Key themes emerged in an increasingly resilient – but complex – US retail sector, according to a new report from real estate services firm, Colliers. While new retail construction remains stalled, consumer behavior continues to have a significant influence on retailers, as shoppers prioritize value more than ever before. And instead of cannibalizing each other, physical stores and e-commerce are becoming a strong force in the ever-changing retail sector.
Developers Eye Economic Uncertainty Amid Dwindling Space
New retail construction remained historically low in 2025, creating a “space crunch” and driving developers to tread cautiously amid elevated financing costs and economic uncertainty.
"We’re witnessing a fundamental transformation in US retail real estate,” says Anjee Solanki, Colliers’ national director of retail services and practice groups. “The old playbook of building new space is giving way to strategic repositioning of existing assets, while retailers are learning that omnichannel isn't optional—it’s survival.”
Solanki notes that construction costs have further limited speculative development, especially for standalone retail, as opportunity costs in multifamily, industrial and mixed-use projects prove more attractive.
National vacancy has remained stable standing at 4.3% at the end of the third quarter of 2025and store closures representing 123.7 million square feet hit the market. Meanwhile, annual deliveries are expected to remain under 30 million square feet in 2025 and 2026. Developers and retailers will likely focus on repositioning existing assets and redeveloping former tenant boxes to meet demand.
Consumer Behavior Drives Retail’s Value Strategies
Economic and trade uncertainty is driving some consumer groups to dial back their spending and adopt highly selective behaviors to stretch their budgets.
“Currently, much of the spending power is coming from high-income households, while middle- and lower-income groups are showing signs of pullback,” says Solanki. She adds that value-driven retailers are attracting budget-conscious shoppers on one side, and premium and luxury players are benefiting from resilient high-income spending on the other.
Colliers reports that retailers that emphasize affordability through private labels, bundles and promotional value – or those that can capture affluent spending with a straightforward proposition – will be best positioned to maintain momentum in a cost-conscious environment.
Brick and Mortar Remains Strong, Complements E-commerce
According to Solanki, another highlight of the current market is that e-commerce and physical stores remain increasingly intertwined due to omnichannel strategies like in-store pick-up driving convenience and loyalty.
“The integration of digital and physical experiences has become a defining competitive advantage, all while underscoring the enduring strength of physical retail,” says Solanki, adding that 33.7% of purchases happen online, but physical stores still drive 84% of sales.
And while the upcoming holiday season will be a critical test of consumer resilience, Solanki notes that value-driven shopping, vigorous e-commerce activity and a rise in resale will ultimately shape holiday performance.
“The key risks to the outlook remain tariffs, inflation and labor market uncertainty, which could weigh on consumer confidence and discretionary spending in late 2025. But we believe the US retail sector will remain stable amid intensifying macroeconomic pressures.”
Visit Colliers at ICSC NEW YORK, booth 2835 on level 3.
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