Pandemic Migration Strengthens Small Markets: Report – Trade Observer
Retailers who want to think big in 2022 should consider focusing on smaller markets than they typically envisioned in the past.
The sudden option of working from home has led to questions about where employees would live if commuting to an office was no longer a necessity. Analysis firm Placer.ai published a report this week, discussing how the pandemic may not have been as big of a catalyst for movement as expected, and how understanding these patterns can make a difference for new and existing retailers and business owners.
Placer.ai data compiles statistics such as household income, demographics, and age groups that come and go in different business areas, providing a critical lens for retailers and restaurateurs to uncover opportunities to reach key markets as soon as possible.
The company found that while some towns saw people moving away, many stayed nearby in neighboring towns, suburbs or nearby enclaves. For example, 10.3% of those who left Brooklyn last year moved to Queens and 8.7% moved to Manhattan. Others leaving Brooklyn moved to upstate New York, New Jersey or Connecticut.
RJ Hottovie, head of analytics research at Placer.ai, said there has been quite a significant movement from urban markets to suburban and even rural markets. He said nearly half of the top 25 markets by net growth over the past two years are smaller markets with fewer than 500,000 people.
“One of the themes we’ve started looking at is that smaller markets and markets that retailers would consider off-limits are perhaps more viable right now,” he said. “We’re starting to see a lot of retailers like Chipotle Where kohls Where PetCo start looking at the smaller markets. Markets with less than 200,000 people, less than 100,000, some as few as 50,000 people could be viable markets now. Part of that is migration. These are partly new formats that are adapting and developing.
As an example, Hottovy pointed to markets in places like Boise, Idaho, and other college and college towns like Athens, Georgia, or Gainesville, Florida, that have become viable targets.
In addition, the report highlighted recent migration trends that had taken place before the pandemic. Overall, areas that were already attracting new residents have continued to grow over the past two years, and those that were already losing residents have lost more.
Several states with large urban populations saw their populations shrink somewhat, with New York, Illinois and California all seeing gradual population declines of 1.1%, 2.2% and 1.1 %, respectively, since the first quarter of 2018. Meanwhile, Florida, Texas and Arizona have seen their populations grow by 2% to 4% since 2019.
Gregory Cornfield can be reached at [email protected].