Viewpoint | Future Cities
Washington DC Metro Retail Market Trends
September 19, 2023 10 Minute Read
Retail sales remain on the rise, a bright spot in an otherwise challenged economic climate with inflation. Strength in consumer spending has translated to strong demand for retail space. CBRE recently reported on national trends stating “…the sector is projected to grow this year by a net total of 2,400 stores, accounting for approximately 40 million sq. ft. of retail absorption. Retailers absorbed more than 81 million sq. ft. of space last year, the second-highest annual total since 2016.”
The Mid-Atlantic retail market is reflective of this positive trend as over 143 select retail openings have nearly doubled the select 72 closings since the beginning of 2023. These openings do not include many of the highly anticipated grocery stores and restaurants that have already been announced to open later in the year in key submarkets, such as growing international grocer Lidl in Tysons and Pastis, a New York favorite from restaurateur Stephen Starr, slated for a December opening at the Union Market district.
While return to office numbers have stabilized in recent months throughout Washington D.C., Downtown submarkets (the CBD and East End) have shown some of the greatest improvement in office vacancy. In turn, the increased foot traffic in these areas has helped keep the restaurant scene resilient. With celebrity chefs and original concepts coming to market, Downtown has proven to be a popular destination for diners. Though other neighborhoods –particularly those like Georgetown with a high mix of uses—showed stronger post-pandemic foot traffic numbers, Downtown held its own in terms of average monthly visitors and restaurant openings, inching closer to pre-pandemic marks in 2023.
Historically, retailers in Downtown have relied upon the weekday daytime population to drive sales. During the pandemic, as employees worked remotely, many restaurants and retailers closed their doors – notably over 170 locations since 2020. In comparison, more than 90 opened during the same time frame. Of the 90 openings, more than 65% were restaurants. Since the beginning of 2023, however, that narrative has flipped as there have been more than double the number of restaurants to open compared to closed in Downtown. As many businesses resumed office or hybrid work, along with continuingly increasing tourism and spending, the downtown DC restaurant scene has turned a corner.