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Week Ending December 18th, 2021

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Brown's Rants

The Home Stretch

This past week a client of mine called me up, concerned over the “weak retail sales report.” He had just read on MarketWatch; “US Retail Sales Soften in November as Consumers Face High Inflation.”  He was concerned if projections regarding a strong holiday sales season may have missed the mark. Were they overblown to begin with? Did early spending in October divert much of the sales activity? Was the rise of the Omicron variant spooking consumers? Were shoppers finally retracting in the face of 40-year high levels of inflation?

All are legitimate concerns… and potential trends playing out… there is only one problem here. That is that retail sales did not actually soften in November. According to the U.S. Commerce Department, consumers spent approximately $639,829,000,000 in November. This reflects an increase of $1.64 billion over what was spent in October. That equates to just a 0.3% growth rate month-over-month, which is where the headlines have focused.

While this monthly growth rate of 0.3% was lower than some analysts anticipated (Bloomberg’s polling of economists came up with a consensus forecast of 0.8%), it was hardly the bleak report some headlines would have you believe. The more important metric for gauging longer-term health is annual change. November retail sales were up 18.2% year-over-year. And, if you want to gauge last month’s performance against our last “normal” year before the pandemic? They were up 22.4% over 2019 levels.

I am not saying that monthly changes in the numbers are not important any more than I would say daily changes in the stock market are not important. But, at a certain point, those short-term fluctuations are simply noise compared to the longer-term trends behind them. And, unfortunately, a lot of clickbait is noise.

The weaker than expected monthly growth for November totals reflects early shopping patterns as well as some signs of inflationary pressures starting to impact consumers. But were these numbers weak enough to suspect that holiday sales growth predictions exceeding 8.0% are overblown? I do not think so.

We are now in the final home stretch of the holiday shopping season; nearly 150 million people were planning to shop this past weekend. Foot-traffic tracking firm Placer AI predicted footfall would be up significantly over 2020 levels. Likewise, Sensormatic cited a 48% jump in Black Friday foot traffic as a sign that Super Saturday would be strong as well. Will inflation, Omicron, and earlier holiday spending impact the final results? Yes, but just on the margins. Do not mistake the noise for the story and do not mistake headwinds for hurricanes. Consumers are still spending at a record pace.

Here is wishing you all a happy, healthy, and safe holiday season. We will be back the first week of January.

Garrick

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Number of Retailers Deemed ‘Not Stable,” in Big Year-over-Year Drop
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Crowds and Booths Were Small, but Business was Big at ReCon 2021 in Las Vegas
Chain Store Age 12/10

Economic Headlines stories of the week

More than 148 Million Americans Expected to Shop Super Saturday
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Retail Has More, but Slower Growth Ahead, in 2022
Retail Dive 12/16

Seasonal Hiring Lowest in Five Years
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Gen-Z Relied on Buy Now, Pay Later During the Holidays. It is Time to Pay Up
Retail Dive 12/13

How Dollar Stores became America’s Leading Retailers
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Consumer Sentiment Rebounds in December; Inflation Biggest Concern
Chain Store Age 12/10

Inflation Rises at Highest Rate Since 1982
New York Times 12/10

Property Trends stories of the week

Cincinnati Area Mall Redeveloping With Go-Karts, Ice Rink
Cincinnati Business Courier 12/17

New Jersey’s Moorestown Mall Obtains Approval to Add Multifamily
Chain Store Age 12/16

Manhattan Retail Rents Fell Without Tourists, Office Workers
The Real Deal 12/16

Three New Retailers Are Coming to Chicago’s State Street. Really.
Crain’s Chicago Business 12/14

Take a Trip Through the Magnificent Department Stores of Old LA
Los Angeles Times 12/14

Strip Centers Are Doing Better Than You Think
RE Journals 12/13

Six More JC Penney Stores Sell for $52 Million out of Bankruptcy
Costar 12/13

What a $660 PSF Gift Shop Lease Says About Times Square’s Recovery
TheRealDeal 12/13

