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Retail Sales Improve as Consumer Behavior Continues to Shift | U.S. Retail Q3 2022

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The retail sector remains in expansion mode despite growing economic uncertainty from inflation and rising interest rates. At the end of the third quarter, core retail sales, excluding gasoline, auto vehicles, and foodservice, increased by 7.2% on a year-over-year-basis. Retail spend may not be as high as it was a year ago, but overall foot traffic is up for fitness and discount retailers. However, mall foot traffic saw a slight downturn. A more cautious mindset is setting in as households continue to shift their shopping patterns and try to balance their budgets to cope with inflation. As a result, full-service restaurants have bore the brunt of tighter consumer budgets.

The national retail vacancy rate dropped 10 basis points during the third quarter and stands at 4.3%, as retailers remain in growth mode as store openings continue to outpace closures. Average retail asking rents rose to $23.52 per square foot in the third quarter, an increase of 1.1% over the quarter. Though nominal rent growth has been strong, the real rate of growth has failed to keep up with inflation since the start of the pandemic. Retailers signed around 18,000 individual leases spanning 58.1 million square feet in the third quarter, with the average deal size decreasing by 1.7% year-over-year as the demand for smaller spaces progresses.

Nearly 17 million square feet of space were absorbed in the third quarter, with half of the absorption flowing into general retail while malls posted negative absorption for the first time in 2022. Retail space under construction stands at 61.5 million square feet, with 8.3 million square feet of new retail space delivered in the third quarter of 2022. 82 million square feet of existing retail space has been demolished in the U.S. since 2019 and the lack of new retail supply will compress the availability rate and slow down retail openings.

With the third quarter over, retailers now enter the critical golden quarter. It is anticipated that the year will end on a reasonable note, although we caution that the boom times of 2021 will not repeat themselves. Retailers will have to work hard for profitable gains over the holidays, as retailers increase their promotional spend while continuing to discount over-stocked merchandise. Ultimately this will take its toll on retail volumes and retailer margins and profitability heading into the new year.

Q3 2022 Retail Stats

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Retail Stats Q3 2022


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Nicole Larson

National Research Manager | Retail

Fort Lauderdale

As the National Research Manager for Retail Services, I am responsible for studying conditions within the retail sector, collecting and reporting statistical data, and analyzing the data to identify significant trends and opportunities. I am involved with national pitches and pursuits, leading the quarterly National Retail Report, and educating brokers on an array of retail research tools like Restaurant Bytes and Creditintell.   

Based in South Florida, I have been in the commercial real estate industry since 2014, am bilingual in Spanish, and hold a Florida Real Estate Sales Associate License. 

I previously worked as a Senior Research Analyst in the Miami office of Colliers International South Florida where I managed a platform of comprehensive commercial real estate data, information resources, research, and training to support the sales and marketing efforts of the South Florida team. I was responsible for the collection, maintenance, and preparation of data across all property types required for writing quarterly statistical reports, graphs, and charts. My expertise in both leasing and investment sales ranged across multiple asset types including retail, industrial, office, and multifamily.  

Prior to joining Colliers, I was a Compliance Specialist at Orlando-based FBC Mortgage, where I provided guidance to originators regarding disclosures and assistance in the interpretation of federal, state, and industry regulations. I began my real estate career as a Retail Services Intern with BishopBeale in Orlando which required me to analyze market conditions, conduct competitive research to identify new opportunities, and project management for multiple sites across Florida.   

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