What the Closure of Macy’s Union Square Means for the Future of San Francisco

Macy’s is reportedly planning to close over 150 locations nationwide, including the iconic Macy’s flagship store in Union Square, downtown San Francisco, California.

I’ve been to the flagship Macy’s in San Francisco multiple times. The store is massive, encompassing multiple floors and nearly any department you can think of. The cosmetics and perfume section alone is bigger than many retail stores opening today.

The loss of the Macy’s Union Square, which is reportedly slated to close in 2025, is a major blow to downtown San Francisco. It feeds into the doom loop narrative that many in the media have been all too quick to perpetuate.

It’s also an indicator of overall changes in the retail landscape that will have major impacts on San Francisco and other big cities. But there’s cause for hope.

Bad Anchors

Decades ago, department stores were the focal points of shopping districts. In the 1960s, my grandmother would spend an entire day at the department store, shopping, eating, having her makeup done, and more.

Because they were commerce hubs, department stores also served as the anchors for other stores around them. They brought people in, and people then patronized jewelers, restaurants, gas stations, and other nearby businesses.

One only needs to look at a modern shopping center built in the last few years to see that the model of using a department store, or even a grocery store, as the anchor for a shopping district no longer works.

Take a look at City Center Bishop Ranch in San Ramon, California, for example. It’s a thriving shopping center that was built in 2018.

Rather than using a food store or massive department store as its anchor, City Center is anchored by an Equinox gym and an upscale movie theater, The Lot.

The old retail concept (use a big store to draw people into your shopping center) is still there, but the stores intended to bring people into the shopping district are totally different.

Blame Amazon

E-commerce is the driving factor behind these changes. When people can shop for clothing and other items online, and even increasingly purchase their groceries with services like Instacart, a department store or grocery store isn’t the draw it used to be.

Instead, people come out to shopping districts for the kind of experiences they can’t duplicate virtually. Seeing a movie in the theater or working out at the gym is a real-world experience that, in today’s world, brings people out.

At City Center, it seems to be working well. Toned people carrying yoga mats are often seen walking through the parking lot, working out at Equinox, and then patronizing Mendocino Farms or other restaurants in the San Ramon area.

Union Square, which is still anchored by giant flagship stores, simply isn’t up with the times. The same can be said for other San Francisco shopping districts that rely on older models, like the Westfield mall downtown that recently closed.

Many in the media will use the closure of Union Square Macy’s as a way to tell stories about crime and progressive policies destroying San Francisco’s economy. Surely, there’s some truth to parts of those narratives.

But the reality is more complicated. Yes, San Francisco is suffering in some ways. However the closure of Macy’s and other flagship stores reflects less on the challenges of San Francisco specifically and more on the challenges of updating legacy retail districts for the new reality of what draws in customers.

Flagship food and department stores are no longer the focal points. As with City Center, gyms, movie theaters, food halls like Eataly in San Jose, and more are now the drivers.

An Exciting Future

Although the transition will be painful, legacy retail districts need to be updated to match the times. Even Macy’s is downsizing its stores, opening smaller, and more targeted locations.

That’s a sad transition for people who have grown up visiting the Union Square Macy’s. But it’s also a transition that’s going to happen whether we like it or not.

It’s especially telling that Macy’s is not only closing the Union Square location but 150 locations nationwide.

I’ll be sad to see the Macy’s Union Square go, and I’m sure many in San Francisco feel the same way. The loss of jobs associated with the closures is a huge blow to the city, too.

But despite these challenges, we at the Bay Area Telegraph remain bullish on the future of San Francisco. The transition to more modern retail areas will be a challenge. However the success of Bay Area shopping districts like City Center and San Jose’s Valley Fair Mall shows that revitalization and change are possible.

Take a moment to grieve the loss of Macy’s in Union Square. But also begin to think about what exciting future stores or businesses might come to replace it.