How Secondary Markets Became the Next Growth Engine for Retail
By The Greenberg Group Insights Team
Not long ago, expansion-minded retailers focused almost exclusively on primary markets—major metros with proven purchasing power and dense shopping districts. But today, some of the strongest growth stories in retail are unfolding one tier down: in secondary and even tertiary markets that were once overlooked.
At The Greenberg Group, we’ve seen this shift firsthand. The same analytics and field intelligence that once drove success in New York, Los Angeles, and Chicago now point to opportunity in places like Charlotte, Boise, and Sarasota. The reasons go beyond rent—it’s about where customers live, how they shop, and what they expect from physical retail in a post-pandemic world.
Why Secondary Markets Are Surging
The retail migration toward smaller metros isn’t a fluke—it’s a fundamental shift in consumer geography. Several converging factors are driving this trend:
- Population dispersion. Remote and hybrid work untethered millions from coastal hubs, fueling growth in mid-sized cities with quality of life advantages.
- Lower occupancy costs. Retailers are trading $250-per-square-foot rents for equally productive sites at half the cost.
- Less competition. Many national brands have yet to saturate these markets, creating whitespace for emerging concepts.
- Customer loyalty. Smaller communities reward presence; stores often become anchors for local lifestyle ecosystems.
These markets are no longer “second choice.” They’re where the next generation of retail brands is winning early and scaling sustainably.
The New Economics of Site Selection
In primary markets, the math has always been straightforward: higher rent, higher volume, higher visibility. Secondary markets flip that equation. Here, profitability is driven not by density, but by efficiency.
Retailers expanding into these markets are finding that:
- Occupancy ratios are significantly lower, improving store-level EBITDA.
- Sales volatility is reduced because traffic is more stable and less tourist-dependent.
- Portfolio diversification reduces risk by balancing premium flagships with steady regional performers.
The result: a more resilient expansion model that performs across economic cycles.
How Data Identifies “Next-Gen” Markets
The key to unlocking secondary market potential lies in modern data interpretation. At TGG, we combine demographic shifts, mobility tracking, and psychographic segmentation to find markets that mirror the performance traits of top-tier cities—without the saturation.
For example, a high-end children’s brand might find its ideal audience not in San Francisco, but in suburban Nashville—where household incomes, education levels, and lifestyle spending align perfectly with its customer profile. Our models isolate those parallels, then validate them on the ground.
What It Takes to Succeed Locally
Winning in secondary markets isn’t just about finding cheaper rent—it’s about understanding the nuances of community and customer.
- Choose centers with synergy. Co-tenancy matters more than ever. Align with neighbors that reinforce your brand’s identity.
- Respect the local context. National brands that adapt—through merchandising, community events, or regional partnerships—build faster trust and traction.
- Negotiate for flexibility. Smaller markets evolve quickly. Lease terms should allow for right-sizing, relocation, or expansion within the same region.
These principles turn market entry into a long-term brand investment, not a one-off experiment.
The Greenberg Group Perspective
For over three decades, The Greenberg Group has helped retailers identify and unlock these emerging market opportunities. Our analytics platforms and on-the-ground experience reveal where demand is growing—and where competitors aren’t looking yet.
We’ve guided brands through expansions that balance aspiration and pragmatism: entering markets that feel like the store next door—close to the customer, true to the brand, and built for lasting performance.
Ready to discover your next market?
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