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The Fall of Retail Construction and the Rise of Warehouse Construction Part 1

All across America, retail giants are filing for bankruptcy and closing their doors. Malls now stand as abandoned monuments to the once prosperous physical retail industry. Taking their place are massive warehouses that facilitate growing online marketplaces. Construction firms that are prepared for this switch are sure to profit, provided that they can keep up with the incredible demand. 

In this two-part series, a Central FL construction lawyer at Cotney Construction Law will be discussing the fall of retail construction and the rise of warehouse construction. For all of your construction-related legal needs, including bid protests, contract drafting, and filing mechanic’s liens, partner with the team of Central FL contractor lawyers at Cotney Construction Law. 

As New Construction Rises, Retail Construction Falls 

Dodge Data & Analytics reports that retail construction fell a whopping 21 percent in 2018. This was the second year in a row that retail construction fell, having fallen five percent the previous year. This is in stark contrast to new construction as a whole, which showed gains from 2012 to 2018. 

Shifting Priorities and An Excess of Retail Space   

Online retailers can’t take all the blame; there are numerous factors that contributed to the fall of retail construction. The Great Recession left many shoppers wary of any unneeded spending, and millennials adapted by focusing less on materialism. And while rising wages mean that consumers have more money to spend on shopping, it also forces smaller retailers into bankruptcy who can’t afford to pay their workers a higher wage. 

In addition to the above economic shifts, the number of malls in America does not justify further construction. The advisory firm Cowen and Company reports there are 23.5 square feet of retail space per person in the U.S. That’s more retail space per person than the United Kingdom, Japan, the Netherlands, France, Switzerland, and China combined. Simply put, we built too much retail space.

An Opportunity for the Construction Industry 

While it might seem like the decline of retail construction would be a huge hit for the construction industry, that’s just not the case. As we’ll see in part two, warehouse construction for online retailers is poised to dominate the entire industry. Amazon alone didn’t kill the mom-and-pop store, but it definitely put the final nail in the coffin.

If you would like to speak with one of our Central FL contractor lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.