The downtown retail scene in San Francisco is going through a major upheaval. Major retailers are fleeing the city, and the reasons behind the exits are numerous. AT&T is the latest to throw in the towel; the phone giant is shuttering its Powell Street store on August 1.
The list of retailers that have put an end to their downtown San Francisco locations keeps growing. Westfield, Nordstrom, Whole Foods, and Park Hotels & Resorts are among those that shuttered their SF doors in recent months. According to a source in San Francisco City Hall, drug use and criminal activity near stores were factors in the decisions for some of those retailers to close.
The reasons for the mass exodus of retailers are simple. Consumers aren’t going downtown. You can’t ignore the financial strains of the pandemic imposed by the city – AT&T, while still third in its industry, had lagging cash flow for the first quarter of 2021, posting $1 billion.
But it’s hard to deny the role that the homeless and drug crisis has played in the problematic retail landscape. Homelessness in the Bay Area is on the rise; there are 38,000 people in the region without a home on any given night, a staggering 35% increase since 2019. Moreover, there are 7,000 people homeless in San Francisco alone. To deal with the homelessness crisis, the city’s Mayor has proposed to spend over $690 million, but it still hasn’t made a significant dent.
The homelessness crisis comes hand in hand with other types of criminal activity, including drug use. San Francisco’s overall crime rate is somewhat down this year, but there has been an increase in robberies, car thefts, and murders. Drug overdose deaths are big problem as well; with 620 deaths in 2022, they are only slightly down from 640 deaths in 2021.
As this perfect storm of economic, health, and security crises continues to take its toll on the downtown retail scene in San Francisco, it remains to be seen what the future holds for the retail landscape in the city. For now, AT&T’s closure marks another fracture in the once-vibrant San Francisco downtown.
