New York—Small retail stores across the country are facing unprecedented pressures that go beyond the normal ebb and flow.
High rents have finally cracked a crop of retailers that had adapted and weathered the intrusion of the internet and chain stores thus far — think shoe stores, fabric stores, electronics stores.
“Most of them made many adjustments and continued to thrive in their neighborhood,” said Ruth Messinger, former New York City council member and small business advocate.
“Then they got hit by a rent increase that they just couldn’t afford.”
The impact is not only devastating to the character of communities, but it weakens the economic fabric and guts the middle class, experts say.
The losses are being felt in cities nationally and globally.
“In cities as diverse as Oakland and Nashville, Milwaukee and Portland, Maine, retail rents have shot up by double-digit percentages over the last year alone,” according to an April report by the nonprofit Institute for Local Self-Reliance (ILSR).
And if those pressures weren’t enough, consider the behemoth that is taking a bite from every pie — Amazon.
“Amazon is also different in that throughout human history, commerce has been connected to place. Business activity and trade have always been near where people live,” said Stacy Mitchell, co-director of ILSR. “Amazon represents a disconnection of commerce from place that’s unlike anything that’s come before.”
While consumers might be hailing Amazon as a super-convenient retail option, the online giant is the number one concern for 70 percent of independent retail business owners, according to a national survey conducted by the ILSR earlier this year. Amazon’s net sales revenue grew from $8.49 billion in 2005 to $107 billion in 2015.
Why Losing Independent Retailers Matters
Mitchell said the nation has lost more than 100,000 independent retailers in the last 15 years, and the trend is concerning.
“Independent retailers contribute much more to the health of our local economy…