Average asking rents in the retail sector rose 4.1% in the fourth quarter of 2023 on a year-over-year basis, according to Cushman & Wakefield. Limited amounts of new construction have "kept a ceiling on the vacancy rate," which is now at the lowest point since tracking started in 2007, Cushman notes. Evidence shows that e-commerce operations and physical stores are complementing one another, and the tenant mix at shopping centers has grown more diverse.

With the sector in better shape than in recent years, some retail landlords are no longer offering concessions and other inducements to tenants as they did during the pandemic era. Vacancies declined to 5.3% at US shopping centers in the final quarter of 2023, which is the lowest level since tracking began in 2007.

This could be a good year for commercial real estate investment, according to a report by BlackRock Real Estate Research, which finds that investments made after a downturn tend to do well. "Even though we are in a 'higher for longer' environment, real estate is in a stronger position today than it have been for the previous 18 months," the report said.

Target, Walmart and Albertsons received top scores for their performance in streamlining online order fulfillment, according to an Ipsos study. Whole Foods Market was notable for its communication during the delivery process, Albertsons was both the top grocer for curbside pickup and the grocer with the most return shoppers for delivery, and Amazon Fresh had the most return shoppers for curbside pickup.

Grocers are establishing themselves as sources of wellness education and individualized benefits to showcase the extent of their inventories and build loyalty among customers used to shopping at wellness-centered stores. Meijer offers Michigan shoppers virtual nutrition coaching; Hy-Vee personalizes wellness offerings with its Smart Benefits program and Giant has created a workplace wellness program.

Walmart will offer store managers in the US stock options of up to $20,000 that will vest over three years as part of a new push to give managers a greater incentive "to act like owners and to think like owners," says Walmart US CEO John Furner, who previously served as a store manager. The new program comes on the heels of the retailer's announcement that it is raising store manager salaries and bonuses.

The retailer aims to build or convert more than 150 locations by 2029 and remodel 650 stores during the next 12 months.

Kroger has partnered with South Dallas-based Bonton Farms and South Dallas Fair Park Inner City Community Development Corporation to provide Grocery Connect -- an online grocery pickup service without fees to residents of neighborhoods in South Dallas that are considered food deserts. "It allows people a new opportunity to get that fresh nutritious food and get it affordably as well," said John Votava, Kroger corporate affairs director.

In December, U.S. consumers demonstrated resilience with a 0.7% ($133.9 billion) increase in spending, despite declining overall prices, according to the Commerce Department. The Federal Reserve's closely watched index indicated a 2.6% annual price rise, lower than the 3.4% inflation reported by the Labor Department's consumer price index. Additionally, total personal income and disposable income both saw a 0.3% increase in December, surpassing predictions. Analysts attribute the higher spending rate to rebounding consumer confidence and robust household balance sheets.

The number of people claiming for unemployment benefits in the US rose for a second consecutive week to 224K in the week ended January 27th, the highest reading since mid-November, compared to an upwardly revised 215K in the previous week and forecast of 212K.

In January 2024, US private employment increased by 107,000, falling short of expectations and the revised December figure. Wage growth slowed, with job-stayers experiencing a 5.2% increase, and job changers had a 7.2% gain, the smallest since May 2021. Despite the hiring and pay slowdowns, ADP's chief economist, Nela Richardson, highlighted progress on inflation, suggesting a positive economic outlook.

The central bank has kept rates steady with no specified timeline for cuts. This marks the fourth consecutive meeting where the overnight lending rate remains at 5.25% to 5.5%, a 22-year high. The unanimous decision cites a solidly growing economy and strong job gains, although at a moderating pace. Despite recent robust economic growth, speculations arise about potential future rate cuts.

The US 10-year Treasury yield hit a one-month low at 3.9% due to signs of a slowing labor market, increasing expectations of imminent interest rate cuts. Despite Federal Reserve Chair Powell's earlier statement ruling out a March rate cut, recent data, including higher-than-expected jobless claims and a significant rise in job cuts in January, suggests economic challenges. Powell acknowledged most policymakers' support for rate reductions later in the year but likely not in March. Investors are anxiously awaiting the upcoming jobs report, anticipating a slowdown in non-farm payrolls growth for January.

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