One of the primary reasons why New York City’s economy survived the recession as well as it did is because the retail industry steadily added jobs from 2007 through this year. A number of new developments[1] opened during this period. These large scale shopping centers had started construction in 2006 and 2007, before the recession hit. When they opened, most of them were successful despite the downturn in the economy. Why? First of all, tourism in the City soared during those years. Secondly, and more significantly, the outer boroughs had been severely under-retailed, and zoning authorities and developers were finally waking up to this fact.
The table below shows the results from the 2007 economic census2 that illustrate how the retail sales per capita ratios for the outer boroughs were far below the national average.
Either developers are not doing adequate research or there is something wrong in the City’s building code. Indeed, numerous local officials have long claimed that the City needs more big-box retail and that many New Yorkers travel outside the City to do bulk shopping. A number of zoning changes were instituted over the last 10 years to allow developers to build bigger stores and recent employment gains suggest that this imbalance has adjusted somewhat. A look at employment growth in retail trade shows that the job gains from 2007 to 2011 were concentrated in the outer boroughs.
Source: Eastern Consolidated, NYS Department of Labor and US Bureau of Labor Statistics
While employment gains of 4% to 11% since 2007 are healthy, they probably do not represent significant gains in retail sales per capita. In the next blog, we will look at median family income to see how dense the income in the outer boroughs is and how, again, retailers are not taking advantage of New York City’s under-served demographics.
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