As retail availability hits record lows, retailers are on track to open 1,000 net new stores in the U.S. this year, which experts tout as signs of the sector’s resilience despite turmoil in commercial real estate.
Landlords say demand for retail space has remained robust this year, reports the Wall Street Journal, defying inflation pressures, high interest rates and liquidations including Bed Bath & Beyond and Christmas Tree Shops.
Retail’s strength is largely the result of a sharp drop in retail construction since the 2008-09 financial crisis, which allowed the oversupplied sector to digest its existing real estate. Retailers, meanwhile, started using online sales data and analytics technology to pinpoint locations for successful stores.
Also, predictions that internet sales would wipe out physical retail have failed to materialize. Digitally native companies are opening bricks-and-mortar locations after reaching the limits of online customer acquisition, and shoppers flocked back to stores and restaurants as pandemic restrictions eased.
As of mid-August, retailers had announced plans to open nearly 4,500 new locations while shutting about 3,500, according to advisory and research firm Coresight Research. Nationwide, the rate of available retail space fell to 4.8% in the second quarter, the lowest level in the 18 years that the data has been tracked by real-estate-services firm CBRE.
