Retailers rethink pandemic-battered Manhattan

In the heart of Manhattan’s apparel district, the once-busy Starbucks sits empty at a corner of Eighth Avenue and 39th Street. Just down the block, a Dos Toros Taqueria that opened three years ago is now closed. And Wok To Walk, which once served steaming containers of noodles with chicken and vegetables to the lunch crowd, has also been shuttered.

While the delta version of coronavirus has arrived again delayed Planned by several companies to bring employees back to offices en masse, deceitful workers in Midtown are finding that many of their favorite hunts for a quick cup of coffee and muffins in the morning or sandwiches or salads at lunchtime are missing. went. Many of those that are open are operating with reduced hours or limited menus.

With the pandemic keeping millions of New York City office workers at home for the past year, restaurants, coffee shops, apparel retailers and others struggled to stay afloat.

By the end of 2020, the number of chain stores in Manhattan — from drugstores to clothing retailers to restaurants — had fallen more than 17 percent from 2019, according to Center for the Urban Future, a non-profit research and policy organization.

Across Manhattan, the number of available ground floor stores, usually the domain of busy restaurants and clothing stores, has increased. According to a report by real estate firm Cushman & Wakefield, a quarter of ground-floor storefronts in Lower Manhattan are available for rent, while nearly a third are available in Herald Square.

Starbucks has permanently closed 44 outlets in Manhattan since March last year. Pret A Manger has reopened only half of the 60 locations in New York City before the pandemic. Many gourmet cuisine, independent restaurants and small local chains have gone dark.

“Midtown has clearly been the hardest hit of any area in Manhattan,” said Jeffrey Rosman, a veteran retail real estate broker from Newmark. “If you think about other office-focused areas, whether downtown or Flatiron or Hudson Yards, there’s a lot of residential around those areas that helps sustain those markets. Midtown, for the most part, One trick pony.

“It is mostly offices and hotels, which have also been affected by the slowdown in tourism.”

However, the turmoil has reached far beyond the city. Last week, luxury furniture retailer ABC Carpet & Home — whose flagship store has been a fixture of the Union Square area — filed for bankruptcy protection, partly due to the “mass exodus of current and potential customers leaving the city”.

But in a city where one person’s recession is an opportunity for someone else, some restaurant chains are taking advantage of record-low retail fares to set up shop or expand their presence.

In the second quarter, food and beverage companies signed 23 new leases in Manhattan, according to commercial real estate services firm CBRE, with major apparel retailers who signed 10.

Shake Shake and popeyeLouisiana Kitchens was among the first to sign new rental agreements this year. So was burger chain Sonic, which signed a lease for its first Manhattan outpost, replacing the Pax Holsome Foods location in Midtown. Philippines-based chicken joint Jollibee, which enjoys a committed following, is planning to open a massive Flagship Restaurant in Times Square.

Still, with so much uncertainty about when employees can fully return to midtown offices, some companies are proceeding with caution. Coffee shop Bluestone Lane had plans to expand aggressively in Manhattan before the pandemic and is still considering locations in Midtown. But now it has turned its attention to opening up in more residential neighborhoods like Battery Park City, Hudson Yards and Tribeca.

Nick Stone, founder and CEO of Bluestone Lane, “We deliberately selected urban residential areas for our new cafe, so we are not dependent on our locals returning to physical office space, and hybrid work bodes well for the future. Well positioned.” said in an emailed statement.

And some chain restaurants that have already reopened in Midtown are tweaking their strategies to reflect the changing needs of customers in a post-Covid world.

On a recent weekday, a handful of customers were eating salads and sandwiches at Le Pen Cotidien’s Bryant Park location. The long, communal tables that once dominated the front of the restaurant are now gone, while the refrigerated cases for a selection of grab-and-go drinks, salads and sandwiches will be expanded as part of the remodeling next year. A new app for preordering and taking food became available in May.

While new technologies work for some customers, others have long worked for the past.

“We used QR codes for guests to view the menu as we tried to limit exposure to surfaces, but most of our guests want to have an actual menu,” said Stephen Smittle, senior vice president of operations for Le Pen Cotidien. Huh.” . “They want to feel very normal. They want a server. They want to have a cup of coffee, not a paper cup.”

Struggling before the pandemic, Le Pen Cotidien filed bankruptcy in May 2020. It was acquired by Aurify Brands, which has since reopened several Le Pen Cotidien locations around the city, including several in Midtown.

“Our thinking is that Midtown New York will return to a level that may not be 100 percent pre-pandemic, but based on the information we’ve gathered, I believe Midtown is about to return to a major level.” , said Mr. Smitle.

For Starbucks, a big lesson from the pandemic was that customers preferred to order their drinks online and then pick them up quickly at the store or drive-thru. Starbucks began offering that even before the pandemic, Initial A pickup location at Midtown’s Pennsylvania Plaza in late 2019.

Since the beginning of 2020, Starbucks has permanently closed 44 of its 235 locations in Manhattan. But it is adding mobile pickup areas in many stores and adding more pick-up-only locations. The company says it expects net new store growth in Manhattan over the next few years.

Before the pandemic, Starbucks operated three stores around the Columbus Circle area. It shut them down and opened a bigger restaurant this year. Now Central Park runners pick up their pre-ordered drinks from a mobile counter and then exit, while other customers queue up to place their orders and can sit at nearby tables.

“We were going to build and develop the concept over time,” said John Culver, president of North America and chief operating officer of Starbucks. “What we have done is take the opportunity that the pandemic has presented and accelerate the transformation of our portfolio of stores. Consumer behavior during the pandemic has accelerated to a level that no one expected. “

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