Service and Experiential Retail Rise to Top in Bay Area

The retail industry in the Bay Area has seen gains in every sector, with service and experience businesses showing particular strength, according to annual data collected by brokerage Colliers.

Gyms in the region saw an average foot traffic of 280,000 visitors in 2022, up 47 percent year-over-year. Car washes also were popular with 107,000 average visitors, up 23 percent from the year prior. Restaurants posted big gains averaging 274,000, an increase of 30 percent. However, the trailing 12-month foot traffic for dining has trailed off recently with 276,000 visitors from July 2022 to June 2023, just a 10 percent increase compared to the previous 12 months.

“Everyone was spending on goods more during the pandemic, and now people are really itching to go to those service-oriented places,” Nicole Larson from Colliers said. “They’re going to those places that are quick and really accessible; quick service is seeing a lot of foot traffic.”

Grocery stores saw the most visitors of any retail sector, with 1.2 million shoppers in 2022, a 15 percent increase from 2021.

Some of the largest shopping mall operators bounced back in 2022 with Westfield malls seeing 11.3 million visitors, a 32 percent increase from the previous year. Simon malls saw a 23 percent increase to 8.4 million average visitors, and Macerich malls saw a 14 percent increase to 5.3 million average visitors. However, all of these malls experienced a slowdown in the trailing 12 months.

Colliers’ data goes along with recently collected JLL data that show that entertainment and dining are some of San Francisco’s strong points. In a recent deal, Funlab purchased Urban Putt in the Mission District to open an 18-hole Holey Moley course.

“It may not be the same retail experience you had as a child or even 10 years ago, but that is the consistent thread with this dynamic industry of creatives,” Laura Tinetti from JLL said. “Entertainment, competitive gaming and food and beverage is the next wave we’re just starting to ride.”