Today was the first day I was out in a week — been under the weather with a chest cold/sore throat misery.
I was surprised by a couple of things:
First, it was more like a weekend in the stores — Target was jammed, and a few other stops were similarly crowded. Whether it was bargain hunters, or this is merely part of a four day weekend, lots of folks were out and about shopping.
Second, a plethora of commercial retail space is for rent. I have never seen so many empty store fronts, and in very nice areas. The FedEx Kinkos by us is toast; A number of local family owned shops are empty with big For Rent signs in the window. The Harvey’s Electronics that closed 8 months ago is still for rent.
The Retail sector is DOWNSIZING. That means fewer stores, few square footage, few employees, and perhaps even fewer chains. The new frugal future is here, and that means tighter margins for retailers, with little room for error.
Even if the economy recovers tomorrow, we still have excess retailers. MEW is a non-option, leverage s coming out of the system, and wages are stagnant. The next 10 years in Retail with look nothing mlike the previous 10 years.
Its obviously already been impacting the REITs, but this is very bad news for the CRE market. What do you do when your industry gets appreciably smaller, other than suffer some pain and consequences?
>
UPDATE: January 3, 2008 10:43am
Just came across this article in CNN /Money:
The ugly sales year that was 2008 will haunt U.S. retailers in 2009, with industry experts warning that disastrous holiday sales will spark a domino effect of store closures and bankruptcy filings.
And, with thousands of fewer stores, the “shop-’til-you-drop” mentality that has characterized American consumerism could be coming to an end.
“There’s going to be a massive sea change in the retail landscape,” said Nina Kampler, executive vice president with Hilco Real Estate, which advises retailers on their property management.
She said many strip shopping centers already have multiple big-box vacancies after several large stores filed for bankruptcy in 2008. Some eventually went out of business
Thousands of stores to disappear in ’09
By Parija B. Kavilanz, CNNMoney.com senior writer
CNN/Money January 1, 2009: 8:34 PM ET
http://money.cnn.com/2008/12/31/news/economy/retail_closures/index.htm?postversion=2009010120
What's been said:
Discussions found on the web: