Reference no: EM133300714

Topic: Audrey is the president of the Downtown Neighborhood Association, a volunteer position that supplements her fulltime position as a customer-care manager. The broad purpose or mission of the Association is help and sustain a vibrant downtown that welcomes businesses, customers, families, and tourists during day and evening hours. Audrey and the other Association members are increasingly troubled by a major problem facing downtown-too many empty stores facing the street front, usually referred to as the vacant storefront problem.

Working in conjunction with the City Council Small Business Committee, Audrey and the other Association members have observed that about 25 percent of the stores in the heart of downtown are vacant storefronts. On one block, five consecutive storefronts no longer have a tenant. The vacant storefronts represent a variety of former business establishments. Among them are restaurants, flower shops, hair salons, nail salons, barber shops, clothing stores including two national retailers, a pet store, a wine store, and a pawnbroker.

Audrey said to the other members of the Association, "I know it is popular to label vacant stores high-rent blight, but the problem is not so simple. Most of the landlords are charging just enough rent so they can make a reasonable return on their investments. The landlords and property owners are faced with ever-increasing taxes and energy costs. We cannot expect these people to lower rents below the break-even point."

Two of the restaurant owners became food-truck operators because they could no longer pay the rents demanded by the landlord. Cedrick, the owner and operator of a high-end clothing store, pointed to a vexing problem with empty storefronts: "Three stores on my street closed, and the foot traffic in my store dropped heavily. When people see empty storefronts, they think there is something wrong with the neighborhood. They then decide to stop shopping on our block, or in downtown all together."

Emma, the owner of a jewelry store that closed, said that online shopping did her in. "Instead of browsing in my shop, my former customers shopped for jewelry online." Audrey countered that after the pandemic was over, e-commerce accounted for only about 18 percent of all retail sales. "That still leaves 82 percent of shoppers visiting physical retail stores," said Audrey.

Under the leadership of Audrey, the members of the Downtown Neighborhood Association held two brainstorming sessions to sketch out a few tentative solutions to the empty storefront problem. A few merchants who were not members of the Association also participated in the sessions. Here are a few of their tentative solutions to the problems:

- Rent an empty window to someone who might want to use it to advertise their own store or promote a cause.

- Find a pop-up tenant. Set up a temporary store, such as during the Holiday season, a blood drive, or a flu vaccination drive.

- Decorate the window to make it an attractive feature of downtown, rather an eyesore. The possibilities would include displaying high-school arts and crafts, or a non-political mural.

- Fine landlords for having an empty storefront. In this way, they will be motivated to find a new tenant or lower the rent to hold on to an existing tenant.

Audrey thanked the group for having made a good start but that more work has to be done to resolve the problem of the large number of empty storefronts in downtown.

Question 1: Explain if the Downtown Neighborhood Association has yet found a workable solution to the problem of too many empty storefronts in downtown.

Question 2: What else might Audrey do in her leadership role to resolve the problem of empty storefronts?

Question 3: What is your opinion of the impact of online shopping on retail store vacancy rates?