Businesses

Lora Kelly, Atlantic Monthly - In spite of bleak predictions about the decline of the store as e-commerce blossomed in the 2010s—and a sharp drop in in-person shopping in the early 2020s, for obvious reasons—physical stores are still with us. And they are opening at a steady clip: Many more brick-and-mortar stores opened than closed in the first half of this year, according to one tracker. But as of late last year, the average retail space size was the smallest it had been in the nearly two decades since CoStar, a real-estate platform, started collecting the data. These smaller stores are not exactly competing with online retail: Instead, they’re adapting, and shrinking, to complement it.

Back in the age of department stores, people walked in expecting a bunch of products, in a range of sizes and colors. That was convenient (if occasionally overwhelming) for consumers, but inefficient for stores, which spend lots to acquire large spaces, staff them, and fill them with goods, Jonathan Zhang, a business professor at Colorado State, told me. Many big, well-known retailers have gone bankrupt in recent years. Their competitors, facing pricey leases and the looming threat of Amazon, tried something new. Over the past decade, major brands such as Nordstrom and Macy’s have started experimenting with much smaller locations. Since 2022, new retail leases for spaces larger than 25,000 square feet have gone down, according to CoStar data.