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Consumer Resilience Boosts Retail Demand as Expansion Plans Unfold

While there has been a spike in store closures, these spaces will attract backfilling.

By Kristen Smithberg | March 24, 2025 at 05:00 AM

The retail sector has started the year on a strong footing after sustaining positive momentum through 2024, with vacancy rates remaining near record-low levels while rents continue to rise, according to the Marcus & Millichap 2025 Retail National Investment Forecast. Consumer resilience and improving foot traffic across many retail types have fostered demand across a diverse tenant base, and the outlook for the coming year is encouraging as the retail construction pipeline remains modest and several retailers have announced expansion plans.

Some near-term headwinds are likely to impact the sector, including increasing inflation, a shift in consumer behavior, and the potential impact of tariffs. The report noted a spike in store closures will be evident this year, but these spaces will attract backfilling from companies opening stores and expanding their footprints.

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