What's Happening?
Shopping centers in the United States are increasingly leasing space to businesses offering services rather than products. This shift marks a significant change in consumer behavior, as more people prioritize experiences over material goods. According
to CoStar, a real estate analytics firm, service-oriented businesses such as salons, spas, gyms, bars, and restaurants accounted for over half of all new retail leasing in 2025. This is a notable increase from 40% fifteen years ago. Brandon Svec, CoStar's national director of US retail analytics, notes that consumer spending is firmly directed towards services, with no signs of this trend reversing.
Why It's Important?
The transition towards service-oriented retail spaces highlights a broader shift in consumer preferences, which could have lasting impacts on the retail industry. As consumers increasingly value experiences, traditional retail stores may need to adapt by incorporating more service elements to attract foot traffic. This trend could also influence real estate development, as malls and shopping centers might prioritize leasing to service-based businesses. The shift could lead to economic benefits for service industries, potentially creating more jobs and stimulating local economies. However, it may also challenge traditional retail stores to innovate and remain competitive.
