At the end of 2009, I wrote a blog post called “Commercial Construction Trends to Watch in 2010.” With four months under our belt, I think the time is right to revisit one of the trends I mentioned called “Back on Track” and its relevance to the retail construction industry.

In the post I said we should “Look for a solid increase in construction renovations versus new locations, which should hold especially true with new retail construction.” Think I’ll give myself a “B” on that one.

Just look at all the retail renovation projects underway – Disney is remodeling all of its stores, Target is introducing new retail store concepts that incorporate a larger grocery area, and
JCPenny is partnering with Mango for a store-within-a-store concept by installing MNG by Mango “stores” at JCPenny locations across the country.

The same holds true for shopping center development. As I mentioned in my last blog, it wouldn’t surprise me to see shopping center developers and mall landlords take advantage of market conditions and turn a struggling enclosed shopping mall into a successful open-air shopping center for a fraction of what it would cost to take on a new shopping center construction project.

As for new retail construction, it seems the big winners are niche retail brands that dominate a market category, such as American Girl and lululemon. The retail construction work is there because the public is positively responding to the unique shopping environment of these stores, which in turn leads to the brands opening more stores. In fact, you can click here to read about the new retail construction stores we recently completed for these two niche brands.

National retail construction contractors are also seeing niche retail brands feed off each other like the new Little Miss Match store and the American Girl Place store in Water Tower Place shopping center in Chicago, both projects we worked on. Talk about a smart move. Little Miss Match is now in the same shopping mall as the largest American Girl Place store in the country. Girls will never want to leave the building.

Where retail construction seems to fall short is for the average retail brand. Despite an increase in overall retail sales this year, new commercial construction has been shelved for a lot of stores that don’t stand out either for their low price point or customer experience.

Still, things are getting “back on track” for commercial construction contractors compared to last year. Phones are ringing, there are retail construction projects to bid on and commercial construction permits to pull. Looks like brighter days are ahead.

How do you think retail construction is performing so far this year? I’d love to hear your comments at bill.disanto@englewoodconstruction.com.

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