Has retail rebounded from the pandemic slowdown? Recent economic reports indicate an upward trend for retailers. Julie Hatch Fairley certainly has more confidence.
Fairley’s JuJu Knits was open for 20 weeks when the pandemic brought business to a halt for the retailer on Fort Worth’s southside.
“We just closed for eight weeks as mandated,” said Fairley, owner of the shop that provides yarn. The store then was open by appointment only and limited the number of shoppers inside the space.
JuJu Knits, which sells yarn and other fibers and also holds classes, survived the pandemic and just recently signed a new lease and added a second part-time employee.
“I’m just now more confident going forward,” Fairley said. The store — along with other yarn retailers — recently held its annual Yarn Crawl, where stores in the area participate in sales and special events. For many of the stores, the event makes up 15% to 20% of annual sales. The event is usually in the fall, but switched to spring this year.
“We were pretty much flat compared to the previous event just a few months earlier, so that made me feel more confident about where things are headed,” she said.
Fairley is not alone in having more confidence. According to a recent report from JLL, several markets are seeing increased market rent growth in retail. The Dallas-Fort Worth area, Charlotte and Raleigh-Durham all show about 30% rental growth, according to the report.
“We continue to see strong fundamentals in retail across DFW since the pandemic subsided roughly in October 2020,” said Chris Gerard, senior managing director, JLL capital markets, in Dallas. “That’s when we started hearing from our leasing team that tenants were in expansion mode once again.”
Retail jobs are also returning. According to a report from Deloitte, retail sales fell 20% from February to April of 2020 during the pandemic, taking plenty of jobs as stores limited hours or closed.
According to the Texas Workforce Commission, retail jobs, which are included in the leisure and hospitality section, are showing the most year-over-year growth, increasing 13.7% from March 2021 to March 2022.
Terry Montesi, CEO of Fort Worth’s Trademark Property Company, a real estate developer in the area and around the country, said he is seeing retail return following a slowdown during the pandemic.
“Retail leasing is quite strong because the retail sales have really come back, so a number of retailers and restaurants are coming back and expanding,” he said.
Montesi said the restaurant and bar category is particularly strong and other service-type retailers, such as wellness, beauty, self-care and boutique fitness are also coming back after many were closed during the pandemic.
That retail growth is taking place even though many retailers are having trouble filling jobs, Montesi said.
“That is just something everyone is having to deal with,” he said.
Grant Gary, president of brokerage services at Fort Worth-based The Woodmont Companies, said construction costs and labor costs continue to be a challenge for the retail market, but those have so far not slowed growth in the Dallas-Fort Worth area.
Gary said the pandemic has caused some changes in the retail space.
“We’re seeing a lot of growth in the restaurant sector, but in particular for restaurants that have a drive-thru,” he said. “Some of those trends were in motion before the pandemic, but that just accelerated the trend.”