AT&T announced late on Thursday that their flagship store in Downtown San Francisco, the largest such store for the telecommunications company on the West Coast, is to close on August 1st, becoming the latest business closure to occur in the city’s Union Square.
The departure of the AT&T flagship store marks the latest in retail companies abandoning the city. In the last few years, Walgreens has closed most stores in the city because of the massive amount of crime within its stores. Higher-end stores like Cotopaxi have also cited break-ins and crime as major reasons for leaving. And just within the last three months, all Amazon Go stores, Anthropologie, several high-end Union square stores, and the flagship Whole Foods store all announced that their doors will be closing, along with multiple non-chain stores throughout the city. Last month, both Nordstrom and Saks Off 5th announced the closure of 3 main locations in the city, along with T-Mobile, Old Navy, and Williams-Sonoma also announcing closures. The last major departures, of Westfield leaving the San Francisco Centre mall and the Cinemark at the same mall closing down, came only this week.
However, unlike the usual reasons given by the other companies ranging from crime to severely lowered foot traffic to the general decline of the city, AT&T said on Thursday that the closure was due to a change in customer habits. While some physical stores would remain open, including two AT&T stores within a mile of the flagship store, and AT&T’s main flagship store in Dallas, others, such as the Union Square store and Chicago’s Michigan Avenue flagship store, will be closing.
“Consumer shopping habits continue to change, and we’re changing with them,” AT&T spokesperson Chris Collins said on Thursday. “That means serving customers where they are through the right mix of retail stores, digital channels and our phone-based care team.”
Despite changing consumer trends being the stated reason, there are multiple hints that other factors went into the closure. Most notably, the dangers in Downtown San Francisco and Union Square have been noted by many as a big reason, with further evidence coming on Thursday that the area wasn’t as safe as the city claimed through the action of many TV networks warning reporters to not report on the closure of the Cinemark from the mall as it was too dangerous. The fact that the closure came in Union Square, as compared to stores in areas nearby with lower crime rates that are staying open, pointed to crime as a major reason as well.
Latest major business closure in SF
Experts told the Globe on Friday that it was likely a mix of stated and unstated reasons for the telecommunications giant to close the Union Square location.
“Right now there is a trend of many retail places to pull out of downtowns,” explained Susan Thompson, a San Jose-based real estate advisor who specializes in leased downtown locations. “It is not just a San Francisco thing. Downtowns in general nationwide are not the major shopping locations they used to be, at least in really big cities. Like in AT&T’s case. Why have a store selling phones and plans be in an area with mostly business commuters and tourists when stores in areas with more physical residents are more popular? No one is grabbing a new cell phone plan while on vacation or when rushing to work. They do it when they have more time.”
“Same with shopping in general. Stores in downtowns work when the people walking by, or parking and then walking, see cool shops on the way to a restaurant or store they need to go to, then go around to a few businesses.
“And that brings us to those reasons AT&T possibly didn’t give. Crime, lowered foot traffic due to people not wanting to go downtown or due to remote working, worry about about being a victim due to lowered police presence – all of these factor in to less people going to stores like the AT&T there. People are fine walking around in downtowns or downtown shopping areas when they are safe or they have a huge draw like a stadium or convention center to factor things in. Union Square is notorious for having more and more shops close up, crime spiking, and fewer people wanting to visit there. Consumers changing habits was definitely a factor for AT&T, but it’s impossible to deny the host of other problems in the area too. It had to play some sort of role in their decision.”
More announcements of businesses leaving San Francisco and Union Square are expected to continue throughout the second half of the year as more leases expire.
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