The retail landscape in April 2026 is being shaped by two forces pulling in opposite directions: a headline-grabbing oil shock driving inflation and consumer anxiety, and an underlying resilience in core retail spending that continues to reward well-positioned shopping centers. For owners, brokers, and operators of retail real estate — particularly in the New York metro area where I spend most of my time — understanding how these forces are reshaping tenant demand is critical to making smart decisions over the next 12 to 24 months.

The Fed Holds the Line, but the Oil Shock Is Real

The March CPI print came in hot — 0.9% month-over-month, pushing annual inflation back up to 3.3%. The driver is almost entirely energy: gasoline jumped 21.2% in a single month, the largest monthly gain in the nearly 60 years these numbers have been tracked. The trigger, of course, is the closure of the Strait of Hormuz and the continued friction with Iran.

What I find noteworthy as a real estate professional is what didn’t move. Long-term rates held steady, natural gas prices actually declined 0.9% on the month thanks to strong domestic production, and forward inflation expectations — the five-year, five-year forward measure the Fed watches closely — are still drifting down. Markets are treating this as a temporary price shock rather than the start of a sustained inflation regime, and the Fed’s projections still point to at least one rate cut later in 2026.

For shopping center owners sitting on floating-rate debt or refinancing in the next 18 months, this is modestly encouraging news. We’re not out of the woods, but we’re also not watching a repeat of the 2022–2023 rate spiral. Our own Whitestone Shopping Center acquisition and other BTF Capital projects have been underwritten with this view in mind.

Consumer Sentiment Collapses — but Spending Holds Up

Here’s the paradox that defines this market. Consumer sentiment in the University of Michigan’s April preliminary survey dropped to 47.6 — the lowest reading in the 70-plus-year history of the index. Consumers are blaming the Iran conflict squarely for their anxiety, and year-ahead inflation expectations jumped a full point to 4.8%.

Yet retail sales keep growing. The CNBC/Retail Monitor showed core retail sales up 0.41% month-over-month in March and 7.05% year-over-year — the sixth straight month of gains. Tax refund season is helping; a RetailMeNot survey found 52% of consumers are using refunds to pay down debt or bills, while another 24% are spending it on everyday expenses. Put simply: consumers feel terrible, but they’re still shopping.

This is a pattern I’ve seen in prior cycles. Sentiment surveys capture mood; sales data captures behavior. The two can diverge for extended periods, and the retailers who continue to execute through sentiment downturns tend to emerge stronger. It’s why I remain constructive on well-located, necessity-anchored centers even in this noisy environment.

Grocery & Necessity Retail: Still the Best Real Estate in America

Supermarket-anchored centers remain the most defensible asset class in retail, and the news flow this month reinforces why. Publix is pushing aggressively into Kentucky — three new stores announced in Richmond, Versailles, and Bowling Green, each roughly 55,000 square feet with a Publix Liquors component. By year-end, Publix expects to operate around a dozen stores in the state, directly challenging Kroger in its home market.

Aldi, meanwhile, is piloting a new modular store format in the U.S. designed to be adapted across different building types — a sign the discounter is preparing for another wave of expansion with more flexibility on footprint. Publix in the Southeast, Aldi nationally, and in our market Whole Foods, ShopRite, Stop & Shop, Lidl, Trader Joe’s, and H Mart continue to drive leasing velocity at supermarket-anchored centers.

Albertsons reported a messy quarter, swinging to a $480 million loss on a $774 million opioid settlement charge — but net sales still grew to $20.3 billion from $18.8 billion year-over-year. The underlying grocery business is performing; the legal overhang was largely known.

The NYC Grocery Wildcard

Closer to home, Mayor Mamdani’s announcement of a city-run grocery store at La Marqueta in East Harlem, targeted for late 2027, is a political project more than a retail one — but it’s worth watching. A single municipal store in an underserved corridor is unlikely to shift the competitive dynamics in the five boroughs. But if the experiment expands, it could introduce a new variable into how retail planning boards and elected officials think about food access in our market.

Where the Leasing Opportunities Are Emerging

Small-Format & Modular Expansion

Ikea Canada is opening a 43,000-square-foot small-format store in London, Ontario — about one-fifth the size of its full-line Burlington location. This is the template we’re going to see more of from big-box operators: major brands downsizing footprints to access infill and secondary markets without the capital demands of a traditional store. For shopping center owners, this opens up tenant prospects that were previously out of reach for mid-box boxes in the 35,000-to-50,000 square foot range.

