The urban Target store opening in downtown Seattle marks an important future direction for the chain. While suburban big boxes and shopping strips were devastated by the Great Recession, many central cores have been doing well. It’s also a vote of confidence in downtown Seattle.
There are risks to the scenario, as economists like to say. Population has grown as a percentage more downtown since 2005 than in Seattle, King County or Washington. Amazon.com’s headquarters, the Bill and Melinda Gates Foundation, Russell Investments and the South Lake Union biomedical cluster have all added to the confidence. Still, employment was badly hurt by the closing of Washington Mutual’s headquarters and the destruction of the ecosystem of vendors, law firms, CPAs, etc. that depended on it.
Taxable retail sales downtown plunged during the recession and failed to recover as they did elsewhere in the metro area and state, starting in 2009. Taxable sales in arts, entertainment, sports and accommodations also took a big hit and are losing market share (NBA arena, anyone?). The data are completely not up to date, but it’s clear downtown has challenges.
Don’t get me wrong. Target’s move shows studied conviction that Seattle’s core is strong and I think downtown will regain its pre-recession momentum all around. But the “substitution effect” may hurt established retailers downtown, including Ross, Bed Bath and Beyond, and even Macy’s, along with the Kress IGA grocery. That would not be good. So it’s critical that downtown keep growing population and market share. The Target might help that, too, with the clustering effect bringing more customers downtown to shop, aided by abundant transit. Meanwhile, the recession left plenty of empty store fronts — those small businesses need attention, too.
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Today’s Econ Haiku:
It didn’t fade out
The crisis just moves slo-mo