San Francisco Retail Exodus Continues as AT&T Shuts Flagship Store

Business closures continue in downtown San Francisco as the city's retail and commercial property market struggles, with AT&T joining a long list of companies that have recently shut down their flagship stores in the City by the Bay.

The telecommunications giant has told the San Francisco Standard that it will be closing its flagship store in Union Square, in the city's downtown, on August 1 to better serve its customers.

"Consumer shopping habits continue to change, and we're changing with them," Chris Collins, a spokesperson for the company, told the local newspaper on Thursday. "That means serving customers where they are through the right mix of retail stores, digital channels and our phone-based care team."

Newsweek has asked AT&T for comment.

A similar line was used by Gap, Old Navy's parent company, when announcing that it will be shutting down Old Navy's flagship store in Market Street on July 1, nearly 25 years after it first opened in 1999.

In a statement last month, Gap said that the choice to shut down the store had been "difficult" but it was necessary to "ensure a healthy fleet of stores," adding that the company had already identified better locations in downtown San Francisco to "better serve the needs of the business and our customers."

But the two stores' closures are only the latest in a long and growing series of businesses shutting down in downtown San Francisco as crime rates increase in the area.

Out of 203 retailers present in the city's Union Square area as of 2019, over 90 have closed since the beginning of the pandemic, as reported by the Daily Mail.

In 2021, Target announced reduced night hours in some of its San Francisco stores because of the city's rise in shoplifting and thefts. Later in the same year, Walgreens reported the closure of five of its stores in the city because of a rise in "organized retail crime."

In May, online news website SFGATE reported that T-Mobile had closed its flagship store in San Francisco's Union Square the month before. In April, Whole Foods shut its downtown store after just a year of business, with bosses saying they were unable to "ensure the safety" of their staff in the city. Nordstrom followed suit, leaving the city's central district earlier in May.

According to San Francisco Police Department's crime dashboard, robberies have risen by 16.1 percent in San Francisco between January and April this year, while other crimes like rape and assault have significantly dropped.

The AT&T spokesperson told The Standard that there are still two stores within one mile of 1 Powell St. and over 10 stores and licensed retailers across the city, meaning the company hasn't completely abandoned San Francisco.

The news about AT&T, which followed the announcement that Cinemark will shut down its Westfield San Francisco Centre movie theater, exacerbates concerns over the fate of San Francisco's downtown.

But Ted Egan, San Francisco's chief economist, remains positive, telling Newsweek that he doesn't think that business closures will continue unless there's a recession in the U.S.

"Taxable sales downtown—which is our best measure of commercial activity—has been growing steadily, if slowly," he said.