DTC Brands Going Physical

Povison, a direct-to-consumer mid-century modern furniture brand, just signed a five-year lease for 6,800 square feet in West Hollywood — its first permanent physical store. This follows the familiar DTC-to-brick-and-mortar playbook (Warby Parker, Allbirds, Casper, etc.) and it’s a trend we’re actively working with in our leasing practice. The lesson: successful DTC brands eventually need physical retail to scale, and they tend to prefer curated, higher-quality shopping environments over generic strip centers.

Restaurants: Selective Expansion, Selective Retrenchment

The restaurant picture is bifurcated. KFC’s Saucy concept is expanding to Texas, Freddy’s opened its first military base location, and Church’s Texas Chicken signed a massive 600-unit development deal for China. At the same time, Mo’Bettahs just closed all five of its Kansas City locations, and MTY’s Papa Murphy’s continues to struggle — systemwide sales down 3% in 2025 with nearly 20% fewer units than a decade ago.

The takeaway for landlords: focus tenant committees on concepts with strong unit economics and a clear growth plan. The fast-casual category remains strong, but legacy concepts without differentiation are closing doors.

Home Improvement & Essentials

Home Depot acquired Simpl Automation outright after piloting the technology at its Locust Grove distribution center — a clear signal that the big-box home improvement category is doubling down on logistics infrastructure rather than aggressive store expansion. Walmart, by contrast, announced plans to remodel 650-plus supercenters and Neighborhood Markets in 2026 and open approximately 20 new stores through early 2027. For well-located junior box and outparcel spaces near Walmart anchors, this is positive; remodeled boxes drive more traffic to adjacent retail.

Batteries Plus sold 14 new units in Q1 alone and has more than 800 locations in the pipeline — a useful tenant for in-line space in the 1,500-to-2,500 square foot range that many centers need to fill.

The Shakeout: QVC and Macy’s

Two notable negative headlines this cycle. QVC Group — parent of QVC, HSN, Ballard Designs, Frontgate, and Grandin Road — announced it’s preparing for a Chapter 11 filing within 90 days, with $6.6 billion in outstanding debt and 2025 net revenue down nearly 8%. QVC’s footprint is primarily broadcast and e-commerce rather than brick-and-mortar, so the retail real estate exposure is limited, but the broader signal about legacy home-goods demand is worth noting.

Macy’s is closing another 16 stores as part of its “Bold New Chapter” plan to shutter 150 underproductive namesake locations by the end of 2026. The company closed 66 in 2025. For mall and power-center owners with Macy’s exposure, the co-tenancy and redevelopment implications are well understood at this point — but the pace of closures is a reminder that the department store category continues to contract, and replacement anchor strategies remain critical.

Two Structural Trends Every Landlord Should Be Watching

1. AI-Driven Commerce Is Accelerating Fast

Adobe reported that AI-source traffic to U.S. retail sites grew 393% year-over-year in Q1 2026, continuing a trend from the holiday season when AI traffic was up 693%. A Clutch survey found 79% of AI chatbot users are now using Google less, and 32% are turning to AI first for information. Yet a Quad survey shows only 39% of consumers trust AI agents to make everyday purchases on their behalf, and 75% would trust a brand less if they knew it paid to influence AI recommendations.

What this means for physical retail: AI search is rapidly becoming a primary consumer discovery channel, but the trust gap means physical stores and experiential retail are more important than ever as the validation layer. Tenants with strong omnichannel presence and authentic brand trust will outperform. Landlords curating tenant mix should weigh brand durability and customer loyalty heavily — those are the tenants that translate AI-driven discovery into in-store traffic.

2. Local and Independent Spending Is Real Money

An OnDeck survey this month found that the average American spends $11,740 per year at local stores — 20.7% of total shopping budgets. Nearly half of shoppers say they buy local to support the local economy, and 42% cite unique product selection. For neighborhood shopping centers, this is a tailwind. Well-curated centers that blend national credit tenants with strong local operators — a bakery, a pilates studio, an independent wine shop, a chef-driven quick-casual — are exactly what consumers are telling us they want.

If you’re evaluating a retail acquisition, working through a lease renewal, or thinking about how to reposition an underperforming asset, my team and I would welcome the conversation. The market is more nuanced than the headlines suggest — and that’s where experienced retail brokerage adds the most value.