Page 10
— Retail Properties Quarterly — November 2016
T
he redevelopment of two
regional malls, Costco’s long-
awaited opening and a highly
unique retailer’s search for a
Northern Colorado site have
made for some interesting story
lines over the past several years.
The continued evolution of retail
has been ever present in how these
projects have taken
shape and provides
clues as to what
to expect in the
future.
Before delving
into the aforemen-
tioned projects,
it is important to
recognize three
big picture trends,
which have shaped
post-recession
brick-and-mortar
retailing: the con-
tinued growth in
online shopping, sluggish growth in
wages and an increase in personal
savings.
In her June 8, 2016 Wall Street Jour-
nal article, Laura Stevens reported on
an annual survey by UPS and com-
Score Inc. that polled shoppers who
made at least two online purchases
in a three-month period (exclud-
ing groceries) about their shopping
behavior. Some of the key results of
this survey were:
• 2015 marked the first year that
shoppers made more purchases
online (51 percent) than in brick-and-
mortar stores.
• Shoppers reported that only 20
percent of their purchases were
made in a store the conventional
way, which meant going to a store,
browsing and buying there – down
from 22 percent a year ago.
• 42 percent chose to search and
buy entirely online.
The continued growth of online
shopping has had a dramatic impact.
This major behavioral trend coupled
with sluggish post-recessionary
wage growth is changing the face of
retail development. While job growth
and unemployment have improved
since the recession, wage growth,
which typically is linked with the
former, has not rebounded at the
same rate. Average wage growth the
past two years is 33 percent below
the long-term average from 1983 to
2015, according to Daly, Hobijn and
Pyle’s March 7, 2016, Economic Let-
ter posted by the Federal Reserve
Bank of San Francisco.
The third big picture trend that is
impacting retailers is the nearly 130
percent increase in the U.S. person-
al savings rate since 2007 – 2.5 to
5.8 percent. While few would argue
that such an increase in personal
savings is a bad thing, when cou-
pled with rises in online sales and
slower wage growth, rising employ-
ment and population growth have
not been enough to support historic
per capita retail store expansion
rates, particularly in fashion and
apparel.
These bigger picture trends have
created many ripple effects, includ-
ing:
Retail follows 3 trends in Northern ColoradoRyan J.
Schaefer
CEO, Chrisland
Real Estate Cos.,
Fort Collins
Market Update
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