomed this type of retail. New developments without a true parking option or main street access have started to capture the population who use the BeltLine on a daily or weekly basis.
Ponce City Market encapsulates experiential retail, taking an existing warehouse structure and transforming it into a food hall, rooftop entertainment and a place to work, congregate or live your daily life. It’s not a shopping center — it’s a destination. The modern shopping center isn’t about being a shopping center, it’s about providing all you need at once.
Restaurants, Food Halls
The restaurant business is always evolving, and the variety in Atlanta is unparalleled. Yet, while there are an abundance of restaurant openings, there are still several that will need to reinvent themselves to stay relevant.
The biggest buzz has been food halls. They’re trendy, but will the excitement wear off in a few years? Food halls work for our current generation of employees. Will GenZ turn them down? Saturation is attributed to high increases in rental rates and the abundance of choices without the density. These factors could push Atlanta to a saturation point in which not everyone can survive, regardless of popularity.
Challenges Lie Ahead
In some of the most attractive submarkets, there is virtually no “high class” vacancy. This lack of space has driven rents to an all-time high without the sales to support them. The most sought-after markets have been Buckhead, Central Perimeter, West Midtown and Alpharetta. There are parking challenges in several of these markets, and while Atlantans do not want to adapt to parking decks or using transit, they will be forced to as the trends and growth continue.
Another major challenge not just affecting Atlanta includes, of course, the elephant in the room: e-commerce. The retailers that will find success will be those that embrace both brick-and-mortar shopping and an online presence.
Some big box retailers are shrinking their physical footprints and “right-sizing” their stores. With pick-up-in-store services, retailers can shrink inventory and move toward a distribution center format. This works for concepts such as grocers, which are learning today’s younger shoppers don’t always need to walk the aisles.
The key is to always keep tomorrow’s consumer in mind and build what will work five years from now. Atlanta has done this well with submarkets or projects including the likes of Downtown Woodstock, Ponce City Market and Avalon. Rents and space constraints remain problematic, but the overall outlook for retail in Atlanta is overwhelmingly positive.
— By Amy Fingerhut, First Vice President of CBRE