2024 Retail Fit Out Cost Guide

Retailers in the apparel, footwear, beauty and accessories segments are also expanding for the first time in years. In response to the increasing importance consumers are placing on convenience, many retailers have begun targeting locations in close proximity to residential areas, often in the suburbs. Brands that were traditionally found in department stores or in-line mall space increasingly focus on open-air, suburban shopping centers. Department and Big Box Stores including Macys, Nordstrom and Target are pivoting toward smaller format stores most often found in suburban neighborhood shopping centers. Despite a robust tenant pipeline, there are some macroeconomic concerns facing the sector. Inflation has cooled off since 2022, with the December Consumer Price Index slowing down to 3.4%, which is 3.6% lower than the previous year. However, recent inflation figures are still above the Federal Reserve’s target rate of 2%, as consumers continue to battle heightened prices at the store. Unemployment numbers remain low, and consumers still maintain a favorable view of the labor market. However, consumer sentiment in the labor market has begun to slide over the last few months, with November bringing a 31-month low. In December 2023, overall consumer confidence ticked up 1.6% from a year ago, but is still below pre-pandemic levels after hitting a 15-month low in October 2023.

Despite these concerns, overall consumer spending remains healthy so far, although there may be some challenges on the road ahead if labor markets become unstable.

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2023 YTD RETAIL STORE OPENINGS AND CLOSURES

-2,500 -2,000 -1,500 -1,000 -500 0 500 1,000 1,500 2,000 2,500

Number of Stores

Convenience, Discount & Grocery

Apparel, Footwear, Acc. & Beauty

Luxury, Department Store & Other

Electronics, Home & Office

2022 Net Store Openings 2023 Net Store Openings

Source: Coresight Research (U.S. Store Tracker), Cushman & Wakefield Research

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Cushman & Wakefield