'A pretty profound turnaround': Marshfield, Wisconsin Rapids, Green Bay at forefront of a revival of brick and mortar retail
A proposed mall redevelopment in central Wisconsin that struggled to get off the ground in 2018 is now moving forward, a reflection of nationwide trends that show brick-and-mortar stores are making a comeback after years of decline.
Ned Brickman, president of Midland Management, the co-owner of the Marshfield Mall, proposed a plan in 2018 that would have demolished the building and replaced it with a strip mall. That plan stalled as the company had trouble getting retailers to commit to the project amid the online shopping boom.
Now, just four years later and the upheaval of the pandemic in the past, redevelopment of the old mall is yielding very different results.
Brickman said the new plan would use the existing structure to create space for a few big-box stores that would have their own exterior entrances. This time, a few retailers have already committed to the space and there is no shortage of interest in the project, Brickman said during a May 10 presentation to Marshfield Common Council.
"Here and in lots of places, people have realized that retail is not dead," Brickman said at the meeting. "People are still wanting to shop, people are still wanting it. Amazon hasn't taken over the world and this is actually still a viable thing for the future."
That's a trend that experts have seen nationwide.
Mark Mathews, the vice president of research development and industry analysis for the National Retail Federation, said that the growth of brick-and-mortar retail stores outpaced that of ecommerce in 2021.
"That's a pretty profound turnaround," Mathews said.
Retailers have adapted to what shoppers want
Over the last few decades, as online shopping became a popular and convenient alternative to in-store shopping, many came to believe that brick-and-mortar stores might become a thing of the past.
Yet, the retail industry as a whole is growing at a rate not seen in more than 20 years, according to the National Retail Federation. Between 2010 and 2019, retail sales grew by about 3.7% annually. In 2020, sales grew by 7%, and in 2021 it grew by over 14%. The federation expects sales to increase this year by almost 7%.
In recent years ecommerce dominated the retail industry, but brick-and-mortar retail is now making up a bigger portion. In 2021, the number of new stores announced by U.S. retailers, about 8,100, was more than double the roughly 3,950 closings announced. As of early June, nearly 5,000 stores had opened in the U.S. this year, and 920 stores had closed, Mathews said.
Mathews said the pandemic contributed to the return of in-person shopping in that it's given people more of a desire to get out of the house.
It's also impacted how much they buy when they go out. Many people began buying things in bulk at the beginning of the pandemic in fear that supplies of key items would run out. Mathews said that there are still people doing that 2½ years on, but now inflation is playing a part as well. People want to stock up before prices go up even further.
Equally important, Mathews said, retailers adapted to changing customer behavior during the pandemic and positioned themselves to drive growth with new ways to pay for goods and increased use of self check-outs.
Meanwhile, the distinction between online and in-person shopping is also becoming less apparent, Mathews said. In a type of hybrid shopping experience, many big-box stores, such as Walmart and Target, offer customers the option of ordering their items online and picking them up at the store.
Mathews said it's important to recognize that the rationale for having stores is changing. In addition to in-person shopping, the stores also are supporting e-commerce — local stores are fulfilling the online orders and are becoming loading centers, too.
These shifts in approach are an indication that retailers are paying attention to what shoppers want. At its very core, retail is about making consumers happy, Mathews said, and versatility is what makes them happy.
"We as consumers have evolved in terms of how we want to interact, how we want to buy, how we want to have things delivered to us," Mathews said. "Retailers are reflecting that."
Taking advantage of empty stores
Many retailers are also taking advantage of existing real estate, moving into buildings that used to be the home of other major retailers
In Wisconsin Rapids, the former Shopko building has been mostly vacant since it closed in 2019. The property is owned by Cool Investment, LLC, an Arizona-based company. Tom Richards, a partner of the company, said several retailers are interested in splitting the 100,709-square-foot space.
Richards said that they've noticed retailers in the smaller markets they serve moving into second- and third-generation buildings that can be redesigned to fit their needs. That decision saves money in the face of the rising construction costs, he said.
Cool Investment has been very active in smaller markets in Midwest, Richards said, and activity throughout the pandemic, and now, has been positive. Though online shopping is convenient, it has slowed down since COVID, he said.
The growth of interest in making new use of empty store fronts has played out across the state. Here are a few examples:
- Developers of Artist & Fare plan to purchase, renovate former Younkers in Plover
- Tractor Supply Co. now open in former Shopko in Oconto
- Former Fox River Mall tenant moves into revitalized Toys R Us building
For malls, it's evolve or be replaced
In recent years, malls across the country have been shuttered or forced to scale back.
In Marshfield, a city of about 18,000 people, the local mall took a hit in July 2017 when J.C. Penney announced it would close its store. Less than year later, Bon-Ton Stores Inc., the parent company of Younkers, announced that it would close its Marshfield location along with hundreds of other stores across the country.
The mall faced the same headwinds as malls elsewhere, but it was able to remain open while malls in neighboring cities, such as Wisconsin Rapids and Wausau, were closed and demolished. Those sites are being repurposed for other uses.
The difference: Marshfield's mall retained two big-box stores in Kohl’s and Ashley Furniture and was able to hold on to larger chains like Bath & Body Works and Claire’s as well as a few popular local businesses.
The plan for redeveloping the mall would include space for the current tenants.
Mathews said malls that were built around the 1970s that don't have the modern amenities are the ones that are struggling or have closed altogether. The bigger malls or shopping centers that have more than just shopping to offer have survived.
"They have restaurants and businesses and apartments," Mathews said. "It’s almost like a community that they’re building. That's an expectation of modern consumers and younger consumers."
Malls in bigger cities have always done well incorporating many different types of stores and experiences for customers.
At Bay Park Square Mall in Ashwaubenon, a mix of restaurants, entertainment and retail businesses have opened since the beginning of 2021. The mall has welcomed national chains like Dave & Buster's and Chick-fil-A, regional businesses like Blade's & Boards Axe Throwing and Bubblelicious, and local companies Dirt Juicery and PLAGRND Clothing, according to Francesca Callahan, a spokesperson for the mall.
The mall has also has filled anchor tenant spaces that had been vacant since Younkers and Shopko left; Steinhafels Furniture took over the empty Younkers store, Dave & Busters is in the old Younkers Furniture Gallery, and a Hy-Vee store is preparing to open in the former Shopko.
The mall is seeing "real, positive momentum" and steady growth, Callahan said. They plan to announce new tenants in the coming months, she said.
"We’re noticing shoppers continue to return to in-store shopping as they are better able to touch, feel and experience their favorite retailers"