7 Retail Trends to Watch
Courtesy of CCIM’s bi-monthly magazine, Commercial Investment Real Estate (Sept/Oct 2013), Seven Retail Trends to Watch. This is generally NATIONAL in perspective and not CHS specific (e.g., we have a shortage of big boxes to re-lease).
1) Internet’s Other Imact – not only creating online sales competition for bricks-and-mortar stores, but the internet is making consumers much more informed, causing pressure on retail margins, translating into pressure on rents landlords can charge.
2) More Sales, Less Space – requiring more efficient inventory control and space needs. The 80/20 rule – 20% of the SKUs generate most of some retailers’ sales and gross margins. Result: more sales in less space and stores getting smaller to focus on the 20% with the highest margins.
3) Bigger Grocers Dominate.
4) Category Killers – national credit-tenant anchors are winning out over same-category regional and local tenants.
5) Big-Box Woes – large vacant boxes are becoming increasingly more difficult to re-tenant.
6) Exclusive Use – 2nd generation retail space is being increasingly impacted by exclusive-use lease provisions.
7) Service Tenants Triumph – Landlords are making greater use of service tenants to maintain occupancy. Think call centers, medical, government and schools/universities that have backfilled former boxes and in-line space.