Total retail sales and food services will decline 5.3% in the first half and rise 2.7% in the second half for a 1.3% full-year decline, while shopping center-inclined sales (from retailers likely to be located in shopping centers) will increase 1.1% in the first half and 3.5% in the second half of the year for a 2.3% total increase.
"There certainly is a lot of pessimism for the potential 2009," said Michael Niemira, ICSC chief economist and director of research in a media conference call. "But that may be too broad-based. The first half of the year is where the pessimism is rightly placed. We think 2009 is a transition year to stronger economic activity."
Because shopping-center inclined sales actually rose slightly in the second half of 2008, Niemira expects sales to rise in 2009. New store openings will decline to between 105,000 to 110,000 this year compared with 110,000 to 115,000 in 2008. The number of store closings, expected to be 150,000 in 2008 (when final data are released) are projected to be about the same this year.
"Those numbers sound huge, but a little perspective is important," Niemira said. According to 2002 US Census Bureau figures, the US has more than 120 million stores. "A 3% to 4% contraction sounds very small in a broader sense."
Still, Niemira expects "some", perhaps 2%, of the nation's 100,000 shopping centers to disappear. "They always do," he said.
The real problem is in the lending side, with the evaporation of the CMBS market and tight lending standards. The Federal Reserve's injection of $1 trillion and the federal government's infusion of $350 billion have yet to work their way through the system.
"Time is the issue here," Niemira said. "Until we get a resolution of the financial crisis, we're locked up."
The result is that Niemira expects that few development projects will be built or even proposed this year or even next.
"The most important thing is for retailers to feel business is coming back and begin to expand their footprint," Niemira said.
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