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Ciao friends – – my wife and I just returned from a fantastic trip to Italy. We visited Rome, Florence, Siena, Como, and Venice. Stepping out of SoCal’s Inland Empire for a couple of weeks was really enlightening and refreshing. While it’s still top of mind I wanted to share a few of my observations of Italy’s retail scene including a couple of concepts I feel would work well in our market:
Shop “Small” – We saw literally hundreds of shops during our travels and I would venture to say that at least half were under 500 SF. They were packed with merchandise and usually only one employee. These shopkeepers definitely have the whole “downsizing strategy” perfected. Maybe we need to think about building smaller shop spaces as a part of our retail projects.
Eataly Florence – We visited the Eataly store in Florence and the idea of combining a restaurant, retail, bakery, and cooking classes into one location (a lot more than 500 SF) seems like the future of retail. A store is planned to open in Century City and I would highly recommend checking it out when it opens. Applying this concept to other categories you can easily see grocery stores adding more in store dining, retailers adding restaurants, sporting goods retailers offering lessons and training, etc.
Virtually No Retail Vacancy – I barely saw a vacant retail space the entire trip. When I asked a few merchants about how they secured their storefront it was primarily a result of someone else selling their business. One restauranteur shared with me that in order to acquire a space, he bought someone’s business and then closed it so he could open his own restaurant. Also, due to a lack of population growth, there is almost no development. This combination of low vacancy, low velocity and minimal development means they would likely have very little need for our firm’s retail brokerage services.
Not One More Pizzeria – A “pizza restaurant” in Italy doesn’t mean it just sells pizza. They also sell pastas, and some meat & fish dishes, but they definitely sell pizza and they are virtually all the same. I never thought I would grow tired of pizza. It sure seems like the Italians could use a lot more variety than just pizza restaurants, especially for those that have inferior locations. Would have loved some Spanish, Greek, or Middle Eastern restaurants. I have never appreciated the variety of restaurants we have in the US more than I do now.
Mixed Use Expertise – Why do we have such a difficult time getting the concept of mixed use correct? The Italians have been doing it for centuries. In many cases we can’t seem to figure out how to handle trash, duct work, access, and similar items and yet somehow the Italians have figured it out with buildings that are 500+ years old. We really need to focus on getting out of our own way and making a mix of retail, residential, office and hotel uses work much better together especially in our most densely populated areas.
No Starbucks – at least for now – My name is Brad and I am an addict. I now realize that I am completely addicted to Starbucks green tea. There are no Starbucks in Italy and I quickly realized I really need my Starbucks fix, especially after walking 5 to 10 miles each day. That being said, my wife loved Italian coffee and I can tell that a coffee and espresso maker is definitely in our future. Starbucks has announced that they plan to open 300 Starbucks over the next 5 years in Italy. How this will work in a culture that does not drink coffee or tea while walking in the streets will be very interesting. I guess I will have to come back.
I admit that my observations may be skewed by the fact that I only experienced cities sought by tourists. However, if there is one idea that is evident when you travel through centuries old cities is that change happens. What we are currently experiencing in retail is by no means “the death of retail”, but just a time of change. Each of the cities we visited were thriving, but each had very different uses and purposes over the centuries. I am looking forward to our firm, Progressive Real Estate Partners, being a facilitator of this change in SoCal’s Inland Empire.