- Tom Silva
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Retailers Take a Hit; Specialty Shops on the Move
Have you noticed that some of your favorite stores are disappearing? Tough economic times have made people rethink their discretionary spending, and that is impacting specialty retailers. According to a study by Commercial Property News and Claritas, a CPN-sister company specializing in retail-related demographic and marketing research, retailers are rethinking their 2008 growth plans.
The Standard & Poor’s Rating Services sees higher mortgage payments and rising energy prices slowing U.S. consumer spending by 2.2 percent during 2008. Because consumer spending makes up 71 percent of the global domestic product (GDP), even a slight slowdown will impact other economic segments.
National retailer Talbots, Inc., plans to close 100 under-performing locations. Similarly, The Gap is closing some locations, including several Old Navy and Banana Republic stores. Conversely, specialty market segments are performing surprisingly well. Talbots may open 35 Talbots Woman stores and 40 Talbots Premium Outlet locations over the next three years.
Consumer electronics sales are also down, with the International Council of Shopping Centers forecasting only two percent growth this year. That contrasts with the three percent increase last year, and less than one-third of the 6.6 percent growth rate reported during 2006.