Strolling the AGORA By Murray Shor

Lemme me know if this scenario sounds at all familiar. A retailer announces it will open, say, 50 stores the following year. Then its sales over the holiday season jump 20% over the previous year’s results and its same store sales are up 6%. Immediately after the numbers are in, said chain takes another look at its expansion plans and now says it will increase the number of new stores opening the following year to 75.

The other side of the coin, of course, is if the financials are not positive, the tenant is just as likely to cut back on its first projections on plans for new outlets for the next year.

So, based on historic precedent, how we’ve operated most of the time I’ve been a part of “our thing,” one would expect that 2010 would be a decent year for many dealmakers in the shopping center/retail industry, both landlords and tenants. Though by no means an across-the-board record breaker, this past holiday season was substantially better than expected for those looking at total sales and comparing same store sales.

However, concerning the second part of the scenario—increased expansion—it’s not gonna happen, unless there is a strong uptick within the next couple of months.

For one, same store sales for many retailers may be up over last year’s, but we’re comparing these numbers with those of a very down period. Then, in order to drive shoppers into the stores, retailers resorted to deep discounts, which for many did not translate into big profits. Many were content to increase their market share, with hopes that this will carry over to improved sales for the coming year.

And even if the top merchandisers were underwhelmed, it’s gonna have some impact.

C’mon, when even Wal Mart says it is closing Sam’s Club stores, it does attract attention and cause a slight clouding of many crystal balls— and dilute the rosy glow in the eyeglasses of experienced forecasters.

Perhaps the most telling, after analyzing some of the sales results, is that consumers are nervous because of the depressing job market and still rising unemployment numbers. They identify with those checking the want ads and wondering if they may be next. They may bend a little here and there, but essentially they are opening purses and wallets for basics, value-oriented merchandise, and definitely not for luxury items—check out the numbers for high-end jewelry, Neiman Marcus, Saks 5^th, Bergdorf, which either show a decline or a rise only when compared with the severe drop in 2008.

Of course if you’re one of those Wall Street bankers with the million-plus bonuses, forget everything above and below these comments.

If shoppers don’t buy, registers don’t ring, retailers don’t expand, landlords don’t build—or raise rent rates. Result, it won’t be a great year for dealmaking and leasing.

Which is not to say there won’t be some activity taking place, and I’m not referring only to renewals, re-negotiating leases, or replacing the many vacant stores with other tenants who are paying a lower rent than their predecessor.

The categories that are planning to open the largest number of new units are the dollar stores, discounters, fast-food and low-end restaurants, supermarkets, drug stores and other chains that benefit immediately from a rising population; consumers must still eat, must still go out, must replace worn out apparel, must still be entertained—only more carefully.

Though most of this growth is directed toward the low-end of shopping centers, with some discounters raising the quality of their merchandise because vendors to better stores are also selling to them, a small portion of their new stores will be in malls they normally would avoid. The rents are low, the demographics are good, and savvy shoppers can buy private label merchandise at discounted prices.

And to many who focus on predicting attitudes, the disparity between reality and illusion, and what is and will take place in the marketplace—the agora if you will—it could be a long haul before shoppers return to instant gratification over a more conservative use of their disposable income. They are still nervous about jobs.

New stores and new shopping centers are not likely to feed a renewed appetite for mass consumption, at least not in 2010. So it will be much like last year for most dealmakers: working a lot harder, a lot smarter, and getting a lot less.

In the long run, however, with all projections showing a future rise in population, and a need for food, apparel, and the like, the industry will continue to expand.