Giving credence to the theory that the retail sector may be strong enough to spur an interest rate hike in the near future, U.S. chain retailers upped their store opening plans both month-over-month and year-over-year in May, according to the National Retailer Demand Monthly report from RBC Capital Markets.
The report notes that retailers in RBC’s database increased their 24-month store opening plans by 0.5 percent since March and 3.4 percent year-to-date, to 79,051. Over a 12-month period, retailers plan to open a total of 41,999 new locations, up 0.2 percent from the numbers reported in March and 2.7 percent year-to-date.
The increases should lead to further improvement in retail occupancy levels and asking rents, notes RBC Capital Markets REIT analyst Rich Moore, one of the report’s authors. “We just returned from the big spring ICSC RECon convention, where the mood among landlords, both public and private, was unmistakable upbeat,” he writes. “Pricing and occupancy metrics are likely to continue to move higher this quarter as retailer demand for space remains robust and new supply is still in check.”
The sectors that registered the most significant monthly increases in store opening plans included crafts retailers, with an added 80 store openings year-to-date, entertainment chains, with an added 47 openings, and apparel stores, with an added 88 openings, as well as childcare centers, with a 120 additional planned store openings.
On the other hand, toy retailers slashed two-year store opening plans by 190 locations since January, laundromats cut planned openings by 60 locations and car care and service retailers cut planned openings by 114 locations.