Retail Headlines stories of the week

ReBag Raises $33 Million, Plans More Stores for 2022
Retail Dive 12/16

Indochino to Launch into Womenswear
Retail Dive 12/16

Target Opening in Auburn, Alabama
Opelika-Auburn News 12/16

Love’s Opens Five New Travel Centers in One Day
CSNews 12/16

Casey’s Closes Acquisition of 40 Pilot Stores
WSILTV.com 12/16

Planet Fitness Expands in Georgia
What Now Atlanta 12/15

Misa Opens First store in Los Angeles
Yahoo! Entertainment 12/14

Karma and Luck Opens in Houston
Houston Business Journal 12/14

Foot Locker Launches Women’s Apparel Brand
Retail Dive 12/14

Warby Parker Opening New Cleveland Area Store
Crain’s Cleveland Business 12/13

How Shoe Carnival Became a Billion Dollar Brand
Retail Dive 12/13

Crate & Barrel Pulls Out of Baltimore’s Towson Town Center
Baltimore Business Journal 12/13

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Chain Store Age 12/10

Grocery Headlines stories of the week

Publix Opening Second Winston-Salem Store
Triad Business Journals 12/18

Hy-Vee Making Moves in Tennessee
ReportDoor 12/18

Hy-Vee Expanding into Southeast in 2022
Des Moines Register 12/18

Amazon Fresh Opens 10th SoCal Grocery Store
Supermarket News 12/17

After Bashas Purchase, Raley’s Outlines Structure for Future Acquisitions
Sacramento Business Journal 12/16

Giant Opens New Philadelphia Area Store
Philly Voice 12/16

Cleveland’s First Meijer Superstore Breaks Ground
Cleveland Jewish News 12/15

Sprouts Gives Big Push in Dallas with Four New Stores
Dallas Culture Map 12/14

Restaurant News stories of the week

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Nation’s Restaurant News 12/17

Cheba Hut Opening in Wrigleyville
QSR Magazine 12/17

Juice it Up Plans to Expand to 200 Units
Nation’s Restaurant News 12/17

FAT Brands Completes Acquisition of Native Grill & Wings
Nation’s Restaurant News 12/17

Chipotle & Five Guys Coming to Beaufort, SC
WTOC.com 12/14

Habit Burger Expanding in SoCal
FastCasual.com 12/14

Victor Cruz is Bringing Krystal to New Jersey
NJ1015.com 12/14

Chick’nCone Expands in St. Louis
QSR Web 12/14

Gordon Ramsay Food Hall Announced for Harrah’s Cherokee Casino Resort in North Carolina
Restaurant Hospitality 12/13

South Louisville Food Hall in the Works for Next Year
Louisville Courier Journal 12/13

Toasted Yolk in Growth Mode
QSR 12/13

Firehouse Subs Expands in Sacramento Area
Sacramento Business Journal 12/13

Taco Bell Opens in Diamondhead
Honolulu Sun Herald 12/13

Hawaiian Brothers Opens First Houston Location
QSR 12/13

Chick Fil-A Opening First Boston Restaurant
Boston.com 12/13

REITs, Landlord & Development stories of the week

Phoenix Shopping Center Arcade Fiesta Sells for $41.65 Million
AZ Big Media 12/15

Times Square Retail Property Trading for $190 Million
Globe Street 12/15

Las Vegas Shopping Center Sale (Rainbow Plaza) Among Region’s Largest of Past Year
Costar 12/14

Deal for M&M’s World Space in NYC’s Times Square Shows Retail’s Rebound
Costar 12/14

Minnetonka’s Ridgehaven Mall Sells for $36 Million
Minneapolis St. Paul Business Journal 12/13

United Hampshire Buys Publix-Anchored Richmond VA Grocery Center for $26.3 Million
RE Business Online 12/13

Developers Plan $750 Million Redevelopment of Phoenix’s Metrocenter Mall
Costar 12/13

Southridge Mall’s Owner Agrees to Foreclosure, Debt Tops $121 Million
Milwaukee Business Journal 12/12

ecommerce, omnichannel, retail tech stories of the week

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Lululemon Breaks eCommerce Records
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