U.S. consumers are pulling back while higher-income households keep spending, says JLL’s Jaggi

Consumer Spending Trends - Overall consumer spending is pulling back, with less money spent this year compared to last year [2] - The top 10-20% of household earners in the US are expected to spend more, while the bottom 50-70% are holding back [3] - Only 50% of US households are actively participating in the market, impacting their spending behavior [3] - Consumers are prioritizing needs over wants due to global stress factors like wars [9] Retailer Strategies and Outlook - Retailers are making real estate decisions for openings in 2027 and 2028, focusing on the long-term consumer outlook [6] - Retailers are generally bullish on the consumer in the long haul, not focusing on short-term market fluctuations [7] - Concerns about a soft job market and constant talk of tariffs are scaring consumers from spending [7][8] - Most retailers believe the US consumer will not shift heavily to online-only shopping, with roughly 84% preferring brick-and-mortar stores [10][11] Real Estate Market Dynamics - There is a historical supply shortage in retail real estate space, a problem not seen in about 40 years [11] - Current real estate space delivery is less than 40 million square feet per year, significantly lower than the 200 million plus square feet per year during the 2000s [12] - From 2010 to 2023, less than 1 billion square feet of real estate space was delivered, compared to 1 billion between 2002 and 2007 [12] - Retailers are primarily looking at second-generation space due to the lack of new development, with significant development mainly in Florida, Georgia, and Texas [13]