I ran across this piece about Wal-Mart cutting expansion plans in 2009 because the world’s largest retailer has too many stores "amid a weakening U.S economic environment." And if Wal-Mart has too many stores, what about the rest of the retailing world? And what does that mean for us, given that every developer in the phone book wants to build more retail in our part of Dallas over the next couple of years?
Turns out Wal-Mart isn’t the only company that feels that way. So does the J Crew CEO, who said there were too many stores and too many choices in U.S. retail today. So does the new CEO of Crate & Barrel.
The second Wal-Mart link, from Slate, is a bit over the top, but it does contain this interesting piece of information: "In the fourth quarter of 2007, the national retail-vacancy rate rose for the 11th straight quarter to 7.5 percent, the highest level since 1996, according to research firm Reis Inc. With new projects coming online — 34 million square feet of retail space will be completed in 2008 —the rate is expected to climb further to 8 percent. In the parlance of the trade, many chains are simply over-stored."
So what’s going to happen at Timbercreek or at the Town Center? Wamre, who worked in commercial real estate before and during the early 1990s downturn, has written that we may have to accept what’s called cannibalization to fill all of these new storefronts — or, at least until the market firms. That is, the new developments will take businesses out of existing strip malls and shopping centers, so we won’t necessarily see a net gain in retail.
Will that be an improvement? Your guess is as good as mine.
