Consumption tailwinds back demand for available space. Labor market resiliency, wage growth and easing inflationary pressures aided consumers’ spending power in April, supporting a 0.6 percent increase in core retail sales. Households concentrated their spending on essential goods and seasonal items during the month, generating sales growth across the health and personal care, building and gardening materials, and general merchandise categories. Consumers were also eager to spend more dining out, despite an increase in the price index for food away from home and a greater reliance on credit. Together, these spending trends have positive implications for retail space demand at a time when single-tenant vacancy is already historically limited, and multitenant vacancy is below pre-pandemic levels.

Key Features Include:

  • Health a priority for both shoppers and retailers
  • Demand for experiential destinations apparent
  • Reactive stance adopted
  • Bank collapses impact primary retail lending source

Marcus & Millichap’s Full Report:
Improvement in Core Spending Reinforces Positive Outlook for Retail