As New Mexico businesses have been given the green light by Gov. Michelle Lujan Grisham to reopen to their maximum capacities and all color-coded restrictions had been lifted, many are finding that they have some increased competition this year as new business owners look to capitalize on lower rent and available retail space.
On a national level, there were approximately 516,754 new business openings between April 1, 2020, and March 31, 2021. Of those, 146,486, or about 28 percent, were from the first three months of 2021, according to an Economic Average Report published by Yelp. According to the report, categories that saw the most growth include restaurant and food services, which were up 5 percent from Q1 of 2020. Auto services were up 10 percent in that same timeframe—as were local services, up about 16 percent. Areas with the largest new business openings tend to be the more heavily populated states which include California (22,157 openings), Texas (14,860 openings), Florida (14,793 openings) and New York (7,080 openings). In New Mexico the state saw 640 new openings in Q1 of this year as opposed to 557 in Q4 of 2020, a nearly 15 percent difference.
During the height of the pandemic, Nate Zich, president of Simply Design Inc. a New Mexico digital and design agency, tasked his team with creating a website to support business’ efforts to remain open and reach local clientele. The site, whatsopennm.com, has since gradually transitioned to a local directory for new businesses as well. “I saw a lot of people, like contractors who got laid off, decide that they can be their own business,” said Zich. “Between 5 and 10 percent of submissions that we get are now new businesses, such as The Perfect Gift Shoppe near Old Town.” Additionally, it’s not just new businesses that are opening but existing businesses that are changing. “I’ve seen more baby boomers that are retiring and younger people that are taking the business over,” said Zich.
Beyond just new businesses opening, however, large established retail businesses are also finding this an ideal time for expansion with ample vacancies, lower rents and more flexible leasing terms. According to the National Retail Federation, retail sales for 2021 are expected to grow between 10.5 percent and 13.5 percent nationally to more than $4.44 trillion as the economy continues to recover. Retailers such as Ulta Beauty, Burlington Stores, Amazon Fresh, Dick’s Sporting Goods and Five Below are all planning to open dozens of new locations across the country with the latter (Five Below) already slotted for its first New Mexico location in Albuquerque’s Westside. The opening of new businesses brings with it the opportunity for employment as well. According to statistics provided by the Economic Development Department, as of May 2021, the unemployment rate in New Mexico currently sits at 7.4 percent and has seen a gradual decrease from 10 percent just one year prior.
With new businesses opening up, and existing businesses expanding, there’s an optimistic outlook on expected U.S. economic recovery, which is expected to be 6.6 percent in 2021 and 3.8 percent into 2022.