Tennessee-based hot sauce chain Pepper Palace had been eyeing Wilmington for a new location for about two years when Tavis Scholz, the company’s South region director, toured a storefront on North Front Street that was up for lease.

Scholz said the space at 10 N. Front St. and the Wilmington market, more broadly, seemed like a perfect fit for Pepper Palace brand. The company opened its downtown Wilmington store on March 22.

The roughly 1,000-square-foot space was occupied up until mid-January by local jewelry and gem shop Gems4U, which has consolidated its business into an existing location inside The Cotton Exchange.

Brick-and-mortar stores are particularly important to Pepper Palace’s business model because each store has a “sample bar” that allows customers to try the brand’s products, which range from hot sauce and barbecue sauce to salsas and seasonings.

“Our sample bar is our main feature of every Pepper Palace store location,” said Corey Hnat, the company’s director of marketing. “We get to talk to people, figure out what they like, flavor-wise, heat-level, and then really match them to the right sauce.”

The brand, which has two other North Carolina stores, both in the Asheville area, looks for growing areas and “destination locations” when selecting where it puts down roots, Scholz said.

“Wilmington definitely fits the bill,” Scholz said. “We think that there’s growth ahead in the next few years, and that’s what we’re looking for.”

Like many specialty retailers, Scholz said, the company is focusing on bringing brick-and-mortar stores back into downtown areas and out of shopping malls and retail centers.

“We are focusing our portfolio more on downtown locations,” he said, “and Wilmington is definitely a part of this push to go into downtown areas.”

Pepper Palace is one of the newest additions to downtown Wilmington’s mix of retailers. Crispy Cones, a chain selling hand-rolled dough cones filled with soft-serve ice cream and toppings, opened its doors April 11 at 120 Market St., a space formerly occupied by sandwich chain Jimmy John’s.

Other recent additions include Marked Merchant, a collaborative retail space featuring local vendors that held a ribbon cutting in March for its 18 S. Front St. store, and salon Beauty Bar, which opened in January at 302 N. Front St.

Christina Haley, president and CEO of Wilmington Downtown Inc., said the group has been deeply involved in recruiting businesses to downtown. She said the opening of new chains and local businesses and the closing of others is part of the “normal ebb and flow of downtown and business in general.”

“The turnover rate speaks to the vitality of downtown Wilmington,” Haley said, “and that there is a desire to be within the Central Business District and the greater downtown area, and people are searching for space.”

Jamey Carver was scouting locations for his second Jeremiah’s Italian Ice in the Wilmington area when the space at 306 N. Front St., which formerly housed a Subway, became available.

Carver and his business partner, Fred Kumpel, decided it was the right fit for a second store because the store is highly visible and accessible to those walking or driving past. They purchased the commercial unit and are in the process of upfitting the space into a Jeremiah’s Italian Ice, including adding a walk-up service window. While they’re able to use parts of the existing space, other changes are being made to fit Jeremiah’s branding. They plan to open the business in June.

“Some of the infrastructure is already there,” he said, “we just have to adapt it to meet what our requirements are, and then a lot of the rest of it is mostly cosmetic.”

Haley said the occupancy rate for downtown retail space is around 98%, with business owners waiting for more storefronts to open up. “The challenge is that we only have so much retail space downtown,” she said.

Despite the demand, Haley said there are a few “challenging” spots that have, for years, been vacant on Front Street.

There’s been recent investment in the commercial space at 277 N. Front St., one long-vacant site. Others include a former bank property at 155 N. Front St., along with the former bar space at the corner of Dock and South Front streets.

Haley said infill development has the potential to add more commercial space to the area.

“Those infill projects, should they include retail or be a multi-, mixed-use development, would only add to the fabric of our downtown and be a connection for our retail space,” Haley said.

“You take a look at the Ice House lot, you take a look at the old Wachovia building lot … if we can attract the right developers to create multi-, mixed-use developments in these tracts of land and provide some retail space, I don’t think we’ll have a challenge filling them.”