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As the 2001 recession came to an end, retail spending began a strong rebound, which
has carried into 2006. In fact, measured in terms of the volume of products purchased
and consumed, 2004 and 2005 saw growth in retail spending that was among the
strongest experienced during the last 20 years. While there may be some moderation
in the rate of growth of retail spending in 2007, there is little doubt that total consumer
spending will continue to expand.
For individual retailers, knowledge that the total amount of retail spending will continue
to grow is important, but this factor is far from the entire story they need to succeed.
Retailers are competing in a market place that continues to experience dramatic changes.
Large shifts in the number of people in the various age cohort groups have been
evolving over the last ten years and even more dramatic changes will occur over the
next decade. Where will these people live and what will they want as consumers?
In addition to the age distribution of the nation, its racial and ethnic profile is also evolving
quickly. Again, are we looking at a major shift in the types of goods that will be sought
by these groups of people and/or the retail format that these consumers prefer?
Is it possible that social mores could have an influence on what people consume? Also,
how will technology and the increasing scarcity of some resources impact retail demand?
These are subtle issues that require specialized knowledge and research techniques to
evaluate. There are, however, some basic and fundamental issues that are more tractable
to traditional research methods.
The demand for retail property space over the long term is determined by the level
and growth of retail spending and by how and where those dollars are spent. So it
is appropriate to devote some attention to establishing some of the income and
demographic parameters that will shape the amount, type, and locations of prospective
retail activity in the U.S.
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