The U.S. wireless carrier AT&T (T.N) giant faced the struggle because of declining sales

Last Monday, AT&T announced the shutdown of its flagship shop in downtown San Francisco, causing an additional hit on the city's challenged retail industry.

The reason AT&T to decide to close their flagship store in San Francisco

AT&T reported poor cash flow and failed market projections for its first-quarter earnings in April, highlighting the detrimental effects of tight customer wallets.

A spokeswoman stated that the store at 1 Powell Street in the city's Union Square shopping district is scheduled to close on August 1: “Consumer shopping habits continue to change, and we're changing with them. That means serving customers where they are through the right mix of retail stores, digital channels and our phone-based care team.” 

This upcoming shutdown is part of a larger trend for the AT&T, which is also closing a store in Chicago. As a result, the company will maintain just one flagship store in Dallas.

In spite of AT&T's physical flagstore closing in San Francisco, Collins assured staff that they would not be laid off. "All retail employees affected by this change will be offered jobs at one of our other many retail locations within the city."

AT&T shares the same decision with other major retailers in San Francisco

According to the San Francisco Standard Around, they pointed in a survey published this week that 46 percent of retailers in downtown San Francisco's Westfield Mall have shut down since 2020.

In only three years, 45 of the mall's 97 businesses and 16 of its 36 food providers had closed their doors. 

Abercrombie & Fitch, Banana Republic, Microsoft, Tiffany & Co., and Timberland are among the other big retailers that have left the mall since 2020.

The shutdown applies a day after Cinemark announced intentions to close its Westfield Mall theater and reports that Westfield is closing the mall entirely.

Last month, Westfield assured that Nordstrom's leave lied on dangerous conditions and a lack of law enforcement against rampant criminal activity. Additionally,  San Francisco also was believed to the dismal performance in comparison with other locations. 

Whole Foods, Old Navy, Gap, and Office Depot are just a few of the retailers in the district that have announced closures in recent months.

Only 107 of the 203 stores that opened in 2019 in the city's Union Square district are still open - a 47 percent reduction in only a few pandemic-ravaged years.

The insecure environment in San Francisco

San Francisco is now largely believed to be trapped in an endless cycle. It's the latest chapter in San Francisco's retail system collapse, which has seen several high-end stores quit the downtown area of the city region due to increased thievery and homelessness, which has also pushed away customers. 

According to the official government survey, which is conducted every three years, the quantity of homeless people in San Francisco was nearly 8,000 in February of last year, which ranked the second in total of any year since 2005. 

A number of high-profile criminal incidents, as well as a number of retail closures caused by pervasive and unprosecuted theft, have harmed the town's reputation among prospective visitors. 

When compared to the same period last year, the number of fatal drug overdoses in San Francisco increased by 41% in the first quarter of 2023, as fentanyl ravaged the city's homeless population.

Office workers are now able to work remotely from their home, leading to the downtown area much quieter and the vacant streets more unsafe. The increase in crime then discourages people from visiting downtown. 

As the downtown dries up, the city loses vital tax income, and the surrounding area loses appeal. 

According to projections issued in November by the San Francisco Controller's Office, the city's income loss due to lower property taxes could reach $196 million per year by 2028.