It's not every day that you hear about big-box retailers coming to major U.S. cities.
That's because most of them are either already in (or close to) major shopping hubs with large populations or have good reason not to put down stakes in a given area.
DON'T MISS: Here's what it's like at the most shoplifted Walgreens in the U.S.
Take, for example, Saks Off Fifth, the highly popular discount offshoot from the luxury department store Saks Fifth Avenue. The retailer said earlier in 2023 that this fall it would shutter its store at 901 Market St. in San Francisco.
Other chains have followed suit, including Old Navy, Banana Republic, Crate & Barrel, AmazonGo, Anthropologie, Whole Foods, and Office Depot. Each retailer has cited its own relatively diplomatic reason for vacating, but the list includes several shared factors, including poor performance, high operating costs, rising crime rates, and public- and employee-safety concerns.
The retailers that stay, including drugstores like Walgreens (WBA) -), are forced to chain up simple goods like frozen food to combat a rise in theft at some locations.
In Q2 2023, the retail vacancy rate in San Francisco was 6%, up from 5.2% the year prior.
It's even worse for offices, as an increasingly remote-first workplace makes tech-forward jobs -- some of the most popular in San Francisco -- easy to do from anywhere. The office vacancy rate as of June 2023 was more than 31%.
IKEA bucks the trend and moves in
Not all retailers are afraid of the big-bag doom loop, however. Swedish discount furniture store Ikea says it will move in to San Francisco later this August.
“We appreciate the excitement and support from the community and can’t wait for our customers to experience the new store full of affordable home furnishings and solutions that reflect who San Franciscans are and how they live," Ikea San Francisco Market Manager Arda Akalin said in a news release.
The new store, located at the Union Square high-end-shopping hub (where many stores are currently vacating), will span 52,000 square feet and three stories. It will feature 27 individual rooms for shopping, browsing, and enjoying those cult-favorite cinnamon buns.
'San Francisco is a resilient city': Mayor Breed
""We know the future of Downtown will look different, but we also know that San Francisco is a resilient city that embraces change and is always working to build what comes next. We are proud to welcome Ikea to be part of that future," San Francisco Mayor London Breed added.
Breed has been staunchly critical and pessimistic about San Francisco's future, though her tune has changed since the pandemic.
"When you are in a room full of people, I would say probably anywhere between 90 and 95% of folks could raise their hand and say that their car has been broken into, or they’ve been a victim in some capacity or another," Breed said of crime rates in 2021.
"That is not OK. That is not acceptable. It is time that the reign of criminals who are destroying our city, it is time for it to come to an end. And it comes to an end when we take the steps to be more aggressive with law enforcement, more aggressive with the changes in our policies, and less tolerant of all the bullshit that has destroyed our city."
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