A Discount Retailer Might Soon Take the Place of Your Shuttered Bed Bath & Beyond

What happened

Bed Bath & Beyond has filed for bankruptcy and will be winding down operations over the next couple of months. Not only does that mean the loss of a beloved home goods chain, but it also means that neighborhoods will potentially have to grapple with vacant storefronts. But the good news is that a number of known discount retailers are already making plans to take over those empty storefronts.

So what

Bed Bath & Beyond has closed 400 stores over the past year and still has almost 500 more to shut down, including 120 buybuy Baby locations. But discount retailers like Ross, TJ Maxx, and HomeGoods have already stepped up to take over those vacant or soon-to-be vacant storefronts, reports CNN. And retailers that include Five Below, Nordstrom Rack, and Burlington may take over those spots as well.

"A lot of great real estate is going to come available into a market where there’s been no vacancies," said Brandon Isner, the head of retail research at CBRE, a commercial real estate firm. "It will not take long for retailers to occupy those spaces."

Now what

In an age when inflation is wreaking havoc on so many people's finances and forcing consumers into credit card debt, having access to discount retailers is a good thing. Families with children in particular often have to spring for new clothing and things like school supplies on a regular basis, so being able to access those items at a lower price point is key.

But that's not the only reason it's important to see those empty Bed Bath & Beyond locations being filled. Empty storefronts have the potential to drive property values downward. And many retailers have been hesitant to sign new commercial leases in the wake of the pandemic.

Since 2020, the share of consumers doing their shopping online has grown, so a lot of businesses are less interested in physical real estate and are more invested in ramping up their online presence. But that's bad not just for commercial real estate investors, but property owners, too. If discount retailers continue to scoop up those vacant Bed Bath & Beyond stores in short order, it might allow home values to hold steady, leaving homeowners with more equity in their properties to tap.