Report: Americans itching to get out and spend their $2 trillion in savings

One of the world’s largest commercial real estate services firms predicts herd immunity will be achieved by September, that the e-commerce/retail mix is stabilizing, and that Americans are dying to get out and spend their $2 trillion in excess savings.

Cushman & Wakefield’s recently released U.S. Retail Overview stated that stimulus payouts increased after-tax income by double digits and caused the strongest income growth ever recorded. Household wealth rose to a record high of $116.5 trillion in the third quarter of  2020, and middle- and high-income consumers are poised to get out and spend lots of it at malls, movie theaters, restaurants, and entertainment centers.

Cushman holds that consumers will resume spending at the pace of 3.7% annual growth they established prior to the pandemic, but that they’ll engage in a brick-and-mortar spending spree once herd immunity is declare--near September according to the report.

More importantly, retailers will quickly be able to adjust to stable and negotiable purchasing behavior. Online commerce rose to a record share of about 23% in 2020, but will exhibit a sharp decline when people begin massing maskless in stores again, according to Cushman, which envisions e-coms settling back down to a 20% share in 2021.

Traditional brick-and-mortar businesses continue to dominate e-commerce sales and will continue to do so using retail space to fulfill online orders in a time when industrial warehouse space is expensive and hard to find. In 2019, brick-and-mortar brands accounted for $5.8 trillion in online sales - 83% of the total - and Cushman expects them to be holding onto a 78% share in 2025.

Retail space vacancies have hit their peak in the high 12% range, predicts Cushman, and will continue to fall back into the high 10% zone in the next four years as established retailers expand. It could happen quickly as retail rents are currently down from 5% to 10% in every one of the top 60 U.S. markets.  

Cushman & Wakefield operates in 60 countries and did nearly $8 billion in business last year.