What will happen with retailers in 2010?

Retail sales from the holidays will set the tone for next year but a number of other factors will drive growth in the retail sector. First is the continued problem of getting a commercial loan or paying on those loans that a retailer already has. No significant retail construction is likely to happen until 2011. Retailers are holding onto their cash and trying to build some reserves. By mid-2010, property may be purchased but for the most part, construction next year will be in remodeling of existing storefronts.



Closures near normal

Retail stores will close next year but the rate of closures won't be more than in years past. In 2009, the store closings were expected to hit 10,000. But just under 4,800 retail stores will have closed this year. That number is similar to 2006 when the market was very strong.

A number of stores plan to expand next year. Stores such as Target, Kohl's, Costco and Walmart have modest plans to grow. Those who have no plans to grow next year will work on their Internet sales, hoping to cash in on convenience shoppers.



Slowed by housing slump

The types of retail stores that remain in trouble are home goods and furniture stores that rely on a recovering housing market that still is very depressed.

So 2010 will be a quiet year for retailers as they wait for consumers to find their way back to the stores. I think that retailers are cautiously optimistic about 2010 and, barring a national disaster or extremely bad weather, retailers will find 2010 to be a much kinder year than the crash of 2008 and even kinder than the slow climb out of the recession that occurred this year. Be sure to watch jobs reports to get a good sense of when retail sales will grow in 2010. That will be a key indicator for sales tax growth.

Even if a few retail stores are expanding their physical space next year, it won't help forecast significant increases in retail sales. That will depend upon consumer spending from both regular and new customers.



Jan Teague is president/CEO of the Washington Retail Association.