WHITE PAPER

APRIL 2002
Introduction
and Technical
Note: The
Transition from
SIC to NAICS
2001 U.S. RETAIL
2001 Total
Retail Sales and
SALES, MALL
Shopping SALES, AND
Center-Inclined
Sales Results DEPARTMENT
2001 Sales by
STORE SALES
Store Type REVIEW
The Long View:
Retail Sales
from 1992 to
2001 Written by Dougal M. Casey
Edited by Michael Baker &
2001 Mall Sales Jean Lambert
2001
Department
Store Sales

INTERNATIONAL COUNCIL OF
SHOPPING CENTERS
Introductory Note

This white paper is a preliminary overview of year 2001 U.S. retail sales, mall sales and department
store sales results. Additional data from the U.S. Census Bureau, due later this year, will enable us to
draw a more definitive picture of what happened in 2001; in the meantime, the following pages
provide an early summary of available data. We combine data from three sources: the Census
Bureaus Monthly Retail Trade Survey, ICSCs Monthly Mall Merchandise Index and ICSCs
Monthly Department Store Sales Report. These three sources enable us to present summary
information on 2001s total retail sales, shopping center-inclined retail store sales, per-square-foot
mall sales, and department store sales. These sales figures are presented under one cover in order to
provide an overview, not to encourage direct comparison between the Census and ICSC numbers.
Indeed, conceptual differencesespecially the fact that Census numbers are based on total sales
volume while ICSCs Monthly Mall Merchandise Index figures are based on sales per square foot
mean that the data sets should only be compared with caution.

A technical note: 2001 marked the year that the Census Bureau moved from presenting its Monthly
Retail Trade Survey results in a format which groups stores by Standard Industrial Classification
(SIC) Code to a format which groups them by the North American Industrial Classification System
(NAICS).

The changes resulting from this switch are minorand discussed on Page 5 of this White Paperbut
include a couple of items of note:

1. Analysis of 2000 sales data as reported under both classification systems indicates that total retail
sales under NAICS are 4.5% higher than under the SIC classification.
2. The sales of the Building Materials & Supplies store groupa key part of Shopping-Center
Inclined Storesare 50.6% higher than under the SIC system due to the Bureaus inclusion (under
NAICS) of an All Other Building Materials Dealers store group, which detailed 1997 Census of
Retail data indicate a) registered $80 billion in sales in 1997; b) accounted for 36% of sales in the
total Building Materials store group (SIC 52); and c) are principally wholesalers, not retailers.
Data in this White Paper will be adjusted to exclude this sub-group of stores from the Shopping-
Center Inclined Stores grouping.
3. Jewelry stores and luggage have been moved by the Bureau from Other Shopper Goods (the O
in GAFO) to Clothing & Clothing Accessories. This White Paper will adjust the Bureaus data to
move them back to Other Shoppers Goods.
4. The Census Bureaus NAICS data group discount superstores (i.e. discount department stores
incorporating groceries) with warehouse clubs. Some key industry analysts believe strongly that
the superstores more properly belong with the Discount or Mass Merchandise Store group. The
data utilized in this White Paper do not permit that adjustment.
5. About $80 billion of year 2000 discount department stores sales have been moved to the
Warehouse Clubs & Superstores and Miscellaneous General Merchandise Stores groups.

2
Total Retail Sales, 2000-2001 (Census Bureau)

Sales in all U.S. retail and food service establishments grew from $3.389 trillion in 2000 to $3.504 trillion in 2001, an
increase of $115 billion, or 3.4%. (See Table 1).

Shopping-Center Inclined Stores (stores that rely on shopping centers for most of their sales, namely:

general merchandise stores, including department stores,

furniture and home furnishings stores,
apparel and accessories stores,
other shoppers goods stores, like jewelry stores, sporting goods stores, and book stores,
grocery stores and smaller food stores
drug stores, and
home improvement stores, including hardware stores)

increased their sales by $60 billion, to $1.714 trilliona gain of 3.6%. These stores registered about 49% of the
nations 2001 retail sales (slightly higher than in 2000) and captured about 52% of the nations total year 2001 retail
sales growth.

