Terrence Hart, Senior Director of Retail Leasing for Franklin Street’s Orlando office, recently shared his thoughts on national retail trends to watch out for in 2018 and their impact on Florida retailers.
What are your market predictions for 2018?
Hart: We will see the continued decline of Target, JC Penney, Bealls, Kohl’s, Macy’s and other large-format, soft goods retailers, except for Walmart. Walmart has made strides in reaching the consumers at home, thanks to the acquisition of Jet.com and other efforts to mirror Amazon’s success.
Restaurants and experiential concepts, like gyms and family entertainment centers, should expect a continued increase in sales. However, they will start to feel the headwinds of an overheated retail market and rising costs of goods sold, including higher labor costs and eroding profit margins. We will see “middle of the road,” sit-down restaurants evolve into more fast-casual or delivery-friendly concepts. We will also witness the failure of some of the old staple restaurant groups who do not evolve quick enough in 2018.
How will these changes affect Central Florida’s retail landscape?
Hart: Central Florida qualifies as a market anomaly because of our 68 million annual visitors and their incredible economic impact. Orlando is also going to enjoy a strong financial injection from the influx of Puerto Rican migration that will likely impact us more than any other city in the U.S. Orlando’s retail market growth should exceed most other national MSAs over the next two years.
Overall, Florida has a solid economic foundation with tourism, development, technology, medical, education, and military training simulation contracts to keep creating jobs. Florida will continue its net positive population growth thanks to our great weather, low cost of living, and the lack of a state income tax.
