The D.C. area’s retail market will remain strong despite a downturn in the housing market and a projected national economic slowdown, according to a year-end report by real estate research firm Delta Associates. The region added 5,600 retail jobs and saw $429 million worth of investment in grocery store-anchored shopping centers over the past year — both higher than 2006 totals.
“Overall, it’s just a very healthy retail market,” said Elizabeth Norton, mid-Atlantic research director for Delta Associates. “It continues to be a lot stronger in the suburbs just because they have the space to build new centers.”
Since 2000, office space has grown 128 percent and housing units have swelled by 38 percent in the area’s outer suburbs — Frederick, Prince William and Loudon counties — but retail space has grown by only 18 percent, Delta Associates said. That leaves room for further retail growth just to meet existing needs. While Northern Virginia and suburban Maryland surpass the national average of 20 square feet of retail space per person, the District lags far behind with only 7.8 square feet per person, the report said.
“D.C. has 70 percent of our workers coming from a different area, and during that time we kind of have a captive audience,” said Natalie Cofield, director of business development for the Washington, DC Economic Partnership.
Cofield said the District doesn’t have adequate daytime retail services for workers and that retailers have also underestimated the economic strength of areas like Southeast D.C., leaving those neighborhoods underserved.
WDCEP’s recent economic development report indicates that the city’s retail tide may be turning. More than 800,000 square feet of new retail space will be built in 2008, 60 percent more than was built in 2007 and the highest amount since the organization began tracking retail in 2002. High-income households and steady job growth anchor the region’s retail scene, Norton said, though she predicted area shoppers may make different choices because of the slowing economy. For example, growth in the area’s organic food market slowed almost 5 percent in 2007, she noted, while sales at traditional supermarket, which are generally lower-priced, jumped a percentage point.
