No, the dark moments of 2008 are not yet behind us. The Prescott and Prescott Valley, Arizona retail markets appear to be booming…emphasis on “appear.”
Looks can be, and often are, deceiving. Our local retail shopping centers we may be repeating history by overbuilding in a flat market that cannot sustain the economic demands of retailers.
Hearing the Giant Sucking Sound
Prescott and Prescott Valley are now two distinct retail markets with minimal consumer crossover. Frontier Village was Yavapai County’s first major retail mall. Prior to its development consumers shopped at what was then called “Ponderosa Plaza” located on Gail Gardner Way between Willow Creek Road and Iron Springs Road. At this point in retail history, Prescott Valley was still in a state of retail infancy.
As a result of the housing boom
(circa 2000-2007) Prescott Valley surged in population and the retailers predictably followed the residential growth.
Today, Prescott Valley’s retail growth exploded with the addition of Fry’s, Kohl’s and the Super Walmart on Glassford Hills Road. In 2013-2014, Prescott Valley Crossroads on State Route 69 has added Sam’s Club, Home Depot, Dick’s Sporting Goods, Sprouts, TJ Maxx and Ulta…to name a few.
Gateway Mall opened on March 8, 2002, amidst one of the strongest real estate markets in history. Little did any of us know that tragedy was going to strike. Market havoc and upheaval would become the norm. Today Gateway Mall is hearing the giant retail sucking sound from the west and the east.
In a market that is clearly segmented between Prescott and Prescott Valley, the Gateway edifice, beautiful as it is, is gasping and groping for a go-forward plan.
For Gateway, it’s not even a question about competitive rent. The retail market has simply moved away from Gateway Mall, isolating it. The residential and business population centers feed Crossroads to the east and Frontier Village to the west. Crossroads is Prescott Valley’s retail mall. Frontier Village is Prescott’s retail mall, sharing some crossover consumer traffic.
Retail Presence and Consumer Habits
The fact is, retail development chases residential growth. Retailers go where the people live and where the businesses are located.
The Prescott retail market was once vertical with shopping centralized…residential growth redefined the model.
Retailers face more problems due to the growth of online retail. The growth of eCommerce is redefining the bricks-and-mortar retailer models. The old retail footprint is shrinking as retailers remodel their balance between the store and the webpage.
Consumers are increasingly defining the way things work. Social media has become a powerful communication channel where information comes in 140 characters, sometimes not doing justice to the message, admittedly.
Books, sunglasses, shoes, batteries, hats, tools, cameras, televisions, rugs, coats and just about anything imaginable is available on Amazon. Buy there, or, on eBay, and you go nowhere, you spend no time driving to and from, cutting time and the cost of fuel. Your order arrives with a refund guarantee and free return shipping if you need it.
Restaurants, however, are another subset of the retail market that is not impacted by ecommerce. Restaurants are in an expansion mode as consumers trade time in the isles with little or no in-store assistance for time dining out.
The triumph is the change produced by consumer shopping and buying behavior. It’s all good. Retailers are re-shaping their thinking and creating new blueprints for success. That’s good too.
The tragedy is that some of the retailers still don’t get it and will fall prey to the evolutionary inevitability of industry transformation.
Donald Teel is a Principal with Commercial Properties Northern Arizona, an Arizona commercial real estate brokerage and property management firm, headquartered in Prescott, Arizona. Need more information? Please call 1-928-777-8100 or, if you prefer, you may email Donald Teel