It might not always be a smooth path, but the good news is that we are walking it: at the time of writing, over a third of Americans have received at least one dose of a Covid-19 vaccine. The current administration is (as of late March) targeting to complete some 200 million Covid-19 vaccinations by the end of April 2021.
This is giving consumers hope for a better year, an uptick in Spring, and a whole swing in the right direction come Summer. Other positives include the impact of the stimulus checks and a sense of “normal” on the horizon. Combined, this is already starting to affect consumer spending positively – music to the ears of both retailers and retail properties managers.
It is not just us basking in this moment of light: As Bisnow writes:
“Stimulus checks, warmer weather, loosening coronavirus pandemic restrictions, and a brisk pace of Covid-19 vaccinations are all combining to spur a surge in consumer spending that might make 2021 a record-breaker.”
JP Morgan’s U.S. economics team tracks card spending, and their latest info (chart below) shows a marked rise compared to a year ago, and even a small increase from pre-Covid days (remember those?).
The National Retail Federation (NRF) annual forecast (released in February) has predicted sales growth of between 6.5% and 8.2% in 2021 and expects retail sales to exceed $4.33 trillion. They cite pent-up demand as people want to get out and about, despite the boom in e-commerce.
And this tracks nicely with our own predictions for the year, in which Leasing Representative Michael Leon said:
“I expect that there will be a bounce-back, as there is significant pent-up demand for a return to normalcy, but our public health authorities also advise that some social distancing protocols will remain in place as the vaccine is rolled out. As such, I would say there will be a mixture of the two.”
Thankfully, this return to “real world retail” doesn’t spell doom for the “e-tailers”. The NRF also expects online sales to grow by a whopping 18-23% this year.
Insights from ICSC
If you are looking for more data and insight on consumer spending, ICSC hosted a webinar for members on this topic, featuring Stephanie Cegielski, Vice President, Research and Public Relations, ICSC. The presentation is available to members here.
We also see optimism reflected in new business. There are plenty of new business opportunities available. The Rappaport brokerage team have signed a significant number of new leases, and we’ve had several new retail openings already on the books, including…
- CVS has become the first retailer to open at Skyland Town Center in Southeast D.C., occupying a 10,000 SF space facing Good Hope Road SE.
- Marshall’s recently opened its doors at Bull Run Plaza in Manassas.
- Numerous small shop and tenant representation leases for clients such as Chipotle, Raising Cane’s, and Sephora
- Furthermore, new to Village at Leesburg is Bandit Taco, offering artisanal tacos and other Mexican food favorites like burritos and quesadillas.
- Park Potomac is welcoming King Street Oyster Bar, which specializes in oysters – naturally – but offers an array of seafood, including shrimp, clams, fish, and crab.
- Skyland Town has five new confirmed leases! Soon Roaming Rooster, Mezeh, and Tropical Smoothie Cafe will be joining CVS, Lidl, and Starbucks.
- March 2021 really was a stellar month. Not only was there a 66% increase in transactions year-on-year, it was also the third-highest transaction [volume/value] calendar month in ten years.
One for the Books
Additionally, consumer confidence is up, according to the University of Michigan’s consumer survey, by around 8% in March – nearing but not yet meeting pre-pandemic levels. Overall, the sentiment seems to be that we should be gearing up for a record spending year.