Changing checkout: After several sluggish years, Chattanooga retailers seeing growth

The COVID years created a lot of difficulties for downtown business owners, said Sarah Mattson, senior director of economic development at the River City Company — but these days, the city is on the upswing.

After several sluggish years, Chattanooga is seeing new growth. In 2025, downtown saw 20 new businesses open, she said. And in the first few months of 2026, an additional 15 businesses have opened or announced they will be opening soon.

Overall, Chattanooga has fared better than other similar-sized cities. Much of that has to do with businesses returning to their offices, continual events being held throughout the city, and tourism numbers that are higher than before the pandemic.

Jim Cheney, vice president of BP Construction, developer for Cambridge Square shopping plaza in Ooltewah, has faith locally owned retail will continue to prosper. He believes people still want to support small business owners.

“You have to make a conscious effort to support brick and mortar establishments these days, there are so many distractions,” he said.

“But I think the communities we serve have showed up time and again to ensure that our tenants are sustained, and I’m optimistic that this will continue as long as we keep a superior level of service in place.”

Sarah Mattson, Senior Director of Economic Development at River City Company

What does “the future of retail” look like for Chattanooga?

At River City Company, we strive to support our local entrepreneurs and retail ecosystem to ensure that it is healthy and includes a diverse mix of local, regional and national brands of shopping and dining experiences. We are so excited to see many first-time entrepreneurs opening downtown, but also we are seeing even more existing businesses expand to second or more locations.

Great examples of this are Mindy B’s Deli who just expanded into a vacant space adjacent to their location. The owner of Attack of the Tatsu is opening a 2nd location next door called Mumashika. And the KALS group is opening their fourth restaurant downtown with the addition of Torikaya to their portfolio that includes Totto, Zaya and Rodizio Grill.

How is Chattanooga’s retail scene different than it was five years ago?

The vibrancy of downtown compared to 2021 can be felt across all the districts in the River City Company footprint. Coming out of COVID-19, some entrepreneurs were hesitant to open due to uncertainty of remote work and other impacts from reduced events.

Today, downtown Chattanooga has fared far better than other cities. We have experienced higher return to work along with a robust programming and events calendar. As a city, we are also attracting more tourists annually than prior to the pandemic. Across all the downtown districts, we are seeing a steady flow of new business openings.

What’s something you’re feeling optimistic about right now?

It is incredible the number of new businesses that have opened recently. In 2025, we saw 20 new businesses open and as of spring this year, we have had an additional 15 open or announce they will soon be opening. This is a new position for me, and I’m excited to work with our local businesses on creating a plan to attract the right mix of businesses that will lead to greater foot traffic and a more rounded experience in downtown.

What keeps you up at night? Biggest challenge?

Locally, we feel we are on the right track. One of the most frequent responses we hear from local businesses is on the macro level, like tighter margins due to increased cost of supplies.

How is technology changing retail locally?

Over the past decade, people have become more and more reliant on social media, reviews and influencers to learn about businesses. It is vital for local businesses to have a strong online presence and to be responsive to customer reviews. AI is only amplifying this as many people now using it to create vacation itineraries and travel plans.

What new ideas or tools are you most excited about?

We are excited about our new program, Scenic Storefronts. Most cities the size of Chattanooga have a program like it to support local businesses. Tenants or building owners with ground floor retail can apply for a one-to-one matching grant that will provide support for interior and exterior permanent improvements such as removal of false facades, masonry repair, window or awning repair or replacement or signage. River City Company provides technical support and design guidelines to the businesses that help to create attractive storefronts and enhance walkability of downtown.

What skills will matter most over the next five years?

Moreso today than in the past, operating with excellence is vital to the success of a business. Not only do they need to have a brand that stands out, but striving for excellent customer service is a must. Online reviews and reputation can be a make or break for a business in the world today.

How is the River City Company helping Chattanooga attract and keep talent? Any talent gaps?

