Consumers might not be thrilled with the U.S. economy, but at least their confidence is growing.
That is the message from Marcus & Millichap in its latest national retail research report. According to the report, core retail sales — all retail sales not including gasoline and autos — rose 3.9 percent this March when compared to the same month one year earlier.
Marcus & Millichap said that the growth in retail sales is led by consumer spending on home-improvement projects, something that has boosted receipts at stores that sell building materials and supplies by 10.8 percent from last March to this March. Sporting goods and hobby outlets also saw solid gains, posting sales increases of 6.1 percent over the year.
The health and personal care retail category, a category that includes drugstores, registered a jump of 6.3 percent.
Of course, online retail sales have been strong, too. Marcus & Millichap reported that online sales jumped 6.5 percent during the past 12 months. Marcus & Millichap said that several retailers are changing their employment strategies to meet the growing online demand. Nordstrom, for instance, recently announced large job cuts as it shifted its labor force to favor e-commerce. Sports Chalet took even more drastic steps, announcing plans to close all of its stores.
Marcus & Millichap reported that expanding retailers will occupy an additional 61 million square feet of space this year. This should drop the U.S. retail vacancy rate 30 basis points to 5.9 percent, which would be the lowest level since 2005. Marcus predicted, too, that retail rents should jump 2.8 percent this year.