State of Retail

Q3 2023

Madison Marquette's State of Retail Q3 2023 presents our top 5 Retail Predictions for 2023 and an overview of retail's transformation, shifting consumer behaviors and category trends. The content is from a formal presentation given by Madison Marquette's Head of Retail Research, Meghann Martindale. The information will be updated periodically and a recap of results will be published in the fourth quarter. ​

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5 Retail Predictions for 2023

Retail proved resilient through the pandemic and will continue to evolve in the post-pandemic era with ongoing digital transformation, hybridization and the ability to turn further disruption into opportunity in the face of economic uncertainty.

Financial positions create divergent consumer spending behaviors.

Physical stores serve as digital billboards in the hybridization of retail.

Retailers focus on the path to profitability to secure stability and future growth.

Digital transformation shifts focus from customer-centric to operational efficiency.

Retail cycles from apocalypse to the favored sector among investors.

Source: Madison Marquette Retail Services, February 2023

1. ​ Divergent consumer spending

Shifting financial positions will create divergent spending behaviors.


  • Record, pandemic-era savings being exhausted
  • Consumer credit utilization risk (including BNPL)
  • Discretionary spending shifts again from want to need
  • "Richcession" - earning less, spending more
  • Mitigated by a tight labor market

Source: WSJ, Goldman Sachs

2023 Retail Sales Through Q2

Inflation cooled in the first half of 2023 while economic uncertainty prevailed and consumers moderated spending. After wild category swings during the pandemic, retail sales have normalized and are roughly in line with 2018 sales growth across every category.

Source: US Census Bureau, MARTS

2. ​ Physical stores serve as digital billboards

In addition to omnichannel fulfillment hubs and experience centers, physical stores now serve as digital billboards.


  • Role and value of the store reinforced
  • Experiences change perception and loyalty
  • Beyond digital signage
  • Immersion, engagement, data collection and convenience

Source: Nike, Leap, Steve Dennis

3. ​ Retailers focus on the path to profitability

Contraction and recalibration may be necessary to secure stability and future growth following the pandemic boom.


  • Profitability over growth in 2023
  • Competitive advantages and market share
  • Capital sourcing and flexibility in rising rate environment
  • Convert a one-time buyer into a loyal shopper
  • Can't get ahead of shifting behaviors, but can meet with technology

Source: LionTree, Steve Dennis

4. ​ Digital transformation to increase profitability

Consumer-centric technology will be paramount to protect the customer experience and capture sales, but retailers will shift tech stack investments to operational efficiency to increase profitability.


  • Harmonized channels with immersive digital experiences
  • Logistics as the new customer experience
  • Personalization and data privacy in Conversational Commerce


  • Enterprise inventory visibility and management
  • AI, automation, and empowered employees
  • Combatting online fraud and in-store theft with computer vision

Source: McKinsey, NRF, DevPro Journal

5. ​ From retail apocalypse to the favored sector

Deal volume fell in 2H 2022 across all sectors, but retail was the only sector to post annual growth. Retail investment will outpace other sectors in 2H 2023 as rates normalize and the market recalibrates.


  • Surplus absorption feeding stable occupancy and record low vacancy rates
  • Regional strength driving solid rent growth across the U.S.
  • Store openings across broad categories outpacing store closures
  • Diversification of revenue streams growing NOI

Source: MSCI Real Capital Analytics, Datex Property Solutions

click to Explore More in-depth retail trends for 2023

Madison Marquette is a full-service commercial real estate company operating across the U.S. As a trusted service provider, investment manager, operator, and developer, we create and execute strategies that maximize value and mitigate risk for clients and assets spanning a wide range of property types.

Please contact us to learn more about Madison Marquette's Retail Services, Research and Thought Leadership.

Meghann Martindale

Head of Retail Research

Meghann Martindale is responsible for Madison Marquette's retail research and thought leadership platform. She provides practical application of her research, data, trends analyses, and predictive analytics to portfolio optimization and value creation from over 20 years of vast experience in retail real estate. Meghann is an active member of ICSC's North American Research Group and leads the Thought Leadership Committee. She served as an Adjunct Professor and is a frequent guest lecturer at NYU's Shack Institute of Real Estate.


The information and opinions in this presentation have been prepared in good faith based on Madison Marquette’s current views and subjective analyses of the commercial real-estate market. Although we believe our views to be an accurate reflection of market conditions on the date of this presentation, they are subject to significant uncertainties, contingencies, and macroeconomic fluctuations out of our control. Madison Marquette has no obligation to update its views if actual market conditions in the future cause our current opinions, projections, analyses, or thought leadership to change or later be incorrect.

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