San Francisco suffers mass retail exodus: half the stores in the downtown hub have shut down

San Francisco's once vibrant retail sector has been hollowed out by accelerating store and restaurant closures, with brands such as Whole Foods, Old Navy, and Nordstrom shuttering their doors. Half of the city's downtown district stores have closed since 2019, and the downtown Westfield Mall has halted payments on a $558 million loan and given up ownership.

Increases in the murder and robbery rate, coupled with an increase in homelessness and drug use near stores, have played a part in businesses' decisions to relocate.

As reported in ABC News:

Overall, crime statistics suggest mixed results. As of Sunday, the most recent data available, homicides have climbed nearly 8% this year compared to the same period in 2022; and robberies have risen about 12%, San Francisco Police Department data showed. Rapes have fallen almost 24% compared to the same period last year, however, while assaults have dropped nearly 5%, according to the data.

The retail exodus is attributed to other various intertwined factors as well, including changes in consumer behavior, the rise of remote work, a diminished sense of safety among shoppers, and the COVID-19 pandemic, which have driven a shift away from brick-and-mortar retail, resulting in reduced foot traffic.

There are some signs of recovery on the horizon. Again, from ABC News:

Despite high-profile retail departures, the performance of in-person sales has shown signs of improvement this year, Ted Egan, San Francisco's chief economist, told ABC News.

Over the first three months of the year, sales tax revenue in San Francisco grew faster than it did statewide in most categories, Egan said. Casual dining receipts in San Francisco were up 23% on a non-inflation adjusted basis over that period compared to 10% statewide, he added; and the city has seen solid growth this year in some types of retail, such as electronics and appliances.

Sales at the downtown shopping neighborhood Union Square were up 7.4% on a non-inflation adjusted basis over the first three months of the year compared to the same period in 2022, he added.