Northwest Indiana continued to attract new retail businesses in 2021, even as the sector was reshaped by e-commerce.
The region’s retail sector has grown in importance. Long home to Indiana’s second-largest enclosed mall after Castleton Square Mall in Indianapolis, northwest Indiana has become a retail hub that draws shoppers from across the State.
“Northwest Indiana’s strategic location and proximity to Chicago has been a major reason for the strong retail trend,” said Brett McDermott of Latitude Commercial, one of the leading companies area commercial real estate, based in Crown Point. “Retailers now see the area as a suburb of Chicago and have slowly begun to plant their base here. It took Whole Foods years to finally commit to opening a store here and now, it’s been a very successful store for them, along with many retailers and restaurants.
Northwest Indiana remains a shopping destination for residents of the southern suburbs and Chicago, especially those who live near the state line. Residents of South Side Chicago often flock to Super Walmart and other stores in the Marina District in North Hammond. It continued to attract new businesses like Starbucks, Taco Bell, Popeye’s, Capriotti’s and Midwest Express Clinic.
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“Indiana’s low tax rate relative to Chicago has also been a key factor and will continue to play a significant role in retail growth,” McDermott said. “Owner-users, as well as nationals, are finding that they can own property and pay a quarter of the amount of taxes they pay compared to Cook County. With profit margins tight these days due to the cost of goods and higher wages continue to be an important aspect of attracting business to the region.
The area’s retail sector is relevant due to “proximity to Chicago, residential growth, distances between regional commercial areas such as Chicago, Oakbrook, South Bend and Lafayette,” said David Lasser of Commercial Merrillville-based In-Sites, a leader in commercial real estate. business in northwest Indiana.
Being centrally located, the region has many logistical advantages, said Micah Pollak, an associate professor at Indiana University Northwest.
“One of Northwest Indiana’s greatest advantages, and one of the main reasons it’s relevant to Indiana and the greater Midwest region, is its location,” he said. declared. “The area is less than an hour from Chicago with access to four major highways, three international airports, three Class 1 railroads, and an international port. Due to its location, Northwest Indiana will always play an important role in retail through transportation and logistics.Lake County is also the second most populous county in the state and, in addition to being an important logistics center, it is the one of the largest retail markets in the state.
Retail in northwest Indiana has flourished, especially along US 30 and US 41, as well as in St. John, Valparaiso, Chesterton and Munster’s Centennial Village, Lasser said. The railways are benefiting from residential growth, which should be further fueled by expansion projects on the South Shore line.
The Northwest Indiana retail industry also benefits from “excellent marketing campaigns through the Northwest Indiana Forum, the South Shore Convention and Visitors Authority, the Indiana State IEDC, NIPSCO, NIRPC, Lake County Indiana Economic Alliance and others,” Lasser said.
But the retail industry has changed in Northwest Indiana and across the country. Trends include more convenience, more access, more locations, shorter wait times through multiple lanes of transit, and door-to-door delivery, Lasser said.
Long-standing business practices are changing in the digital age.
“The first challenge is that retail companies must continue to refine their business models to deal with both longer-term uncertainty and changes in how consumers shop,” Pollak said. “If there were to be another large wave of cases or a new variant, companies must be prepared to change the way they operate to stay open. The pandemic has also changed consumer shopping habits and there are now much stronger preferences for online shopping options. While we’ll likely see an increase in in-person retail shopping over the course of this year, it’s unlikely to return to pre-pandemic levels.”
The COVID-19 pandemic will have a lasting impact on the retail industry in northwest Indiana, Pollak said.
“The job market has undergone a sea change. As part of the ‘great revaluation’ of work, many workers are now less willing to work in in-person customer-facing service jobs, which describes a big part of the retail sector. With the tight labor market, retail companies need to find ways to make jobs more attractive to workers by going beyond simply offering higher wages,” he said. “The pandemic has upended the way consumers make and receive purchases, with growing demand for online ordering combined with faster or same-day delivery. Many retail stores in northwest Indiana, ranging from general merchandise to groceries, are now offering some form of online ordering with the same same-day home delivery, something that was uncommon before the pandemic. Even as we continue to emerge from the pandemic, it is likely that this trend will continue and represent an exciting shift in retail.
The changing industry is reshaping the market and creating opportunities, including for workers, Pollak said.
“The expansion of online shopping with home delivery has led to the creation of new employment opportunities, from store pickers to delivery,” he said. “These new jobs also align well with workers’ changing preferences for more flexible hours and work environments that involve fewer face-to-face interactions with customers. While many consumers will continue to shop in person, many others have embraced the convenience and time saving of online ordering with home delivery and are willing to pay for these new services.”
While Amazon and other online retailers have made many big-box stores obsolete, the space won’t necessarily sit vacant for an indefinite period.
“I think we’ll see our big boxes being abandoned or used for entertainment purposes such as trampoline parks, entertainment centers, etc. to fill them up,” said Myles Rapchak of Latitude Commercial. “It’s very important to keep our mall and shopping areas busy so that all the factory restaurants and small businesses can also thrive. Any way to fill these large vacancies and get people there is critical to the overall success of the surrounding businesses. It’s time to be creative.”
A creative reimagining of vacant big box space will be needed at a time when most department store chains are shrinking or going out of business altogether. KMart, once the nation’s second-largest retailer, now has just four stores in the United States.
“The disappearance of big box stores and malls are trends that I think we will continue to see in the years to come,” Rapchak said. “With so many consumers shopping online, the need for more than 30,000 square feet just isn’t there anymore. That’s why we’re seeing the industrial market explode for consumer goods distribution. With the phasing out of big box stores, this directly affects malls as they have lost their anchor tenants that we currently see at Southlake Mall.
But the area continues to see investment in new stores and restaurants, such as the booming Beacon Hill development in Crown Point.
“Centennial Village and Maple Leaf Crossing are both excellent developments in Munster. Centennial really has a walking feel due to the condominiums and the hotel. There are a few more steps to this development that will bring even more high-end retailers to Northwest Indiana,” Rapchak said. “The Broadway Corridor at Crown Point has also seen massive development, especially near from the Summit (and Broadway) intersection. It has brought great new restaurants and retailers to Crown Point and I for one am very excited about the growth, being a resident there.
And there is reason to be optimistic that the region’s retail sector will continue to grow in the future.
“There are a lot of new construction projects going on right now. Because demand is so high and inventory is so low, we’ve seen more speculative development builds than ever before,” said Latitude Commercial President Aaron McDermott. residential in progress. Think of it this way: when you have more homes, you have more demand for retail services and demand for medical practices, to name a few. When you have greater retail and office demand, you need to supply and maintain them, which in turn brings more warehouses to distribution centers and construction-related businesses.
“Retailers now see the area as a suburb of Chicago and have slowly begun to establish their base here.”
Brett McDermott, Commercial Latitude