Retail Review V1 2024 FINAL - Flipbook - Page 6
RETAIL TRENDS
ACROSS AMERICA
The U.S. retail real estate sector is staging a robust comeback in 2024,
poised to become commercial real estate’s highest occupancy property
type. Despite facing consumer debt headwinds, the fundamentals are
improving - fueled by an expanding consumer base, pent-up demand for
experiential retail, and disciplined development that is keeping vacancies
near historic lows.
MORE OPENINGS THAN CLOSINGS IN 2023
The sector recorded over 1,000 more store openings than closures in
2023 as retailers raced to establish urban footprints and capitalize on
resilient spending across categories like home improvement, auto sales,
and dining out. This year, 36 of the 50 largest metro areas project retail
inventory growth under 0.5%, driving positive absorption.
PEOPLE ARE STILL SPENDING
Households are prioritizing essentials and experiences, directing record
spending across multiple retail segments in 2023 even as in昀氀ation strained
budgets. The labor market’s recession-defying strength, with 275,000 new
jobs added in February and wage growth outpacing in昀氀ation, is boosting
consumer 昀椀nances.
THERE ARE OBSTACLES,
BUT OPPORTUNITY IS MORE APPARENT
While headwinds like $1 trillion in outstanding credit card debt could
curtail discretionary purchases, the overall trajectory appears positive.
Thriving discount concepts, explosive medical retail growth, and sustained
spending on pet services all signal opportunities. By rightsizing footprints
to emphasize value and convenience, the retail sector is well-positioned to
lead the commercial real estate recovery.