Retail Demand Continues Steady Recovery, Some Pockets of Pain Persist - CoStar Group

Restaurant Growth Reported To Be Especially Strong, Power Centers Attracting Interest from Retailers, but Some in Market Question How Much Activity is Driven by Discounting

By Randyl Drummer

November 9, 2011

CoStar Group

With the holiday shopping season getting under way in earnest this month, recession-weary American consumers are setting aside their worries about stagnant U.S. employment, a soft housing picture and the debt crisis in Europe to go shopping. That's providing fuel for the slow-but-steady improvement in retail property fundamentals that has emerged in recent quarters.

Consumers rode out a slow-but-not-stalled economic expansion during the spring, and annualized GDP growth edged up in the third quarter, with lower interest rates beginning to have their intended effect -- encouraging purchases of durable goods like autos and stronger spending by consumers on home improvements, food and beverage and electronics, furniture and appliances, according to data presented at CoStar Group’s Third-Quarter 2011 Retail Review and Outlook.

"Retail spending started out with ‘needs’-based items like health care and general merchandise at Target and Wal-Mart, and it's now widened to include more of the ‘wants’ by consumers," said Senior Real Estate Strategist Suzanne Mulvee, who co-presented the quarterly review with Real Estate Economist Ryan McCullough.

Even as shopping centers and malls logged their ...

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