Retailer Expansion Plans Hinting at Resurgence

A story in Retail Traffic Magazine brings some optimism for resurgence in new retail development projects in the near future. The trade publication reported on the August edition of National Retailer Demand Monthly by RBC Capital Markets and Lease Trac.

In the report, RBC says that the retailers it tracks will open 11 percent more stores in the next two years than they projected at the end of 2011. That is 78,325 stores and 0.6 percent higher than in June, just a few months ago. The most ambitious channel among traditional retail is dollar stores such as Dollar General and Family Dollar. Some apparel stores, and especially those in active wear, are also in the mood to expand. The story cites World Wear Projects, which will open 650 stores by mid-2014, and Teen Discount Zone, who is looking at opening 400 in the same time period.

What is driving the emerging trend? The story says that the current lack of new construction projects is encouraging retailers to sign leases now while demand is rising and supply of quality space is falling. Sooner or later the lack of supply will force new construction. According to experts, this quarter has seen the start of such a trend and that the economic climate of 2013 may favor a rush of new projects.

The story also cites data supplied by The CoStar Group which predicts completions of retail space at about 37 million square feet in 2013 and growing to almost 73 million square feet in 2014. That would be the high water mark for retail development since the trouble started in 2008.

An increase in leased properties for the purpose of opening a store, or renewed new retail construction projects are great news for the members of the at-retail merchandising and marketing service industry.