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Market Report

Sacramento Retail Market Report

3Q 2022

State Government Supports Stable Demand Base;
Retailers Target Space in Diminishing Pipeline

Public sector and coastal relocations aid local retailers. Government employers served as a vital backstop for labor demand during the pandemic-induced downturn, with Sacramento's job market experiencing the smallest contraction among major California metros in 2020. The metro recouped all job losses early this year, supported by transplants from the Bay Area. The capital region retains a cost-of-living advantage over the state's coastal markets, mitigating the metro's decelerating population growth. Many of these arrivals have a higher discretionary spending capability than the existing population, which should aid area businesses as consumers pare down retail purchases in response to inflation. Furthermore, Sacramento is attracting new firms catering to higher-income clientele, exemplified by Anthropologie and ice cream eatery Salt & Straw taking on space in the city's Midtown District.

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