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Birmingham Retail a Solid Bet Before COVID-19 Outbreak, and it Will Bounce Back

Birmingham’s Lee Branch is regional draw for shoppers. The Dick’s Sporting Goods-anchored center features a new Golf Galaxy store, the concept’s first in Alabama.

Published April 6, 2020

What a time to write an article on the state of the retail real estate market in Birmingham. A few short weeks ago this would have been a much easier task.

The fundamentals of the Birmingham retail market are healthy and exciting despite the current health crisis and the fact that we have experienced very little population growth. I travel across the country regularly, and there is a national undercurrent about Birmingham that is exciting. Birmingham is spoken about nationally as a city with great food and quality of life, which are the types of things always said about a city prior to it hitting a tipping point.

We expect that consumer behavior is going to be different coming out of the pandemic, and that the way retail and restaurant businesses operate will continue to adapt to that consumer behavior.


Traditional developments

Traditional shopping centers continue to be strong regional draws, with tenant mixes focusing on local and national brands. Lee Branch is one of the most successful in Birmingham. The Dick’s Sporting Goods and Golf Galaxy side-by-side concept opened in February at Lee Branch and is the first of its kind in the state.

Discount retail, although not new, will continue to fill a lot of the big box vacancies. Crazy Cazboys, a new Alabama-based closeout concept, is an excellent example of this. The company recently opened its first location and has several others in the pipeline.

Grocery-anchored development remains strong with Publix leading the charge with new stores on U.S. Highway 280 and Lakeshore Parkway, with an additional location set to open in Liberty Park. The grocer’s acquisition of Western Supermarkets has allowed the company to penetrate landlocked areas of the market.

There has been a pretty substantial decline in the organic grocer presence with Whole Foods Market closing its Hoover store and Sprouts Farmers Market closing its Vestavia location. Additionally, The Fresh Market in Trussville that was announced, but never opened, is now an Aldi.

To elaborate on the Whole Foods closing, I believe it was simply a poor location for a second store in the market. The intersection of Highways 150 and 31 in Hoover is more of a destination than a convenience play for the immediate rooftops. Hoover is a solid market with strong density, but the demographics don’t fit Whole Foods relative to its target income and age profile.

Read the full Southeast Real Estate Business Online article

Robert Jolly, CCIM

Retail Specialis

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