Retail booms while labor shortage looms
It was a strong quarter of positive absorption highlighted by new construction and grand openings for many retailers eager to join a bustling market. Unemployment rates at national and regional levels are at record lows in this long stretch of economic growth. However, this growth may be showing signs of slowing as the labor market begins to tighten and rental rates plateau after a lengthy upward trend.
Grand Rapids is flourishing with eccentric restaurant concepts and acclaimed breweries that are beloved by locals and tourists alike. However, while these establishments continue to thrive and multiply, owners are facing the struggle of finding skilled labor. Record low unemployment rates are great for the economy but can create challenges for employers. The number of people actively seeking employment is shrinking, giving owners and operators fewer options for skilled candidates. This has been plaguing the industrial sector for some time and is now emerging as a topic of concern for retailers and the service industry throughout the nation.
Wages are now starting to climb as the labor market tightens and companies attempt to incentivize and retain workers. In turn, consumers are increasing their shopping habits, both at physical stores and online. Many retailers are offering more options for their online-shopping customer base while still attracting customers to their physical stores. Walmart, for example, offers customers discounts for picking up their purchases in-store rather than having orders delivered. These offers are structured to compete with online giant Amazon. A recent Supreme Court ruling passed in June orders online retailers to pay sales tax with the intent that it will level the playing field for both online retailers and businesses that have a physical presence.
Click here for the full 2018 Q3 Retail Market Report.