Despite rising cases of breakthrough coronavirus infections and the resulting uncertainty over the efficacy of current vaccines against variants, the retail property market shows impressive signs of recovery at yearend.
Retail sales have moved well above pre-pandemic levels for months, retailer profitability has been improving, and consumption is setting all-time highs even as foot traffic at stores has improved significantly from last year’s levels. However, the most compelling sign of recovery in 2021 is the sharp drop observed in announced store closings.
Following 2020, a year in which retailers set the all-time high for the amount of square feet announced for closing, 2021 is on track to set a new low, marking an encouraging reversal for this leading indicator of the health of the retail sector.
Also, even more encouraging, the amount of space and number of stores retailers said they plan to open during 2021 is well above announced store closings, the first time that has happened since 2014. As of mid-December, just over 3,300 stores have been announced for closing, accounting for 37 million square feet of retail space. At the same time, retailers have announced more than 5,800 store openings, accounting for 53 million square feet.