What Economic Developers Need to Know About Retail

Are you ready to take retail development to the next level?

The retail industry plays a pivotal role in shaping communities and boosting local economies. Forrester predicts that in 2025, retail will grow to $24.9 trillion in total retail sales, with only one-fifth of that being online (Forrester).

For economic developers and community leaders, understanding the intricacies of retail development is critical to fostering long-term growth and creating vibrant, thriving areas where businesses and residents can flourish.

But retail isn’t just about stores and shopping centers—it's about creating destinations, attracting key businesses, and positioning your community as a hub of opportunity.

"You can look at the history of any community and their growth patterns to know when certain things came that encouraged the growth of additional retailers that stack on top of each other. It's not only that retail gravitates towards other, often better [retailers], but the bigger the retail, the greater the [community] impact," Mill Graves, Vice President, South Central Region, Retail Strategies.

Retail Education Summits

This fall, Georgia Power Economic Development collaborated with the Georgia Economic Developers Association (GEDA) and local partners to host Retail Education Summits with subject matter experts. Retail developers and consultants included:

• Andy Camp, Regional Director of Economic Development, Thomas & Hutton
• Mill Graves, Vice President, South Central Region, Retail Strategies
• Jacob Lang, President, Lang Commercial Real Estate
• Michael Rhodes, National Accounts Manager, Southern Company
• Edie Weintraub, Managing Director, Terra Alma

Graves kicked off the summits with guidance on developing retail attraction and retention plans for communities of all sizes. Continue reading for lessons shared during his session on "Retail Basics."

Understanding the Retail Landscape

Before diving into specific strategies for retail development, it's important to have a solid understanding of the overall retail landscape. This includes both national trends and local market dynamics.

Some key questions to consider include:

• What are the current consumer trends? Are people shifting towards online shopping or still prefer physical stores?
• What types of retailers are currently thriving in your area?
• How does your community compare to nearby areas when it comes to retail offerings?

By gathering data and insights on these questions, economic developers gain a clearer picture of what type of retail development may be most successful in their community and how supporting the retail industry can be different, and complement, industrial recruitment.

Identifying Retail Opportunities

Once you have a grasp on the retail landscape, the next step is to identify potential opportunities for growth and development. This could involve targeting specific industries or businesses that are currently lacking in your area or looking for ways to improve existing retail offerings.

Some keyways to identify retail opportunities include:

• Conducting market analysis: This involves studying consumer demographics, income levels, spending habits, and other data to determine what types of retailers would best serve your community. Several data subscriptions are available to research spending trends in a community; however, we encourage community partners to check with their Regional Economic Development Manager to see what research and information may be available before subscribing.
• Utilizing surveys and focus groups: These can provide valuable insights from residents about what they want and need from local retail options.
• Partnering with developers and real estate brokers to identify vacant properties and buildings for new construction or redevelopment. Be prepared before you speak with developers. Using marketing research can help you make a specific request in these discussions while demonstrating an understanding of what types of retail will work in your community and why.

Retail Development 101

Retail Needs Rooftops

It’s a common refrain in retail development circles that retailers need people. Retailers assess residential density, growth trends, and household incomes to determine whether a community has enough consumer demand to support their business. Simply put, a thriving residential base is often the foundation for successful retail growth.

But residential density isn’t everything. Communities need elements such as good schools, safe neighborhoods, and a quality workforce to attract new residents. These factors contribute to a higher quality of life, which aligns with the vision many communities have in their pursuit of sustainable growth. Whether it’s creating more housing options or investing in education and infrastructure, these are the building blocks for retail recruitment.

Why Everyone Wants a Trader Joe’s

Every community seems to have that one dream retailer—Trader Joe’s, a local specialty coffee shop, Whole Foods—that residents wish to see in their area. These sought-after businesses don’t just offer high-quality products; they signal an elevated community status that enhances economic vitality and attracts complementary businesses.

But here’s the catch—it doesn’t happen overnight. Attracting these types of retailers takes time, strategic planning, and a dedicated allocation of resources. Economic developers must collaborate with stakeholders, align incentives, and understand the long-term commitment required to make those dream businesses a reality.

The Retail Ripple Effect

Retail development doesn’t work in isolation. When key retailers or chains open a new location in your community, the ripple effect can be monumental. Not only do they create direct economic opportunities, but their presence often attracts additional businesses that want to benefit from the traffic they generate.

