April 16, 2019
The retail sector is not out of the woods yet, it appears. The latest report by Coresight Research shows U.S., year-to-date announced closures have exceeded the total it recorded for the full year of 2018.
So far this year, U.S. retailers have announced 5,994 store closures and 2,641 store openings. This compares to 5,864 closures and 3,239 openings for the full year 2018, reports Coresight. The number of net store closings this year now stands at 3,353.
Among the latest announced closings include Bed Bath & Beyond (40 stores), and pharmacy retailer Fred’s (159 stores), that joined the ranks of previously announced closings by Gap, JCPenney, Victoria’s Secret and Foot Locker.
The 2018 holiday shopping season was largely positive. December retail sales were 2.3% higher than the previous year, and total sales for 2018 were up 5% over 2017. Department stores such as Macy’s and Nordstrom recorded strong sales. Consumer spending was strong, and malls experienced expansion from retailers such as Sephora and Ulta.
Still, retail sales of late have slipped, dropping 0.2% in February from the previous month.
Reis reported the retail vacancy rate was unchanged at 10.2% in the first quarter. The average asking and effective rent both grew 0.4%, in line with previous quarters. The mall vacancy rate increased 0.3% in the first quarter, as more Sear’s stores closed. Rent growth was flat.
Vacancy increased in 28 of 77 metros in the quarter, similar to previous quarters, according to Reis. However, only 16 metros saw a decline in effective rent. For the year, 48 metros have higher vacancy, and five saw a decline in rent.
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