The retail market in the greater Colorado Springs area remains strong though challenged, with residents being choosier about where and how they spend amid rising retail costs driven by inflation, tariffs and global conflict, local industry experts said.

Even as the cost of doing business has increased, retail vacancies have fallen across Colorado Springs, new residents and companies are still moving to the region, and closures have not widely been concentrated within specific areas or neighborhoods, said Mark Useman, a senior broker with NAI Highland, and Dan Rodriguez, a senior managing director with Colorado Springs Commercial.

“Retail is tough in Colorado Springs right now, but it’s still better than what’s going on in a lot of other markets,” Rodriguez said.

And though more people moved out of Colorado last year than moved into the state, El Paso County is still growing. People want to live and do business here, he said.

“We have a good market. This is a good place to live and a lot of people are here because of our strong quality of life. But consumers are confused right now. Things are expensive,” Rodriguez said.

Numerous businesses have shuttered their doors across town throughout the final weeks of 2025 and the first several months of 2026. These include well-known establishments such as Oskar Blues Grill & Brew downtown; WhirlyBall on the east side; Rock Bottom Restaurant & Brewery at the First & Main Town Center; Biaggi’s Ristorante Italiano at The Promenade Shops at Briargate; Capriotti’s locations near downtown, up north and on the east side; On the Border in the Broadmoor Towne Center; and Painted Tree Boutiques on the east side, according to a non-exhaustive list of annual closures and openings developed and maintained by The Gazette.

Some of the closures came with little or no notice. Some of the companies cited various factors like increasing costs, cutbacks in consumer spending or facility-related issues that forced them to close permanently.

Others, such as Wendy’s and Walgreens, have shuttered multiple locations in the greater Springs area over the last year. Both companies cited their closures as the result of their respective broader plans to close hundreds to thousands of locations nationwide. Sonic Drive-In has also closed several local stores but provided no further details.

Though numerous closures have happened so far in 2026, several businesses have opened or announced plans to open, Gazette data show.

Some notable recent openings include the mid-March reopening of the historic Navajo Hogan restaurant and roadside attraction just east of Nevada Avenue and south of East Fillmore Street. The landmark restaurant had been closed for nearly six years following the COVID-19 pandemic and two fires on the property.

In March, the city’s third Barnes & Noble opened in the First & Main Town Center to thousands of guests, and BJ’s Velvet Freez opened its second location on East Platte Avenue. Josh & John’s Ice Cream opened its first drive-thru shop in early April on Garden of the Gods Road.

“We’ve always seen closures; I don’t know that they’re more prevalent now than they were in years past,” Useman said. “The closures have been spread out, so you’re seeing them no matter where (you look in the city). But I still think (retail activity) is healthier in areas where the income is a little bit higher in Colorado Springs, which is north and east. You don’t see as much new activity in the south part of Colorado Springs, unless it’s an area like Fountain.”

A city sales and use tax revenue report released in March, mostly reflecting local business activity in February, shows area clothing stores saw the third-largest percentage increase in sales tax collections from the previous month, behind business services and medical and retail marijuana.

Clothing stores remitted nearly $640,000 in sales tax to the city in March, up about 19% from February and up from roughly 12% a year ago, data show.

March collections for the February filing period show grocery stores remitted 6.5% more in sales tax than the month prior, and 1.9% more than the same period last year. General retail (this category includes department stores, discount stores and certain miscellaneous retailers) remitted about 6% more in sales tax collections to the city in March than in February, and roughly 4% more than in March 2025. Restaurant sales tax collections for the February filing period increased about 3% from the month prior and about 3.9% from March 2025, data show.

The increasing cost of goods, more competition in town and the internet are influencing changes in consumer habits, which are affecting businesses, Useman and Rodriguez said.

Brick-and-mortar stores must compete with online retail giants like Amazon, which can offer same-day or next-day delivery in many cases, Useman said.

Online retail hasn’t “killed” brick-and-mortar businesses, “but it’s changed where we’re looking to go,” Rodriguez added.

“It doesn’t change our desire to go out and do things, but it has changed what we’re willing to go out and do. If the retail experience is lame and I have to shop there in spite of the experience, with the internet, I don’t have that issue,” he said. “The days of mediocre retail are gone.”

Additionally, restaurants have had to battle increasing food, labor and insurance costs with already-thin margins, significantly impacting their ability to turn a profit, Useman said. And as new offerings come into town — In N Out, Whataburger, El Pollo Loco, Dave’s Hot Chicken and Jeff’s Bagel Run, to name a few since the COVID-19 pandemic — they can impact the sales of businesses who have operated locally for longer.

“We have to be more careful with our dollars than we used to. Consumers are using more discretion,” Rodriguez said. “If they’re going out and spending money with a business, they’re going to make it count and go where they want to go. It’s a double-edged sword: the cost of food and goods is a real struggle for national and local businesses, while people are trying to balance out costs. Prices aren’t going down.”

Gas prices can also impact retail and consumer spending and where dollars go, he added. Fuel prices, which were seeing a steady seasonal increase nationwide at the end of February, rose sharply in early March after the U.S. and Israel conducted a major attack on Iran.

A gallon of regular fuel averaged $4.14 in the Colorado Springs metro area as of early last week, compared with $3.76 on average the week prior and $3.05 a year ago, according to figures from North American travel organization AAA.

Useman emphasized that rising gas prices haven’t affected the market significantly.

“It’s too early for that yet, but if this goes on for another year, it could be a problem,” he said.

Retail vacancies have fallen across town, particularly in the city’s rapidly expanding northern sector where space is often leased out before it’s built, Useman said.

For example, the five-suite, 10,000-square-foot Shiloh Mesa Retail Center recently constructed at the corner of Woodmen and Marksheffel Roads is nearly leased out with one small vacancy left to fill, said Useman, who is leasing space there. Tenants include Dairy Queen, El Super Taco and Pacific Dental Services.

The city and county have not overbuilt commercial retail space, either, which helps keep vacancies low, he added.

New residents continue moving in and businesses are expanding, with robust retail activity happening on the north and east ends of Colorado Springs and El Paso County. Areas along Marksheffel and Powers roads, the InterQuest and Northgate areas and the town of Monument, north of Colorado Springs, are experiencing rapid retail growth, Useman said.

Anchor retailers like Denver-based King Soopers, which has opened four larger-format marketplace stores in Colorado Springs and the outlying communities of Falcon to the east and Fountain to the south between 2017 and 2025, are also eager to expand locally.

“Overall, obviously we’re going to have some changes, but we’re still fairly healthy,” Useman said. “And as the economy becomes stronger, interest rates come down and development costs come down, it’ll precipitate more interest and more construction as it gets easier and less costly to build.”