Market snapshot: Retail (part one)

Retail overview

• In this post, we will focus on the retail category of construction, comprising buildings and structures primarily used by food and beverage and general merchandise retailers as well as shopping centers, malls, and other commercial establishments.
• The market size for retail engineering and construction projects in 2022 reached nearly $42 billion and is trending towards $44 billion at the end of 2023.

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  Retail design and construction trends. Courtesy: Morrissey Goodale

Outlook

• Higher interest rates have forced owners and developers to postpone or cancel many commercial and retail projects in 2023.
• The retail sector’s growth slowed in 2023 but is expected to show strength and resilience next year as a majority of U.S. consumers feel optimistic about their finances, according to GlobalData.
• Online sales continue to rise and significantly impact the retail sector. A significant portion of investments within retail will be focused on omnichannel strategies, which increase touchpoints with consumers through in-store and digital channels.
• Online retail sales currently represent 15.6% of total sales and are expected to surpass 20% by 2027.
• According to a research report from Colliers, 47% of retailers plan to further establish their footprint in 2024. Additionally, about 41% intend to invest in automation within stores.

Hot spots

• Fast-growing cities, primarily in the Southeast and Rocky Mountain regions.
• Metro areas with high employment and concentration of surveying professionals: Houston, Denver, Raleigh and Atlanta.

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