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Weekly Market Insight
Retail Sales
 July 16, 2012

Source: Newmark Grubb Knight Frank, Census Bureau 		Consumers stayed cautious in June as retail sales slipped 0.5%, the third consecutive monthly decline. That has not happened since the end of 2008 in the thick of the financial crisis. Part of last month’s decline was due to some good news for consumers, namely a 1.8% reduction in gas prices, which have fallen substantially for the past three months. Easing fuel prices were not enough to spur sales in other categories, however. Besides gasoline, declines were led by building materials (-1.6%); sporting goods, hobby, book and music stores (-1.6%), electronics and appliance stores (-0.8%) and furniture and home furnishings stores (-0.8%). Core retail sales, which exclude motor vehicles and gasoline, were off by 0.2% in June. Despite weak sales in recent months, merchants absorbed 3.1 million square feet of retail space in the second quarter, enough to keep the vacancy rate steady at 7.0% according to CoStar. Demand fell considerably from the quarterly average of 16.3 million square feet absorbed over the prior three quarters. With consumer spending accounting for 70% of GDP, the recent decline in retail sales has ramifications beyond the shopping center market. The economy is treading close to a recession, repeating a trend from the past two summers. Growth strengthened late in 2010 and 2011, and most economists expect this pattern to reassert itself this year. Nevertheless, risks are weighted to the downside.

Need more information? Contact:

Robert Bach
National Director, Market Analytics
312.698.6754