Many retailers and restaurants are gone for good, and the recovery has bypassed some places. North Michigan Avenue, Chicago’s most famous shopping district, continues to struggle with a retail vacancy rate of 24.7%, down from 12% in 2018, according to Cushman & Wakefield. Retailers and restaurants in the Loop are still suffering as many of their main customers, downtown professionals, continue to work from home. And some major malls, including Chicago Ridge Mall and Lincolnwood Town Center, have run into lending issues.
Still, last year’s big jump in sales offers a message of hope for brick-and-mortar retailers and their owners: “Brick and mortar isn’t dead,” Melaniphy said.
A segment particularly vulnerable to e-commerce, apparel, made an impressive comeback in 2021. Chicago-area apparel sales grew 73.1% last year, more than any other category, to 5 .54 billion as more and more people updated their wardrobes in anticipation of their comeback. at the office and bought some new outfits for the holidays, Melaniphy said. But the long-term trend illustrates the impact of e-commerce: local clothing sales grew only 11.7% from 2007 to 2021, well below the 42.8% increase for all categories. retail over the same period.
Sales rose 10.8% last year to $10.85 billion in another category threatened by online retail: general merchandise, which includes department stores. But the department store chains are losing the war. Many, including Macy’s, which closed its Water Tower Place store last year, are reducing their footprints, while others, like Carson’s, have gone out of business. Local sales data underscores their struggles: General merchandise sales fell 9.2% from 2007 to 2021, according to Melaniphy.
The Melaniphy report also sheds light on the zero-sum game between grocery stores and restaurants. In 2020, as more people ate at home, Chicago-area grocery store sales increased 6.4%. It was just one of two categories – the other was home improvement stores – with sales increasing in 2020. Restaurant and bar sales, meanwhile, fell 30.8%.
The pendulum swung back in 2021. As more people went out to eat and drink, restaurant and bar sales increased 31.6% to $17.80 billion; grocery sales fell 0.4% to $17.94 billion, according to Melaniphy. It was the only category of 10 in the report with a drop last year.
Melaniphy expects auto and gas sales to surge this year, largely due to soaring gas prices. An average gallon of gasoline costs $4.49 in the United States today, up 37% from $3.28 at the start of the year, according to the US Energy Information Administration. Even though motorists are buying less gasoline, sales are expected to increase due to higher prices.
Retailers and their owners weren’t the only ones rejoicing at the increase in sales last year. The big jump boosted sales tax collections for state and local governments, helping them balance budgets that seemed precarious a year earlier. Sales rose 38.3% in the city of Chicago, 31% in Naperville and 33.8% in Schaumburg, according to the report.
“That was really good news for city governments,” Melaniphy said.