Keeping an eye on the U.S. consumer, retail behavior, and what it means for strip center owners and investors.

Retail real estate doesn’t move in isolation.
It moves with the consumer, with retailer strategy, and with capital discipline.

This week’s data reinforces a familiar—but increasingly important—theme:
things are improving, but they are not loosening.

Here’s what stood out.

Consumer sentiment is ticking higher, but context matters.¹

According to the University of Michigan, consumer confidence reached a four-month high in January. That’s a positive shift—but sentiment remains roughly 25% below last year’s levels. Younger consumers are feeling slightly better about their personal finances, while job security remains a key concern across the workforce.

One encouraging signal: inflation expectations are easing. Consumers now expect prices to rise about 4.2% over the next year, the lowest reading in nearly a year. That matters, because expectations often shape real behavior.

Bottom line: people feel a little better—but they are still cautious and intentional.

Spending patterns are changing, not disappearing.²

Bank of America’s aggregated card data shows spending per household is still rising—but largely due to higher prices, not higher volume. Transaction counts actually declined, with households making fewer purchases overall.

Higher-income consumers continue to drive most of the growth, while lower-income households are tightening up and favoring smaller-ticket items. Categories like travel and electronics softened, while restaurants and apparel saw gains.

Bottom line: the consumer is splitting into two realities—one value-driven, one still spending selectively at the top.

Inflation cooled, but rent and food are still doing the heavy lifting.³

December CPI came in at 2.7% year-over-year, with shelter and food as the biggest drivers. Rent and housing costs rose 3.2% annually, and grocery prices remain elevated despite some relief in individual items.

The good news: wages are largely keeping pace, and real purchasing power is modestly positive over the past year.

Bottom line: the cost of living continues to creep higher, especially in necessities, which keeps consumers selective.

Artificial intelligence is becoming structural, not optional.⁴

Retailers are increasingly using AI for demand forecasting, pricing, inventory control, and personalized marketing. This isn’t about novelty—it’s about efficiency and profitability.

For retail real estate, that has real implications:

The gap between real estate that works and real estate that merely exists is widening.

Value grocery continues to expand.⁵

Aldi announced plans to open 180 new U.S. stores this year, reinforcing grocery’s role as one of the most durable retail categories.

This expansion reflects:

For strip centers, this is another reminder that value-oriented anchors support long-term stability and tenant velocity.

Restaurants are still a traffic engine—but only when done right.⁶

TGI Fridays unveiled a long-term plan targeting 1,000 locations globally by 2030. This isn’t a sign that casual dining suddenly became easy again—it’s a signal that brands are working hard to rebuild relevance through experience, format flexibility, and controlled environments.

Food remains one of the strongest traffic drivers in retail, but it is also operationally fragile. Success increasingly depends on:

To start the year, I’ve been working on multiple broker opinions of value and pricing analyses. Many owners who paused over the last year or two are now re-engaging—trying to understand where values actually sit today and whether this is the year to act.

On the tenant side, growth continues:

The takeaway is simple: retailers are still growing, owners are re-evaluating strategy, and planning is becoming more important than waiting.

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One belief I see often is this:
“Buy and hold always wins.”

Historically, buy-and-hold ownership has worked.
But it only works if performance is measured along the way.

Two owners can hold properties for the same length of time and end up with very different outcomes:

When you compare those paths using IRR, the difference can be meaningful—even if both “held” the asset.

The better belief:
Buy, hold, and measure wins.

Not fear.
Not constant trading.
Just curiosity about whether your capital is actually working as hard as it could be.

That’s how disciplined owners quietly win across cycles.

Retail real estate in 2026 isn’t about guessing what’s next.
It’s about understanding what’s changing—and staying engaged enough to respond intentionally.

If you want help thinking through value, leasing, or long-term strategy for your property, you’re more than welcome to reach out. I’d be ecstatic to bring you something of value.

— Ray

If you want a clearer understanding of where your strip center stands today — or what opportunities you might be missing — feel free to reach out.

I’d be more than happy to walk through it with you.

Thanks for reading. You’re always welcome to reach out with any questions or anything you need to better understand your investment. I’m here to help you make well-informed decisions with confidence.

— Ray Kang CCIM

Strip Center Investment Sales & Advisory

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