Marcus & Millichap, 11/24/2010
Core retail sales fell steeply between mid-2008 and mid-2009 but have since staged a recovery to pre-recession levels, with further gains anticipated through the holidays. Despite this consumption recovery, vacancy rates at retail properties remain significantly higher than the levels recorded prior to the recession. This reflects record store closures and the housing-inspired run-up in retail construction. Hundreds of millions of square feet were delivered just as consumers pulled back, but a dramatic shift in consumer behavior also impacted vacancy trends. While monthly core retail sales have surpassed previous peak levels, nearly one-third of the recovered gains have come from e-commerce. Since the trough in monthly retail sales in December 2008, online retail sales climbed nearly $5.6 billion at the expense of many traditional retailers. Drugstores, grocery stores, and restaurants and bars also account for outsized shares of the increase, while clothing stores, building supply dealers and furniture retailers posted the weakest gains.
The recession has given way to a structural shift in shopping behavior that could change the retail landscape for years to come. As job losses mounted and budgets tightened, consumers became more price-conscious, and many discovered lower-price alternatives, such as discount chains and online stores. As the economic recovery gains momentum, consumers may have little incentive to revert to previous shopping habits. While major discount chains will continue to expand, more mom-and-pop retailers, which have already lost sizable market share, will be pushed to the edge. Marginal chains and those that fail to offer a competitive advantage to brick-and-mortar powerhouses or Internet-based services, such as movie rental chains or music stores, will also face steep challenges.
business as usual is over... let's move into a more sustainable future with green retail strategies
No comments:
Post a Comment