Why Secondary Markets Are the New Frontiers for Retail Growth

As competition and costs rise in urban markets, retailers, landlords, and municipalities are rediscovering suburbs and secondary markets as strategic frontiers. What was once considered second-best is now becoming central to growth strategy—offering scale, affordability, and flexibility. In this post, we explore the data, dynamics, and actions shaping this shift.

The Data Driving the Suburban Shift

Suburban expansion is more than anecdotal—it’s backed by hard data. Between 2010 and 2020, suburban populations grew a substantial 10.5%, and the pandemic has only accelerated this movement by enabling remote work and favoring affordability and space—traits typical of suburbs (placer.ai, axios.com, morningbrew.com).

Beyond pure numbers, exurban areas are also booming. U.S. Census data from counties like Polk, FL—home to Haines City—shows nearly 30,000 new residents added in 2023, reinforcing that this isn’t an isolated trend but part of a national shift .

Rising incomes and strong consumer demand accompany this growth. Suburban households, increasingly affluent, express unmet needs across retail categories—creating white‑space opportunities for value, convenience, and experience.

Secondary Doesn’t Mean Second-Rate

Secondary markets aren’t fallback options—they’re strategic plays. As urban markets become crowded, savvy operators are securing first‑mover positions where growth is still early-stage.

This trend shows in performance data: Aldi and Lidl saw traffic jumps in Q1 2025—8.9% and 4.2%, respectively—well above the broader supermarket growth trend (placer.ai). Ulta, too, is tapping into suburban wealth, with median household incomes near $78,000 in its secondary trade areas—underlining affordability aligned with demand.

These markets yield several competitive advantages: lower rent, fewer launch restrictions, and more open municipal relationships. The result? Steadier ROI and sustainable long-term growth.

Suburban Centers as Community Anchors

Today’s suburban centers are reinventing themselves. Where once parking lots reigned, now mixed-use and experiential hubs are taking shape—uniting retail, healthcare, coworking, and public spaces.

This shift is propelled by:

• Policy changes: Cities streamline zoning and permitting for mixed-use, accelerating developer timelines .
• Format innovation: Pop‑ups and flexible leases enable lower-risk concept testing while catalyzing traffic.
• Holistic community focus: Centers are becoming destinations—not just points of purchase.

Landlords can now reposition older centers into vibrant civic assets, while retailers can claim a deeper role in local communities—beyond transactions.

Challenges to Anticipate

No frontier is without risk. Secondary markets demand nuance:

• Data granularity: Metro-level figures can mask the true behavior of trade areas. Without refined analytics, site selection remains conditionally informed.
• Capital reinvestment: Legacy centers may require facelift investments to meet evolving expectations—particularly around accessibility, amenities, and curb appeal.
• Public infrastructure strain: New development can stress roads, utilities, and community sentiment. Early engagement and collaboration with planners and stakeholders is essential.

Planning must extend beyond metrics to include on‑ground realities, infrastructure capacity, and stakeholder readiness for sustained success.

Key Takeaways: What This Means for You

For Municipalities

• Harness demographic and income insights to tell your growth story.
• Offer flexible zoning and fast-track approvals to support mixed-use and modern retail.
• Identify priority retail gaps to proactively market your community.

For Landlords

• Target strategic reinvestments in older centers to maximize renewal ROI.
• Use migration and income trends to enhance leasing pitches to national/regional tenants.
• Embrace pop-up programming to activate space and validate demand.

For Retailers

• Suburban markets offer lower-cost entry, strong loyalty, and high growth potential.
• Use predictive analytics for smarter site-by-site decisions—avoid broad-strokes assumptions.
• Be first—establishing presence builds brand equity before competitors arrive.

Ready to Explore Growth in Secondary Markets?

Whether you're expanding your retail footprint, repositioning a center, or shaping economic development in your community, CRE 360 helps you turn data into action.

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