The Sad State of Underground Retail in New York City

At Columbus Circle, only one of the 40 stores that opened in the underground market eight years ago remains open today. At Fulton Center, the decade-old shopping mall in a subway station in Lower Manhattan, is nearly empty. In Midtown, empty storefronts line the Port Authority and Rockefeller Center stations.

The state of retail in New York City’s vast underground subway system is, to put it simply, dismal.

According to the Metropolitan Transportation Authority, nearly three-quarters of public transit seats are empty. This downward trend began before the coronavirus pandemic, but has been exacerbated by the pandemic and the rise of remote and hybrid work.

For travelers, the empty storefronts have created a sense of unease and urban decay. Some doors are locked with chains, their windows covered with for-rent signs. Others are littered with discarded items such as restaurant supplies. Homeless people have taken over empty corners of shopping areas and sleep in stairwells.

For the authority, the surplus of space means a continued decline in retail sales, while the agency — which operates the nation’s largest public transit system of buses, subways and trains — recently missed out on an expected $1 billion in annual revenue after the abrupt repeal of congestion pricing.

The government agency is trying to give new purpose to the vacant spaces, including non-commercial solutions such as art exhibitions and special spaces for street musicians.

For some owners of the now-closed stores, the empty spaces present an unrealistic picture of who might stop off for a quick shopping spree in the middle of their commute.

Both past and present shop owners said they were attracted to the subway system by the large number of passengers who could become customers. Last year, about 3.6 million people rode the subway each weekday, a captive audience of potential shoppers buying drinks and food, as well as trinkets, gifts and clothing.

Leith Hill opened an organic store, Ellary’s Greens, in Manhattan’s Columbus Circle station in 2016.

Since day one, Ms. Hill said, Ellary’s Greens has never made a profit, despite the station being one of the busiest in the city. The store closed in 2017.

Riders “are not there to pick up a chicken,” Ms. Hill said. “They are running through the station to get home.”

Underground shops and kiosks once flourished, nearly as ubiquitous as the subway trains themselves. Nedick’s served orange drinks and hot dogs. Tycoon Luncheonette poured coffee 24 hours a day beneath Times Square. Starting in 1904, Grand Central Oyster Bar & Restaurant opened and continues to serve oysters in Grand Central Terminal.

“It’s been phenomenal,” said Biana Todorovic, co-owner of Tiecoon, a necktie and gift shop that had a store in Pennsylvania Station for two decades and a few years in Grand Central Terminal before closing during the pandemic. “Every year we’ve outperformed the year before, but I knew at some point it would plateau.”

Transit station shops also took off abroad, with large malls and retailers selling sushi, sweaters and snacks to travellers in London and Tokyo. They remain popular.

In the 1980s, there were about 350 stores, kiosks and concessions operated by the transit authority. More have been built in recent years, including a four-story shopping mall atop the Fulton Street station when it underwent a $1.4 billion renovation in 2014.

Retailers, particularly those that don’t sell food or drinks, said riders’ habits have changed over the past 10 to 15 years. Buyers started taking photos of items and saying they would just order them from Amazon, they said.

More recently, remote and hybrid work has taken another hit, Ms. Todorovic said, with fewer people commuting to work each day.

For years she sold items in Tiecoon that attracted the interest of regular customers, such as a man who went shopping for gifts twice a month before flying to Germany for work.

“He doesn’t have to be physically in Germany anymore,” she said. “They just go to Zoom meetings.”

There are now 195 retail spots, most of which are clustered in the metro’s busiest and largest stations. Yet only 54 are open, the authority said, with another 18 under construction and 31 in lease negotiations. The authority brought in nearly $53 million in retail revenue in 2023, down from $72 million in 2019, it said.

Many tenant rent proposals were thwarted when the pandemic hit in early 2020, said David Florio, the authority’s chief real estate transactions and operations officer. To keep some stores open, the authority has offered retailers lower rents that will be phased out over the next few years.

“We are trying to work our way back,” Mr Florio said.

Marshal Cohen, a retail analyst at Circana, a market research firm, says consumers today are looking for convenience and good deals, and it’s rare to find something convenient or cheap at a subway station.

“In the world of the New York City subway system, show me one person who kills a lot of time,” Mr. Cohen said. “Am I going to stop in the middle of my commute to try on a pair of $200 sunglasses?”

Three days a week, Ingrid Abramovitch walks through the Turnstyle Underground Market between the Columbus Circle subway stop and the stairs leading to her office building, Hearst Tower. She said the last time she remembers buying anything was at a wine store that closed early in the pandemic.

“It was so much fun at first,” Ms. Abramovitch, the editor in chief of Elle Decor, said of the market. “But who wants to eat in an area with no windows?”

Louis Termini thought people would eat pizza here.

Mr. Termini, owner of Ignazio’s, a pizzeria in Brooklyn’s Dumbo neighborhood, says he was persuaded to open a branch in the Columbus Circle station after being told that 80,000 passengers would walk past his restaurant each day.

In 2018, he opened his office across from two large stores: a Starbucks and a Dylan’s Candy Bar, both right by the station turnstiles.

Both have since closed, as has Mr. Termini’s pizza shop, which was there for three months. He said he lost $300,000 and was so frustrated by the lack of business that he abandoned everything, including pizza ovens. The rent was also unaffordable, he said, at about $13,000 a month.

“All the foot traffic went up and out of the station,” Mr. Termini said.

Public transport officials now want more food and drink options in stores, particularly in the form of kiosks in metro corridors, on mezzanines and even on platforms.

In some ways, the direction is a reversal from when the MTA removed many food and beverage vendors in the 1980s to clean up stations. The authority is investing in utilities like water and electricity in its century-old stations to accommodate retail.

It is also seeking a vendor to develop and operate a major retail corridor at Grand Central Madison, the commuter rail terminal for the Long Island Rail Road that opened last year. The MTA has contracted out similar retail areas elsewhere, including the recently redeveloped LIRR concourse at Penn Station.

But the MTA recognizes that there is no quick or easy solution. That’s why it’s looking at entirely different uses for empty storefronts. A “busking station” for musicians recently opened next to an underground platform on Manhattan’s Upper West Side. In Midtown, a newspaper stand was converted into a living art space with plants.

“Instead of seeing an empty space, you’re lifted up,” said Sandra Bloodworth, director of the MTA’s Department of Art & Design.

Some shopkeepers in New York City’s subway system still believe a turnaround is coming. Evan Feldman opened a branch of his doughnut shop, Doughnuttery, in Columbus Circle in 2018, the only original shop still open.

Mr. Feldman said the transit authority had lowered his rent at the store and that he had expanded his business by fulfilling catering orders for nearby office buildings and accepting online delivery orders. The underground market is under new management, which has hired extra security guards and relocated homeless people who had taken to sleeping in the stairwells.

“We’re not going strong, but we’re trying,” Mr. Feldman said. “We’re a little bit resilient.”

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