Inflation numbers are up. So are gas and food prices. And according to Marcus & Millichap’s “Retail Sales” brief, so is consumer spending.
Core retail sales, excluding auto and gasoline purchases, increased by 0.6% in March, while year-over-year spending grew by 4.2%.
However, consumers aren’t just throwing money around. “More households are purchasing necessity and household items in bulk to save money amid persistent inflation,” Marcus & Millichap analysts explained.
Sales were up 1% at general merchandise stores and warehouse clubs. As such, “Sam’s Club, Costco, and BJ’s Wholesale Club are plotting expansion, with each planning to open 15 to 25 new locations this year,” according to the brief. “These growth initiatives will primarily be achieved by backfilling existing spaces, a boon for single-tenant leasing activity above 100,000 square feet.”
While overall retail vacancy increased between December 2025 and March 2026, the rate remained below 5.1%. Furthermore, the vacancy for single- and multitenant spaces was at least 70 basis points below the long-term average.
There was a 21% increase in deal flow over the 12 months ending in March, compared with the previous time period, with the single-tenant segment reporting a higher gain, “indicating that the pool of investors seeking less management-intensive assets may be on the rise,” Marcus & Millichap analysts noted.
“Additionally, a broad pullback in construction will limit supply-side pressure for the remainder of this year, which should aid vacant properties in their pursuit of tenants,” the brief said.
However, the retail situation isn’t all roses. The brief cautioned that larger federal income tax returns could be what’s spurring discretionary purchases.
Then there is the Strait of Hormuz situation. While the Iran ceasefire remains in place, port blockades are still in effect, which could interfere with negotiations and keep oil prices higher. Additionally, U.S. wage growth moderated in March, rising only 0.3% year-over-year, adjusted for inflation.
“Moderate movement in the core CPI was noted last month, up 0.2%, suggesting that elevated fuel costs had yet to pass through to consumer products,” the brief noted.
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