For example, restaurants often set up shop near grocery stores or large retailers like Target or Walmart to take advantage of high foot traffic. Shoppers running daily errands are more likely to stop for a cup of coffee or pick up lunch nearby. These local businesses then reap the benefits of increased sales, while communities enjoy a boost in tax revenue that can be reinvested in schools, roads, and other amenities.

Economic Impact Beyond Numbers

Retail is also a significant economic driver in terms of jobs and wages. From entry-level positions at fast food chains to management roles at high-end retail stores, the industry provides a range of employment opportunities. In the U.S., it’s estimated that roughly 1 in 4 jobs are tied to retail—a statistic that underscores the sector’s importance as an economic backbone.

Retail jobs aren’t just “starter” roles; they often pay competitive wages and help individuals develop critical customer service and business management skills. Furthermore, retail is an indicator of the broader economy’s health with consumer spending reflecting confidence and growth potential in your community.

Navigating Retail Development Challenges

Why Small Businesses Face Risks

For small businesses, especially local entrepreneurs opening coffee shops or boutiques, the stakes are high. Opening a retail establishment involves managing financial risks, sourcing reliable materials, navigating complex leases, and making countless other decisions. These challenges are only amplified by shifting consumer trends and economic fluctuations.

Economic developers can support these businesses by offering resources such as mentorship programs, financial incentives, and training workshops to equip entrepreneurs with the tools needed to succeed.

The Roadblocks of Retail Recruitment

Attracting national retailers and large-scale developments can be equally challenging. Companies meticulously evaluate potential sites based on extensive data—traffic counts, competitive landscape, demographics—and align their decisions with their long-term goals. Understanding the lingo, metrics, and decision-making processes of retailers is vital for economic developers to engage meaningfully and effectively advocate for their communities.

Retail Trends Shaping the Industry Today

The Rise of Smaller Spaces

Leasing trends show that two-thirds of retail leases executed in recent years were for spaces under 2,500 square feet. These smaller spaces reflect shifting consumer preferences, including a desire for convenience and local, specialized experiences. Developers should consider how these trends align with their community’s needs and existing assets.

E-Commerce Meets Brick and Mortar

While online shopping continues to grow, physical retail is far from obsolete. Hybrid models, such as click-and-collect services, provide a blend of e-commerce convenience and in-store experiences. Retailers understand that having a physical presence helps build customer loyalty and provides visibility that online platforms can’t replicate.

The Power of Downtowns

Never underestimate the value of a strong downtown. This area often serves as a community’s unique retail fingerprint, differentiating it from neighboring cities filled with the same chain stores. With a bit of walkability and charm, downtowns can become economic engines filled with cafes, boutiques, galleries, and more. Investing in downtown development not only boosts local businesses but also creates a sense of place that residents and visitors cherish.

Becoming Proactive in Retail Recruitment

The Role of Economic Developers

For economic developers, sitting back and waiting for retail to roll into town isn’t an option. A proactive approach requires a solid understanding of market dynamics, retail terminology, and site selection criteria. Partnering with organizations like ICSC (International Council of Shopping Centers) or the Urban Land Institute can offer valuable insights, tools, and connections to improve your strategy.

Incremental Retail Growth

Small steps often lead to significant progress. You don’t need to open a massive retail center overnight. Focus on incremental growth by recruiting a few key tenants, revitalizing downtown spaces, or providing incentives for local entrepreneurs. These efforts will lay the foundation for long-term retail success.

Building Relationships

Retail is a relationship-driven industry. Developers who engage with retailers, brokers, and industry professionals will have a better chance of successfully introducing new businesses to their communities. Attend industry events, schedule face-to-face meetings, and foster genuine connections to make your city or town stand out.

Shaping the Future of Your Community

Retail development is a complex but rewarding piece of the economic development puzzle. By understanding the needs of businesses, leveraging data to tell your community’s story, and proactively engaging in recruitment, you can create environments where both businesses and residents thrive.

Economic developers have the unique opportunity to shape the future of their communities—whether it’s by attracting that dream Trader Joe’s, cultivating downtown charm, or boosting employment with new retail hubs. The key is to start today, armed with knowledge and a clear vision for where your community can go.

Are you ready to take retail development to the next level?

Partner with experts, attend industry events, and foster relationships that will help your community achieve its full potential. Not sure where to start? Contact your Regional Economic Development Manager at Georgia Power to learn about retail-related events and resources for your region.