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Retailers Thrive in Tracy

8 Mar 2022

Tracy has developed as a regional hub for retail, dining, and entertainment due to its strategic location between the Bay Area and the Central Valley, located at the confluence of three major highways. With the City’s population approaching 100,000, retail continues to be attracted to this activity hub with the highest incomes and per capita sales in San Joaquin County. Earlier this fall, the arts and crafts retail giant Hobby Lobby opened its doors at the West Valley Mall. Tracy has recently experienced investment by several national retailers, including Crumbl Cookies and Ghirardelli/Lindt Chocolate. Many regional retailers started a business in Tracy as well, including Bad Boys Brewing, Helle Pie Pizza, La Dona Taqueria Birrieria, The Stained Canvas, The Station and Upscales Catering. A number of factors contribute to this success, as described below.

Dynamic Access

Tracy is centered in the triangle formed by three major interstate highways: I-205, I-580 and I-5. The City’s smart planning resulted in the creation of freeway-oriented retail opportunities with access to customers in Tracy as well as other communities in the region. I-205 alone supports 152,000 annual average daily trips with expansion efforts in the works.

Rapid population growth

Tracy has experienced significant residential growth over the past 20 years that has outpaced that of the Bay Area. As a result, Tracy has a growing population with increasingly disposable incomes. Tracy’s population has grown 70% over the last 20 years with the University of Pacific forecasting Tracy to add over 32,000 residents by 2040. Retailers frequently seek areas that forecast rapid population growth, as it translates into increased sales from the retailer attraction standpoint.


Diverse retail locations

Tracy has 4.6 million square feet of retail space. The space is scattered across the City with the largest cluster in the I-205 area and in downtown. The 750,000 square-foot West Valley Mall provides a variety of attractive shopping, dining, and entertainment options, including a 14-screen movie theater. Other retail options include the Tracy Pavilion, McKinley Village Shopping Center, Northgate Village, Red Maple Village and Gateway Plaza. Additionally, new retail development is in the pipeline at the International Park of Commerce and in South Tracy along Tracy Boulevard.  

Strong employment and income growth

Tracy has enjoyed strong employment increases and low unemployment rates since 2010 until the start of the COVID-19 pandemic. After a short-term drop in employment, the local economy started to recover in 2021. Based on projections from the University of Pacific, Tracy is forecasted to add over 11,000 jobs by 2040. Tracy’s median household incomes increased from about $62,800 in 2000 to $92,000 in 2020, a growth rate of 47%. This reflects improvement in the quality of jobs in Tracy as well as broader economic opportunities advancement in the region.

Work from home transition

Since the beginning of the COVID-19 pandemic, a large share of the labor force shifted to working from home. Because a notable share of Tracy’s jobs is in government, health and education, a transition to remote working options has enhanced overall resident time spent in the City, increasing support for local retail. 

Pro-business environment

The City implemented the Retail Incentive Program, designed to encourage the private sector to invest in Tracy. It consists of a citywide retail incentive program, West Valley Mall revitalization program and hospitality, entertainment, and recreation program. These programs provide a tiered sales tax rebate based on eligible sales, building and plan fee rebates, and direct financial assistance subject to Council discretion.