The number of retail businesses in greater downtown Seattle has shrunk, says a new study from the Downtown Seattle Association. Eric Pyrne reports:

The store count fell from 1,010 in 2004 to 901 in 2009, association President Kate Joncas told an audience of more than 900 at the group's annual "State of Downtown" economic forum Thursday.

"The drop in retail downtown is not dramatic enough that we are calling it a crisis yet," Joncas said in an interview later. "But we need to pay attention."

Last year alone the number of retail stores in greater downtown, which stretches from South Lake Union to Capitol Hill to Sodo, fell 2.7 percent, according to statistics compiled by the Downtown Seattle Association (DSA).

In the retail core — downtown's heart — the drop topped 10 percent for the year.

Joncas attributed the declines, in part, to store consolidations by national chains and increased competition from the suburbs. National and international retailers "are choosing Bellevue first, not us," she told the forum.

New developments in Bellevue, like the Bravern and Lincoln Square, are the kinds of projects folks like Joncas are concerned about. When Neiman Marcus opened their first store in the area, it was in Bellevue at the Bravern, and not in downtown Seattle. For some, the embarrassment of losing to a company like this to Bellevue will bring calls for another Pacific Place-type development, the folks who concern themselves with the health of downtown businesses could go another direction.

Why not encourage small retail businesses? It's going to get harder and harder to compete with places like Bellevue for high-end retail, so a shift in strategy is worth considering. Instead of courting large national brands, let's fill that empty 10 percent with new small businesses. With Seattle's ethos of "buying local," it is a strategy we're already adopting—particularly in neighborhoods like Capitol Hill. Our downtown shopping core should support this, too.

For folks who live downtown, this will have an added benefit. It will make a downtown look a bit more like a neighborhood. Small scale retail will put eyes on the street at a time when there is real concern over safety. This kind of change is going to be tough to make, but while our economy is in the tank, now is the time to try something different.