In the
‘90s
offices may have been about
10 by 20
today it’s
10 by 10
[square feet].
[square feet];
—FRANK STAATS, CPM, VICE PRESIDENT OF PROPERTY
MANAGEMENT FOR HOUSTON CENTER
“
”
Group, there has been a gradual recovery and moderate
sales increases for A and B centers, within the 3 to 6
percent range, while C centers fall within the 1 to 3
percent range.
“Luxury sales continued to climb in the first six
months [of 2011], as most of those higher income bracket
consumers have not been affected by the economic
downturn,” said Raquet.
At the same time, when high-end retailers lower prices
and offer flash sales, demand declines for the middle
market. “The middle segment of the market is slow and
contracting,” said Thorpe.
Value retail is extremely popular today, with stores
such as Nordstrom Rack in growth mode. Further, bulk
shopping is continuing to grow with stores like Costco
and BJ’s showing significant growth.
“People are focusing on essentials and buying in bulk in
order to get the most from their money,” said Raquet.
WHAT GOT US HERE
“The recession has had a huge impact on our culture and
how people buy, shop and prioritize,” said Staats.
The high unemployment rate has played the most
prominent role in the slowed retail recovery. In fact,
markets with unemployment lower than the U.S. average
are the ones experiencing the strongest rebound in retail
demand. According to Cassidy Turley, the economy
produced just 54,000 new non-farm payroll jobs in May
2011. Job creation had been growing at an average of
160,000 new jobs per month since October 2010. The
number of unemployment insurance claims has been
hovering around 420,000 in both May and June of 2011.
However, economists are predicting that the most
recent economic slowdown will hurt U.S. job growth for
the remainder of 2011. According to Cassidy Turley, by
2012, the relationship between strong corporate profits
and employment will translate into job creation, with the
U.S. economy adding 175,000 jobs per month in 2012. Yet,
unemployment will likely remain above 8. 5 percent.
The unemployment rate affects consumer spending
and, thus, weighs on the prospects for retailers.
“With high unemployment rates, households need to
build their savings again, and housing values continue
to fall,” said Mansour. “That is part of what is impacting
consumers.”
Rising gas prices have also played a significant role in
the slowed retail recovery. According to Cassidy Turley,
every $1 increase in gasoline prices causes U.S. consumers
to spend an extra $134 billion on fuel, with more than
50 percent of that revenue going to overseas producers
