Downtown shoppers and diners are back – almost to pre-pandemic levels

Shoppers and diners have returned to downtown, in numbers almost comparable to levels seen before the pandemic.

According a report published this week by the Center City District/Central Philadelphia Development Corp.

More importantly, consumers open their wallets and spend once they arrive downtown.

In the first quarter of 2022, retail sales in the central Center City limits – Vine Street to South Street, Delaware River to Schuylkill – reached 94% of 2019 levels, and restaurant sales reached 74% of levels of 2019.

According to Downtown District Chairman Paul Levy, “the challenge is for businesses to bring workers back to the office,” noting that only 52% of office workers in the downtown core have returned.

According to a recent report by Pew Charitable Trusts, the latest in a series on Philadelphia’s fiscal future, published in partnership with the William Penn Foundation.

However, the increase in downtown foot traffic has been aided by the return of out-of-town shoppers, tourists and convention attendees, more than 100,000 students and just over half of the 146,000 downtown office workers. The city center saw an average of 346,833 pedestrians per day in mid-June, or 84% of pre-pandemic levels. That’s the best downtown pedestrian count since 2019, Levy said.

“The diverse downtown mix supported the constant presence of pedestrians on the sidewalks, day and night,” Levy said. The Center City District is funded by local businesses in downtown Philadelphia.

Outside the Center City limits, however, merchants are still struggling to recover.

Many cannot hire enough workers to keep stores open all day. Other business owners close early for fear of theft or other crimes.

Brick-and-mortar stores in Philly neighborhoods are still closing due to staffing and crime, said Regina Hairston, president of the African American Chamber of Commerce for Pennsylvania, New Jersey and Delaware.

“Anecdotally, our members are still recovering,” Hairston said. “Recently, I met people in three different places, and none of them were open. Everything closes at 6 p.m.”

Pam Thornton, owner of Pound Cake Heaven, a bakery and cake decorating business, has reduced its business from three sites to two, one in Kensington and one in Yeadon. Its West Philly location on 53rd Street, now closed, “needs a renovation, but we don’t have the funds at this time. Often it feels like we are almost back to normal. But it gets tough when employees leave because they make more money elsewhere,” said Thornton, who has been in business for 10 years.

In Philadelphia, dollar and discount stores, including Dollar General and five beloware seeing significant gains in foot traffic, with weekly visits up year-round from the equivalent week in 2019, according to Placer.ai, which measures cellphone data tracking where consumers shop.

Big-box stores are also seeing renewed interest from consumers. After a 50% drop in new superstore openings in 2020, the superstore market rebounded with 23 new store openings in 2021, an increase of 91% compared to the previous year, according to CBRE’s latest report on the Philadelphia market.

In the second half of 2021, the grocery sector accounted for half of all big box openings in the Philadelphia area, from tenants such as Wegmans and Giant, which is opening another location at Broad and Spring Garden streets.

Additionally, Turn7, a new Philadelphia-based discount retailer, opened two locations in 2021 in former mall anchor spaces and announced plans to open at least three more.

Outdoor restaurant seating remains one of the enduring bright spots of the pandemic, Levy said.

“It’s a nice surprise. Sitting outside remains so popular,” he said. In 2019, there were 3,501 outdoor dining seats in the neighborhood; today there are 5,053 outdoor seats.

A financier life buoy for many restaurant owners who were unable to serve diners indoors during the peak of COVID-19, outdoor restaurants have struggled with the new rules and fees that the pandemic has subsided. Over the past few months, the city council has said it will relax regulations for “streeteries” with full Advice Support.