New development brings more retail to Indiana Northwest, including more upscale stores | Economic Headlines from Northwest Indiana

Northwest Indiana continued to attract new retail businesses in 2021, even as e-commerce transformed the sector.

The region’s retail sector has grown in importance. Northwest Indiana has long been home to the second largest gated mall in Indiana, behind only Castleton Square Mall in Indianapolis, and has evolved into a retail center that attracts shoppers from across the state line.

“The strategic location in Northwest Indiana and proximity to Chicago was a key reason for the strong retail trend,” said Brett McDermott of Crown Point-based Latitude Commercial, one of the leading commercial real estate companies in the Chicago suburban area and have slowly begun to to set up their base here. It took Whole Foods years to decide to open a store here and now, along with numerous retailers and restaurants, it’s a very successful store for them.”

Northwest Indiana remains a shopping destination for residents of the southern suburbs and Chicago, particularly those living near the state line. South Side Chicagoans often flock to the Super Walmart and other stores in North Hammond’s Marina District. It continues to attract new businesses like Starbucks, Taco Bell, Popeye’s, Capriotti’s, and the Midwest Express Clinic.

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“Indiana’s low tax rate compared to Chicago has also been a major contributor to retail growth and will continue to be a major contributor,” said McDermott. “Owners and nationals see they own property and can pay a quarter of the taxes they pay compared to Cook County. With tight margins today due to the cost of goods and higher wages, this will continue to be an important factor in attracting business to the region.”

The area’s retail sector is relevant because of “proximity to Chicago, residential growth and distances between regional shopping districts such as Chicago, Oakbrook, South Bend and Lafayette,” said David Lasser of Merrillville-based Commercial In-Sites, a leading commercial real estate firm in the Northwest Indiana.

The centrally located region has many logistical advantages, said Micah Pollak, an associate professor at Indiana University Northwest.

“One of the greatest assets that the Indiana Northwest has, and one of the main reasons it’s relevant to Indiana and the greater Midwest region, is its location,” he said. “The region is less than an hour from Chicago and has access to four major freeways, three international airports, three Class 1 rail lines and an international port. Because of its location, Northwest Indiana will always play an important role in retail through transportation and logistics. Lake County is also the second most populous county in the state and is not only a major logistics hub, but also one of the state’s larger retail markets.”

Retail sales are thriving in Northwest Indiana, particularly along US 30 and US 41 and in St. John, Valparaiso, Chesterton and Munster’s Centennial Village, Lasser said. Railers are benefiting from residential growth, which should be fueled more by the South Shore Line expansion projects.

The Northwest Indiana retail industry is also benefiting from “outstanding marketing campaigns by the Northwest Indiana Forum, the South Shore Convention and Visitors Authority, the Indiana State IEDC, NIPSCO, NIRPC, the Lake County Indiana Economic Alliance and others,” Lasser said.

But the retail industry has changed in Northwest Indiana and across the country. Trends include more convenience, more access, more locations, shorter wait times with multiple drive-thru lanes and home delivery, Lasser said.

Long-standing business practices are evolving in the digital age.

“The first challenge is that retail companies need to continue refining their business models to address both longer-term uncertainties and shifts in consumer shopping behavior,” Pollak said. “Should there be another significant wave of falls or a new variant, companies must be prepared to change the way they operate to stay open. The pandemic has also changed consumer buying habits and there are now much stronger preferences for online shopping options. While we’re likely to see an increase in personal retail shopping this year, it’s unlikely to return to pre-pandemic levels.”

The COVID-19 pandemic will have a lasting impact on the retail industry in Northwest Indiana, Pollak said.

“The job market has changed dramatically. As part of the ‘Great Reassessment’ of work, many workers are now less willing to work in customer-centric, personal service jobs, which describes much of the retail sector. In a tight labor market, retail companies need to find ways to make jobs more attractive to workers, and at a way that goes beyond simply offering higher wages,” he said. “The pandemic has turned the way consumers make and receive purchases on its head, with a growing demand for online ordering combined with a faster or Same-Day Delivery Many Northwest Indiana retail locations ranging from general merchandise to groceries are now offering a form of ordering online -day home delivery, something that was rare before the pandemic.Even though we As we continue to recover from the pandemic, this T trend is likely to continue and represents an exciting shift in retail.”

The evolution of the industry is changing the market and creating opportunities, including for workers, Pollak said.

“The expansion of online shopping with home delivery has created new job opportunities, from store selection to delivery,” he said. “These new jobs also align well with workers’ changing preferences for more flexible schedules and work environments that involve less face-to-face interactions with customers. While many consumers will continue to do their shopping in person, many others have embraced the convenience and time savings of ordering online with home delivery and are willing to pay for these new services.”

While Amazon and other online retailers have made many big-box stores obsolete, the spaces won’t necessarily remain vacant indefinitely.

“I think we’re going to see our big boxes being demolished or used for entertainment purposes like trampoline parks, amusement centers, etc. to fill up,” said Myles Rapchak of Latitude Commercial. “It is very important to keep our malls and shopping areas occupied so that all of the outlet restaurants and small retail spaces can also thrive. Any opportunity to fill these big positions and get people there is a must for the overall success of the surrounding businesses. It’s time to be creative.”

At a time when most department store chains are closing deals or going out of business altogether, a creative redesign of empty big box space is needed. KMart, once the country’s second-largest retailer, has shrunk to just four stores in the United States.

“The demise of large department stores and malls are trends that I think we’ll see for years to come,” Rapchak said more. That’s why we see the industrial market for the distribution of soft goods booming. As large boxes are phased out, this directly impacts malls as they have lost their anchor tenants, which is what we are currently seeing at Southlake Mall.”

However, the area continues to see investment in new businesses and restaurants, such as the booming Beacon Hill development at Crown Point.

“Centennial Village and Maple Leaf Crossing are both great developments in Munster. Centennial really offers a walkable feel due to the condos and hotel. There are a few more phases to this development that will bring even more high-end retailers to Northwest Indiana,” Rapchak said. “The Broadway Corridor at Crown Point has also seen massive development, particularly near the Summit (and Broadway) intersection. This has brought great new restaurants and retailers to Crown Point and I am very excited about the growth as a resident.”

And there is reason for optimism about further growth of the retail sector in the region in the future.

“There are a lot of new construction projects going on at the moment. With demand so high and inventory so low, we’ve seen more speculative development than ever before,” said Aaron McDermott, Latitude’s commercial president. “Much of this is due to residential real estate growth. Think of it this way: when you have more homes, you have greater demand for retail services and medical offices, to name a few. If you have larger retail and office needs, you have to deliver and service them, which in turn means more warehouses for distribution centers and construction-related companies.”

“Retailers now see the area as a suburb of Chicago and have slowly begun to establish their base here.”

Brett McDermott, Latitude Advertisement

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