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Retail Trends
The City of Morgan Hill has an inventory of
1.3 million square feet of retail space in
eight shopping centers. The City is home to
many major national retailers including
Target, Home Depot, Wal-Mart, TJ-Max,
Ross Dress-for-Less, Dick's Sporting Goods,
Hobby Lobby, and DSW. In addition to the
existing retail space, two key life-style
shopping centers, Cochrane Commons (also
known as the Target Shopping Center) and
the Madrone Village Shopping Center
(home to Peet's Coffee and Five Guys
among other life-style tenants) have
obtained entitlements for an additional
425,000 square feet of retail that has not
yet been built.
The types of retailers that Morgan Hill and
other local communities can expect are
influenced by trends in the national and
regional retail industry. The industry has
been in flux over the last decade. Some of
these wider industry trends include:
•
O
nline shopping has put pressure on
conventional retail businesses.
As more
retail sales shift online, many national
retail brands have consolidated and
demand for certain types of brick-and-
mortar retail stores – for example, book,
music, and video rental, and electronics
stores – has declined significantly. In
shopping centers across the Bay Area
and the nation, demand for new retail
space is increasingly driven by stores that
face little or no competition from online
sales, such as restaurants, groceries, hair
and nail salons, and other personal
services. At the same time, many
communities throughout the nation have
struggled with large retail spaces being
vacated by retailers that are no longer in
existence. For example, Morgan Hill has
struggled for years to fill three, vacant,
25,000 square foot retail spaces
(currently there are only 2 large spaces
available).
•
Preferences for retail space have evolved.
Some of the aging strip retail centers in
the South Bay no longer meet the space
needs of national and regional chains.
These types of tenants tend to favor
wide storefronts with high ceilings and
highly visible signage, located in
concentrated nodes with high traffic,
good visibility, and easy vehicle and
pedestrian access. Older retail buildings
that do not meet those criteria may
struggle to attract tenants, although in
some instances they may also provide
more affordable space for smaller,
independent businesses.