The vacancy rate for store and restaurant property in Chittenden County has doubled since 2019, a sign that the pandemic and online shopping are hitting retailers hard.
The retail real estate market was soft before the pandemic, said Tony Blake, the principal broker at the Burlington real estate company V/T Commercial. He said parking problems and safety concerns have deterred customers from downtown Burlington in recent years. Online shopping has been making a dent in brick-and-mortar store sales everywhere for about a decade.
Then COVID-19 safety measures closed stores and restaurants altogether in 2020.
“It was almost like the perfect storm,” Blake said. “COVID really blew this thing apart, and retail took it on the chin.”
The percentage of unleased retail space in Chittenden County increased from about 5 percent in June 2019 to 10 percent in June 2021, said Brad Minor, a principal with the Burlington firm Allen, Brooks and Minor. He noted that two very large properties are empty: a former Hannaford’s in Burlington, and the former Sears store in South Burlington. If those two properties were excluded, he said, the retail vacancy rate would be about 7.1 percent.
That rate shows that some businesses have been able to adapt better to pandemic-related restrictions than others.
“In some ways it’s healthy; it’s not as bad as some might have imagined it would be,” Minor said. “E-commerce is a challenge, and how to operate in the post-pandemic retail world is a challenge. Some businesses have been really successful in figuring out what do people want now that we’re living life differently.”
The pandemic’s full impact on business has not been fully determined. While it’s clear that thousands of jobs were lost, it’s less apparent how many businesses closed as a result of the pandemic-related shutdowns, safety measures and changes in consumer behavior. The Public Assets Institute in Montpelier released a report Friday that said Vermont suffered a net loss of just 75 businesses between March 2020 and March 2021.
The report, based on data from the Bureau of Labor Statistics, said that 2,400 businesses in Vermont closed during the pandemic. But nearly all of them reopened, probably thanks to billions of dollars in federal grants created to help businesses survive, the report said.
The survey that Minor uses for his real estate reports includes Williston, which provides a different shopping experience from that in downtown Burlington: one with plenty of parking and few of the policing challenges that downtown store owners have cited.
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“It does seem a little sketchier than it used to be,” said Anya Huneke, who owns Dirt Chic, a downtown consignment store. She said she’s noticed more people in the store who appear to be struggling. “I find myself being more aware of peoples’ intentions and activity in the store than I used to be,” she said. “I can feel there is less oversight.”
However, business is good at Dirt Chic, said Huneke; she has plenty of customers and more clothing consignments than she can use. She said the biggest obstacle to her business now is a lack of qualified staff, and she thinks that’s holding back other businesses, too.
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Although businesses have been allowed to reopen fully, COVID-19 is still playing a big role in consumers’ decisions. The state’s infection rate is as high as it’s ever been, and although vaccinations have made many people feel safer, Huneke said, some of her customers tell her they’re still leery of entering stores.
“We still have people who will come in and say, ‘This is my first time being back in a store,’” she said. “Or we have people who will drop off a consignment and say they’re going to wait outside.”
Blake is optimistic that Burlington will continue to attract local or regional businesses, and surrounding towns will draw chain stores and restaurants. He said downtown Burlington doesn’t usually have any retail vacancies at this time of year, but this fall it has a few.
But “it’s certainly a lot better than it was 12 months ago,” he said.