LAS VEGAS—“We're definitely seeing the hurt being felt by moderately priced retailers.” So says James Cook, national analytics director for GlobeSt.com Thought Leader Xceligent.

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In this exclusive interview, Cook explains how the extremes—luxury retailers and discounters—are recovering nicely while the mid-range retailers of the world are struggling. Yet, he says, the retail picture as a whole is a positive one, and that will be the prevailing mood here later this month when RECon convenes. Xceligent also takes the wraps off of its latest retail analytics module, something they say the market hasn't seen before and one that can put analytical power into the hands of its clients.

“The discount retailers are doing all right, as is the luxury retailer,” both essentially reflecting the status of their customer base, whether it's being fueled by disposable income or government assistance. “But that middle-market retailer is feeling more pain,” he adds.

Cook cites two very close but very different markets Xceligent tracks, Nashville and Memphis. “In a lot of ways they're emblematic of that bifurcation we're seeing across the US,” he says. “Nashville is being driven by the knowledge economy, and we're seeing a growing base of creative, tech and healthcare professionals. Unemployment there is roughly 5%. Meanwhile, Memphis is a blue-collar city. It's a hub for FedEx, but despite the activity that represents, unemployment is still at 7%.”

While one of Xceligent's advisory board members, working the Nashville beat, describes how the “supply of quality product outstrips demand,” Gordmans, SuperPetz and OfficeMax have vacated locations in Memphis, and Cook reports a Q1 negative absorption of 92,000 square feet.

Furthermore, Nashville's retail vacancy is a low 5.7% while vacancy in Memphis is 11.2% and rising. “There are two Americas,” he says. “The challenge of today's retailer is to serve both.”

But that dichotomy apparently isn't dampening the tone of the overall retail market and “the mood at RECon this year will be pretty positive,” Cook explains. Why? “Because the American consumers are doing better than they have in the past. The latest CNN/ORC poll reported that 52% of Americans called the US economy either 'very good' or 'somewhat good.' ”

That's the first time since September 2007, says Cook, that “poor” wasn't a dominant answer. And 42% of those responding to the poll “said they are better off financially than a year ago. The last time the percent was that high was in July of 2005. Only 34% say they're worse off. The last time the number was that low was in January of that same year.”  

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He adds that consumer confidence is also being driven by still-low fuel prices, which depending on the area can be as low as $2.04 a gallon. Since mid-2011, prices have been swinging from $3.96 a gallon to $3.19. “As a result, consumers have more money to spend on retail entertainment.”

And clearly, as Ken Kercheval of ICSC reported recently on GlobeSt.com, entertainment retail is the trend of the day. Cook reports seeing the same: While total retail sales in Q1 were up 2.2% over the same period a year ago, bars and restaurants were up 7.7%.

Further, “The places where we see the highest rents, the lowest vacancy rates and the most new development are those places where a retail experience is offered,” Cook says, places such as Las Vegas Boulevard, Times Square or Orlando's International Drive.

Brokers are catching the wave of optimism, naturally. Cook comments, “Each quarter we ask our advisory board members to give us a word or phrase that best describes the market. This quarter, the most popular words given by retail brokers were 'robust,' 'active' and 'improving.'  Across the US, we haven't heard anything negative about the future of the retail market.” 

In specific terms, Cook reports that the percent of retail brokers who said leasing activity has begun to tick up rose from 35% in Q4 '14 to 48% this year. In fact, “This quarter, 8% responded 'I've never been busier.' ”

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In the midst of the increasing momentum of the retail market and the brokers who cover it, Xceligent is preparing to launch a new retail analytics module. Set to launch later this year, the new module is designed to being the power of retail analytics to the desktops of Xceligent clients, explains Andrew Jenkins, regional director of analytics for the Mid-Atlantic and the person in charge of the program's development.

“Essentially, our advisory boards help us ensure there's standardization and transparency in the transactions we track, whether its office, industrial or retail,” says Jenkins. “This tool will allow customers outside of our advisory boards to leverage the research they've done and create their own analytics.”

This not only includes market trends, he says, but also the ability to develop a “peer set of buildings and analyze one class of retail properties over time versus others.” They can also track properties outside of the classes defined by the advisory boards, “smaller buildings or single-tenant buildings.”

Plus, the program is designed to be totally customizable and user friendly, adds Jenkins: “The idea here is for the tool itself to allow the customer to be the expert in the marketplace. And you don't need to be a numbers person.”