Montgomery Planning study shows county’s retail sector remains healthy, with opportunities for targeted new investment – Mocofeed

Reinvestment and redevelopment of older shopping centers and shifts toward smaller spaces and experience-focused businesses will drive retail growth in Montgomery County

WHEATON, Md. – The Montgomery County Planning Department, part of The Maryland-National Capital Park and Planning Commission (M-NCPPC), released its updated Countywide Retail Market Assessment, which shows that while market conditions vary place to place in Montgomery County, its overall retail sector remains healthy and resilient. Given the mature state of the county, slower population growth, and changing consumer behavior, retail opportunities will be more targeted and focused on incremental redevelopment than on major new retail construction.

Read the full 2026 Countywide Retail Market Assessment and staff report that Montgomery Planning’s Research and Strategic Projects Division staff and project consultants Econsult Solutions, Inc. and The Riddle Company presented today to the Montgomery County Planning Board, also part of the Commission. The study is an update to the county’s 2017 Montgomery County Retail Strategy Study and examines how the retail landscape has changed over the past decade, particularly as a result of the COVID-19 pandemic, the continued growth of e-commerce, and evolving consumer preferences.

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“Montgomery County’s retail market remains strong, but consumer spending is evolving with more demand for experience-based businesses,” said project lead Alex Pemberton. “As online shopping grows, physical retail spaces are shifting to focus on dining, entertainment, fitness, wellness, and services that can’t be delivered to your front door. We found that the greatest opportunities moving forward will come from modernizing existing retail centers and creating vibrant mixed-use communities where consumers want to spend their time.”

Retail market fundamentals are positive

Montgomery County’s strong population base, projected growth, and substantial household purchasing power provide a stable foundation for continued retail activity. However, future retail investment is expected to be more targeted and incremental with greater emphasis on renovating and repositioning existing retail space and incorporating retail space into mixed-use residential developments; retail space in mixed-use buildings increased nearly 50% in the county from 2015 to 2025, accounting for 24% of all new retail space in the past decade.

Retail conditions vary significantly across the county

The assessmenthighlights substantial differences among retail submarkets, underscoring the need for place-based strategies rather than a one-size-fits-all approach. For example, Friendship Heights continues to transition away from large-format retailers and department stores but remains well positioned for food-and-beverage establishments, boutique retail and neighborhood-serving businesses. In other areas of the county, large retail and grocery stores continue to thrive and serve as major community destinations.

Consumers shifting from products to experiences

Consumers are increasingly choosing experience and service-oriented businesses over traditional retail shopping, driving demand for restaurants, entertainment venues, fitness facilities, and healthcare providers, while department stores and some large-format retail concepts face ongoing challenges. County demographics are intensifying a national trend toward service-retail, wellness, and “medtail” or the placing of health care and related services inside spaces like shopping centers, strip malls, and former department stores. The county’s 65 and older population share doubled (9% to 18%) since 1980 while the under-35 share fell from 55% to 42%. Meanwhile, food and beverage comprise about half ($823 million) of Montgomery County’s projected $1.6 billion in retail spending growth from 2025 to 2030 – the highest projected spending growth of any peer jurisdiction in the Washington, DC region.

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Future retail development will be smaller in scale and more flexible in design

Retailers increasingly prefer smaller, more adaptable spaces as e-commerce continues to reshape the industry. Many retailers are reducing their physical footprints and using stores as showrooms, pickup locations, or experience-focused destinations that complement online sales.

Informing Future Decisions

The Countywide Retail Market Assessment provides a data-rich resource for planners, decisionmakers, business and property owners, and community members. The study’s local market profiles and recommendations will inform near-term plans, development review and policy work, with some of the recommendations warranting additional study, funding, or policy action. The report is also intended to be a resource for business and property owners to better understand local market conditions and opportunities for investment, and for residents to find more information about the characteristics of retail in their communities.