Big chains like walmart And Starbucksrecently closed stores in major US cities, raising concerns about the future retail in some of the most important centers and business areas of the country.

There are many reasons for this: an abundance of stores, people working from home, online shopping, exorbitant rents, public safety concerns and an increase in crime, and difficulties in recruiting workers.

San Francisco, Los Angeles, San Diego, New York, Seattle, Miami, and Chicago lost retail stores from early 2017 to late 2021, according to a study by the JPMorgan Chase Institute. From 1995 to 2021, more stores closed than opened, according to Morgan Stanley. The trend has been dubbed the “Retail Apocalypse”. Walmart has closed about 40 stores since 2021 and will close 20 more this year, while Nordstrom will close 15. In 2021, CVS also announced that it will close 900 stores over three years.

At the same time, the rise of telecommuting has taken a toll on the city’s shopping districts, which were designed to cater to office workers who commute to work on a daily basis.

According to a study by Stanford University economist Nicholas Bloom, the typical office worker now spends $2,000-$4,600 less a year in urban areas. Spending is now being shifted to the suburbs, he said, as a million people have left city centers during the pandemic. So retailers have followed this shift. They left more expensive cities like San Francisco and New York for cheaper ones like Phoenix and Houston, according to the JPMorgan Chase Institute.

According to the think tank’s research, San Francisco lost about 6% of its retail stores from 2019 to 2021, while Los Angeles lost about 4% and New York lost 3%. Meanwhile, Houston and Phoenix received 4% of new retail stores during this period.

From 1995 to 2021, more stores closed than opened each year, a trend known as the “Retail Apocalypse.”

Retail stores are also under pressure due to the ongoing transition to online shopping.

E-commerce accounted for 14.7% of all retail sales in the last quarter of 2022, and it is clear that the pandemic has accelerated this growth. For example, the closure of chain stores in New York is associated with products that are most often bought online. Clothing, footwear, accessories, vitamins and electronics stores closed faster, said Jonathan Bowles, executive director of the Center for Urban Futures, a public policy think tank.

In order to reinvent retail in the city center, dramatic changes are needed.

That means denser neighborhoods with a wider array of affordable housing, experiential retail, restaurants, entertainment, parks and other amenities that won’t come overnight.

“Once these cities become real city blocks, you will find that retail will start to come back in different forms and forms,” explained Terry Shook, co-founder of consulting firm Shook Kelly.

How policymakers redesign their downtowns – with retail as a critical attraction – will be critical to the financial health of cities and regional economies.