Retail Fundamentals on the Decline Due to Inflation, Banking Issues: JLL

Originally published on May 9, 2023, by Keisha Virtue for JLL.

Executive summary:

• Retail fundamentals have started to pull back as a consequence of sustained inflation and banking troubles. Consumers have responded to persistent inflation by shifting money away from discretionary goods purchases in favor of groceries and other key necessities. Discounters and online retailers win consumers’ dollars, as real disposable income wanes.

• Net absorption totaled a modest 9.1 million square feet for the quarter – a substantial decline from the 20.1 million square feet absorbed in the fourth quarter.
  

• Demand is still coming largely from discounters like Burlington and dollar stores, as well as QSRs and fast casual restaurants. In fact, aggressive expansion by QSRs and coffee chains have contributed to a record-low availability rate of single-tenant retail space at just 2.4%.

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