Retail Seen Focusing on Re-Leasing, Service Growth and “Barbell Spenders”

In its latest report on retail market dynamics, advisory company JLL identified a trio of trends expected to play out in the coming year. They are:

• Steady occupancy, choppy demand. The retail real estate sector in the fourth quarter of 2025 reflected a still-tight market, with vacancy in the low-4% range, asking rents still rising and positive net absorption. However, 2025 overall looked more like a normalization period, with absorption just above flat levels. For 2026, leasing should continue, yet quarterly performance may vary as retailers stay selective and activity remains concentrated in re-leasing and backfilling existing space rather than new development.
• Experience + essentials outperform. This is a continuing shift, as service tenants take more space than traditional goods retailers, with fitness, QSR and other service-driven concepts leading. In 2026, the centers that win are the ones that feel useful and habit-forming: Grocery-adjacent, wellness, food, personal care, off-price. The more a property leans on commodity soft goods, the more it may have to work for demand.
• The “barbell” consumer takes over. The macro picture points to a K-shaped consumer: higher-income households supported by asset gains, lower-income households relying more on credit with elevated delinquencies, and moderating labor conditions. In 2026, this likely translates to “barbell” spending patterns—value and premium/experience segments holding up better, while mid-market retailers face greater pressure.

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