CW Retail - Food Halls Report

FOOD HALLS OF AMERICA

Retail Growth in the Age of eCommerce

retail world: GAFO. GAFO—the acronym for general merchandise, apparel and accessories, furniture and other sales—is a combination of individual retail categories that the Commerce Department tracks that reflect most U.S. mall retail tenants. GAFO includes the following categories: • General Merchandise • Clothing and Clothing Accessories • Furniture and Home Furnishings • Electronics and Appliances • Sporting Goods, Hobbies, Books and Music • Office Supplies, Stationery and Gifts As of August 2016, eCommerce accounted for 28.2% of all retail sales for these catego- ries (GAFO). The steady drumbeat of bad news in 2016 has been dominated by retailer closures and bankruptcies in these categories, particularly for apparel and department stores. Gains from eCommerce

The continued consumer focus on value, especially since the recession, has created significant challenges for bricks-and-mortar retailers and landlords alike. But it is the acceleration of eCommerce around the globe that has been the big disruptor. The introduction of the tablet in 2010 marked a turning point. Beginning that year, annual eCommerce sales growth nearly doubled, from a consistent range of 7.0% to 8.0% to 15.0% or greater each year after that. Com- pare that growth rate to overall U.S. retail sales growth which since 2010 has consis- tently been in the 2.0% to 3.0% range. But the rise and success of eCommerce hasn’t impacted all retail categories evenly. The story becomes clearer when you explore eCommerce sales figures as they apply to a much narrower portion of the

U.S. eCommerce Share of TOTAL Retail Sales

9.5% 8.1%

Current eCommerce total share of U.S. retail sales, excluding automotive and fuel sales

9.0%

8.0%

Q2 2016

7.0%

6.0%

5.0%

4.0% Millions of Dollars

4.2%

2009

3.0%

Source: U.S. Census Bureau

CUSHMAN & WAKEFIELD

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