Creating a place where people want to be after work hours is so important. With remote work higher than prior to the pandemic, more people can choose where they want to live, not solely based on where their employer is located. Having a safe, welcoming and vibrant downtown attracts and retains talent in Chattanooga. We are not only creating fun events throughout the year, but our Emerging Producers program is teaching others how to produce high quality events of all sizes in downtown.

What investments do you see that are being made today that you expect will pay off in the next five to 10 years?

A lot of the work River City Company does isn’t seen within a year’s timeframe. Many of our projects, like Evolving Our Rivefront Parks and the vision of Hawk Hill, started many years ago and are on timelines to be completed over the next few years. Having more residents waking up in downtown and having beautiful parks where our residents and visitors can enjoy 365 days a year are investments today that will be enjoyed for generations to come.

What advice would you give a college student or someone trying to get started in retail?

First, before someone thinks about opening a retail shop, they should have a basic understanding of that type of industry. We would recommend to shadow or to be employed at a location. There are incredible resources across Chattanooga as well and would advise to meet with those organizations first. We often refer people to organizations like Launch, the Urban League of Greater Chattanooga, Tennessee Small Business Development Center and the new City of Chattanooga Small Business Resource Center.

Jim Cheney, vice president of BP Construction and developer for Cambridge Square

What does “the future of work” look like in your industry right now? How is it different than it was five years ago?

Real Estate development has never really been a rigid profession in terms of operations and logistics, so the remote aspects of the current work culture are not all that different than they were five years ago, or 20 years ago for that matter.

The technology has increased efficiency to some extent, but I also think that there is a significant over-reliance on tech that fundamentally hinders communication and responsiveness — both critical in the development cycle.

I think tech is a poor substitute for in-person engagement, but you also have to be realistic about how people have come to interact with one another. There is a balance out there, but I don’t think anyone has discovered it yet.

What’s something you’re feeling optimistic about right now?

I’m optimistic that people still value local business and supporting small business owners. You have to make a conscious effort to support brick and mortar establishments these days; there are so many distractions. But I think the communities we serve have showed up time and again to ensure that our tenants are sustained, and I’m optimistic that this will continue as long as we keep a superior level of service in place.

What keeps you up at night? Biggest challenge?

At present, economic uncertainty tied to the current war. But it varies from night to night. Could be a social media dumpster fire or helping a tenant work through a business model issue. Just depends on the crisis climate.

How is technology changing your industry?

Guess it depends on how you define technology. With devices everywhere and people using applications for just about everything, I would say technology is making business in general a lot less personable. It can definitely assist with efficiency and productivity, so it’s somewhat of a mixed bag in terms of its overall value.

From a marketing and communications perspective, the noise out there is deafening so that certainly presents a challenge — trying to break through all of that content clutter with a coherent message intact.

What new ideas or tools are you most excited about?

Not a tool, but a person. We hired a social media manager this year and she has exposed our complete lack of understanding of the modern-day internet.

What skills will matter most over the next five years?

Good communication skills are at the top of the list. Communications is a constant in everything that we do. From pitching to follow-up, that is the common thread.

How are you attracting and keeping talent? Any talent gaps?

Giving people more responsibility and autonomy are the best ways to retain talent. When people feel that they have a say in what their future looks like, they have a vested interest in performing. That and let them know you value what they are doing, while pointing out what they can improve upon. It’s common sense really.

What investments are you making today that you expect will pay off in the next five to 10 years?

Mostly operational and maintenance expenses right now to ensure that the buildings are in good shape going forward. We also try and anticipate economic factors that are likely to have an impact on tenants. Almost all of our tenants are independent operators and down trends can create headaches for them that chains can weather without as much stress.

What advice would you give a college student or someone trying to get started your industry?

Have a basic understanding of how your tenants’ business models work. You can’t be an effective developer if you don’t know who you are building and developing for. Learn how to establish rapport with people and communicate effectively and without intimidation. Write things down and follow-up quickly. Listen much more often than you speak. And most importantly, always trust your gut. If it feels wrong, it probably is.