Friday, April 22, 2022
Citing recent reportage by Coresight Research, which found store openings exceeded store closings, and a flurry of IPOs reported by Retail Dive, foundation researchers called 2021 a "mixed bag for retailers" that, while marked by a declining number of bankruptcies, included high-profile restructurings by major brands, including Belk, Paper Source, Alex & Ani, L'Occitane, Christopher Banks and Loves Furniture in 2021.
Among positive indicators, researchers stated, "approximately 41,000 leases for retail space in the U.S. have been signed-in the first half of 2021, representing 121 million square feet, according to JLL (a commercial real estate services business)." Researchers added that Retail Dive tracked 17 major retailers filed for initial public offerings or direct listings in 2021.
Additional findings by Coresight Research, reported in 2021, show approximately 25 percent of U.S. malls could close over the next three to five years, a trend that began before the pandemic. Coresight researchers reiterated the general viewpoint that malls are on the decline but described the movement as a "reformation" as large retail spaces are repurposed into business parks and community centers.
JLL data released in December 2021 found a 2.9 percent vacancy rate in freestanding retail and noted that mall vacancy—currently at 7.2 percent, up 155 basis points from the first quarter of 2018—continues to rise. "Amongst malls, it's essential to compare the difference in Class performance," JLL researchers wrote. "Class A malls sit at 4.8%, Class B at 7.1%, and Class C at 12.4%.11 (* "A mall's "class" is generally a function of its smaller tenants' sales per square foot.)"
2021 Trends and Future Outlook for Malls, published by Forbes, supported these findings, suggesting shoppers still see a purpose for malls, just with more technology. Placewise, a commercial real estate company, conducted a consumer survey of 594 U.S. adults and found that "60 % of shoppers would be 'extremely interested' or'interested' if their local mall was able to offer all products at the mall for purchase online, where they could shop with multiple retailers at the mall, make one payment for all purchases, and have the items delivered to them, or be able to pick them up at a central location within the mall."
ELFA Foundation researchers further noted differences between urban and rural shoppers, most notably in the areas of technology and access to brick-and-mortar locations, with 46 percent of urban shoppers having the greatest affinity to technology, compared with 38 percent of suburban shoppers and 34 percent of rural shoppers.
"Urbanites were also more likely to own devices like smartwatches and smart speakers," researchers wrote. "But rather than coastal city-dwellers leading this digital charge, the survey found, urbanites in the Midwest were most likely to report they love using digital technology, followed by those in the West and South."
The U.S. Dept. of Agriculture's newsletter, Amber Waves, found rural areas have decreased access to food retail locations, prompting larger supercenters and low-price retail food companies to move in. For example, Dollar Tree has been expanding into rural areas and may also be looking at 3,000 locations for rural concept stores combining the Dollar Tree and Family Dollar banners, according to the study, which stated these new locations would target rural communities of 3,000 to 4,000 people.
A copy of the report is available at www.store.leasefoundation.org/cvweb/cgi-bin/msascartdll.dll/ProductInfo?productcd=Retail2022 
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