Gains in the number of retail chains across New York City are lagging significantly behind increases seen last year and even further behind pre-pandemic levels, according to a new report out Wednesday.
The annual report from the Center for an Urban Future, a New York-based public policy think tank, shows signs of a stagnating recovery among the city’s chain retailers, which saw a nearly 3% increase in stores last year. In 2022, that number was well under a percentage point — 0.3%.
“New York City’s economy came back quite a bit in the past year, but New York City's national retail chains are still really in first gear,” said Jonathan Bowles, the group’s executive director. “There's a long way to go for us to get back to where retailers were prior to the pandemic.”
The number of chain stores across the five boroughs last month was roughly 10% less than in late 2019, according to the report. Fifty-seven percent of chain retailers included in the group’s 2019 report lost locations this year. All eight of the city’s largest chain retailers – including Dunkin’ Donuts, Metro PCS and Subway – have fewer locations now than three years ago.
The findings come as Mayor Eric Adams and Gov. Kathy Hochul have each made the city’s economic recovery from the pandemic cornerstones of their governmental priorities. Adams has repeatedly called on companies to end their work-from-home policies, arguing that remote work is “draining” the city’s economy.
But as more than half of office workers remain home on an average weekday, the report found Manhattan’s chain losses were “significantly greater” than any other borough, with 14% fewer chains spread across the island than pre-pandemic.
While low office occupancy levels in Midtown may be one driver of the sluggish recovery for chain retail, Bowles pointed to the continued explosion of online shopping as another reason for disappearing stores.
“Many of the chains that are declining are those that sell clothing, shoes and accessories — things where there's direct competition with e-commerce,” he said. “People that used to buy soap and toothpaste and shampoo at the corner pharmacy are now buying it online.”
Indeed, Duane Reade contracted more than any other retailer, shedding 22 stores in the last year, continuing a trend that has seen the retailer close 28% of its storefronts since the start of the pandemic, according to the report.
By contrast, food retailers have fared much better, with chains such as Chipotle Mexican Grill and Wingstop adding stores.
Dunkin’ Donuts remains New York City’s most ubiquitous chain by a wide margin, beating out the second-place Starbucks by more than 300 stores. Both coffee conglomerates added a handful of locations this year, but remain below their pre-pandemic totals.
While some New Yorkers may have limited sympathy for the plight of big chains, their struggles can have a real impact on the city’s employment. While retail jobs are up nationally 2% from before the pandemic, they are down more than 10% – the equivalent of 34,000 jobs – in New York City, according to Bowles.
Perhaps more significantly, the foreboding trends for major chains can be seen as a warning about New York City’s broader retail comeback, and its ability to solve the difficult problem of vacant storefronts.
“There’s a real concern about street life,” Bowles said. “Our retail presence has a big impact on the vibrancy of this city.”