The nation’s chain stores have slowed their expansion in New York City, according to the Center for an Urban Future.
The eighth annual edition of the organization’s State of the Chains study, which ranks the national retailers with the most store locations in New York City, found that the rate of new storefronts for NYC’s top retailers “slowed considerably” over the past calendar year.
While the number of locations did increase between 2014 and 2015, the change was a mere one percent. The growth between 2013 and 2014 was a 2.5 percent spike. But while the drop off may seem alarming, it might not paint the entire picture.
“You have huge leases all over the city. I think that tells a different story,” Faith Hope Consolo told Real Estate Weekly. Consolo is the chairman of the Retail Group at Douglas Elliman.
“It may be locations are down, but sizes are definitely up,” said Consolo. “We’ve seen more flagships stores and we’ve seen more expansion of existing locations. Overall, it’s more of a positive fixture than a negative.”
Consolo pointed to brands such as The Gap and Banana Republic as retailers who have expanded on their current locations recently. Meanwhile, Dunkin Donuts remained New York City’s largest national retailer and widened its lead over second place Subway; with 568 stores citywide, Dunkin Donuts now has 124 stores more than any other retailer in the city.
For the eighth consecutive year, Dunkin Donuts remained the largest national retailer in New York City as a whole, with a total of 568 stores, according to the study.
Over the past year, the coffee retailer had a net increase of 32 stores in the city (a six percent gain). Subway is still the second largest national retailer in the city, with 444 store locations, but it now has 18 fewer stores than last year.
Starbucks has more stores in Manhattan than any other national retailer, with 220 locations. In each of the other boroughs, Dunkin Donuts tops the list — it has 171 stores in Queens, 149 in Manhattan, 135 in Brooklyn, 80 in the Bronx and 33 on Staten Island.
“Food is now established as fashion,” said Consolo. “Everything from casual dining, fast food, coffee, juices, they’re all in a growth mode because that’s what the millennials are seeking.
“There’s more money spent on take out/delivery and that includes the Dunkin Donuts and Starbucks type. It’s all repeat business.”
The report also shows that the Bronx had the largest year-over-year increase in chains stores among all boroughs, with Brooklyn close behind.
Two boroughs — Manhattan and Staten Island — had a minor decrease in chain stores over the past year.
Between 2014 and 2015, the number of chain store outlets in the Bronx increased by 3.3 percent, rom 914 stores in 2014 to 944 stores in 2015.
The Bronx’s success could be a small harbinger of big changes for Manhattan’s northern neighbor.
“One of the things I’ve heard for years is that some of these retailers aren’t in New York because they have specific requirements for parking and they can’t get it (in Manhattan). Now you’re seeing huge developments going up in the East part of the Bronx and (those retailers) are coming,” said Scott Plasky, retail specialist at Marcus & Millichap.
The lower rental prices in the northern borough, combined with the more flexible properties are helping to fuel speculation that this market is the next tertiary area to see a sudden rise in value.
Plasky said that while the Bronx may not attract high-end retailers, landlords will continue to see low-cost, transaction-based businesses want to occupy the borough’s storefronts, as evidenced by the surge in fast food and coffee shop-type tenants.
The other national retailers in the city to round out the top ten for volume include: MetroPCS (with 323 stores), Duane Reade/Walgreens (307), Starbucks (307), McDonald’s (232), T-Mobile (217), Baskin Robbins (214), Rite Aid (197), and GNC (175). In all, there are now 14 retailers with more than 100 stores across the city, a decrease from 16 retailers with at least that number last year.
Five national retailers that were included in this report last year closed all of their New York City locations over the past 12 months. They are Baja Fresh, Ecko Unltd., Frederick’s of Hollywood, Montblanc, and Underground by Journeys.
The Center’s analysis shows that the 300 retailers that were listed on last year’s ranking expanded their footprint in New York City from a total of 7,473 stores in 2014 to 7,550 stores in 2015, an increase of only 1 percent.
While this is the seventh consecutive year with a net increase in national chain stores in the five boroughs, this year’s rate of growth was lower than all previous years except 2013 — when the number of chain stores rose by 0.5 percent.