Carrie McCarthy, a division chief at Montgomery County’s Planning Board, described the current retail climate as “stable but softening.”
McCarthy told the Montgomery County Council Economic Development Committee on Thursday that while there are some weak spots, the county’s reputation as a wealthy D.C. area suburb still makes it an attractive location for retail. But, she added, “there’s a lot of uncertainty and chaos out there.”
“Consumers are still spending, but cautiously,” McCarthy said of retail nationally.
She added that in Montgomery County, the retail industry employs over 68,000 people, mostly in food services and grocery stores. There’s about 3,400 retail establishments in the county.
According to McCarthy, residents spend most on food and beverages, entertainment, clothing and child care.
“Montgomery County households are expected to spend about $13 billion on these retail categories,” McCarthy said.
McCarthy noted that child care might not seem like a part of the retail sector, but the market is changing what we think of a retail consumer, and child care businesses can be a “good occupier of ground-floor retail space.”
The development of online shopping and the impact of the pandemic led some to make predictions that brick and mortar retail outlets were doomed, but McCarthy told the council committee that businesses that started as e-retailers “do often find that they want a brick and mortar location.”
McCarthy also said that retail outlets make communities “lovable as well as livable.”
“People have their neighborhood market, their neighborhood restaurant — it’s a private sector vehicle for supporting social connections,” she said.
Vacancy rates for retail vary across the county, ranging from 31% in the Chevy Chase and Friendship Heights area to 10% in downtown Silver Spring, according to data supplied by McCarthy.
Noting the impact that federal job losses have had in the county, along with tariffs that affect businesses, McCarthy said retail has taken some hits, but it will bounce back. She said in these times, it’s about supporting businesses and helping them change their business plans as needed.
Geoff Sharpe, vice president of creative planning and development for Federal Realty Investment Trust, told the committee there are a number of ways the county can assist retailers.
He listed pilot programs, community improvement districts and property tax abatements as “tools that could be employed to foster retail development.”
Sharpe also talked about how online shopping has changed the way brick and mortar outlets operate. He referred to “BOPIS,” or the “buy online, pickup in store” model that many retailers have added.
“For retail businesses to have successful BOPIS, you need to have circulation patterns that make sense. You need to be able to offer short-term parking that’s proximate to the store,” Sharpe said.
Across the country, localities have been faced with what to do with shuttered large retail outlets or even shopping malls. Sharpe said even in smaller spaces, a retailer will have to redevelop the space to adapt to modern shopping preferences.
“Minimizing the time and the cost of making those changes is really important so that we can accommodate those retail businesses in Montgomery County,” he said.
An updated report from Montgomery County Planning is expected by spring of 2026.
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Amid ‘uncertainty and chaos,’ Montgomery County examines the health of retail