Table 1. ESTIMATED U.S. RETAIL SALES 2000-2001

(Billions of Dollars)
2000-2001 Share of
Store Type Sales Sales
Sales Gain Sales Gain
2000 2001 Amount
(In Billions) (In Billions) (In Billions) Percent Percent
Shopping Center-Inclined:
GAFO $878 $899 $21 2.4% 18%
Convenience
Food $465 $481 $16 3.4% 14%
Drug 134 147 13 9.7 11
Subtotal $599 $628 $29 4.8% 25%
Home Improvement/
Building Materials $177 $187 $10 5.6% 9%
Shopping Center-
Inclined Subtotal $1,654 $1,714 $60 3.6% 52%
Non-store retailers $162 $155 -$7 -4.7% -6%
Automotive 832 878 46 5.5 40
Gas Stations 244 238 -6 -2.5 -5
Food Service 306 321 15 4.9 13
All Other 191 198 7 3.7 6
Total $3,389 $3,504 $115 3.4% 100%
Note: Some figures are slightly rounded
Source: U.S. Census Bureau and D. Casey

The reader should note that the conversion from the SIC system to the NAICS system entails some shifting of smaller
store types to new groupings. To clarify GAFO store sales figures for 2001 and 2000, a detailed GAFO store type and
sales listing is presented in Table 2, as follows:

3
 Table 2. GAFO STORE SALES 2000-2001
(Billions of Dollars)
Classifications Store Type 2000 2001
G 452 General Merchandise (including leased depts.) $412 $423
A 448 Apparel & Accessories 141 143
(less 4483 Jewelry,
44832 Luggage)
F 442 Furniture & Home Furnishings 92 92
443 Electronics & Appliances 88 88
Subtotal $180 $180
GAF Subtotal $733 $740

O 45111 Sporting Goods $27 $30

45112 Hobby, Toy and Game (c/Music) 37 40
45113 Sewing & Needlework 4 4
45114 Musical Instrument (45112) (45112)
45121 Bookstores 16 17
45122 Tape, Disc & Record (45112) (45112)
4532 (33% of 453) Stationery, Gift & Office Supplies 34 34
4483 Jewelry 25 25
44832 Luggage 2 2
O Subtotal $145 $153
GAFO TOTAL $878 $899
Note: Sales figures for Gift & Novelty stores and Sewing & Needlework stores are estimates
based on detailed NAICS data from the 1997 Census of Retail Trade.
Source: U.S. Census Bureau

Within the Shopping-Center Inclined Stores group, GAFO stores (General Merchandise, Apparel & Accessories,
Furniture & Furnishings, and Other GAFO stores) collectively achieved 2.4% sales growth, led by the Discount
Department Stores, Warehouse Clubs and Superstores in the General Merchandise Stores category (+2.7%). (See
Table 3.) The Apparel & Accessories Stores group achieved a 1.3% sales increase (Table 3). The Home Improvement
Stores group recorded sales growth of 5.6%, and the Furniture & Furnishings Stores (which includes consumer
electronics) groups sales were flat.

Further along in the Shopping-Center Inclined Stores group, among Convenience Stores (that is, grocery stores, other
food stores, and drug stores), Grocery Stores recorded 3.1% sales growth and Drug Stores had another strong year,
achieving 9.7% sales growth (Table 3). (Please note that the year-end 2001 percent change estimates reported by the
Census Bureau are subject to revision in the Bureaus Revised Monthly Retail Trade Survey, due out late this spring and
in the Bureaus Benchmark Report for Retail Trade, to be published this summer.)

4
 Table 3. ESTIMATED U.S. RETAIL SALES BY STORE TYPE 2000-2001
(Billions of Dollars)
Actual Estimated Percent Change
Store Type
2000 2001 2000-2001
GAFO
General Merchandise
Department Stores
Conventional & National Chain $101 $96 -5.5%
Discount 141 146 3.4
Subtotal $242 $242 -
Warehouse Clubs & Superstores $137 $143 4.5%
Misc. GM Stores, inc. Variety Stores 33 38 15.2
GM Subtotal $412 $423 2.7%
Apparel & Accessories
Womens Ready to Wear $32 $31 -2.4%
Mens & Boys 11 10 -1.8
Family Clothing 57 58 1.7
Shoes 22 22 -0.9
Special & Other 19 22 10.2
A & A Subtotal $141 $143 1.3%
Furniture & Furnishings
Furniture $50 $50 -0.5%
Floor Covering 42 42 1.3
Subtotal $92 $92 0.3%
Appliance $12 $13 6.4%
Radio, TV & Other Electronics 46 47 2.9
Computer & Software 27 25 -6.5
All Other 3 3 -
Subtotal $88 $88 0.7%
F&F Subtotal $180 $180 -
Other GAFO
Jewelry & Luggage $27 $27 -2.1%
Books 16 17 9.7
Music, Hobby, Toy, Needlework 41 44 7.3
Sporting Goods 27 30 9.3
Office/Stationery 34 35 2.9
Other GAFO Subtotal $145 $153 5.5%
GAFO Subtotal $878 $899 2.4%
Convenience
Grocery $422 $435 3.1%
All Other Food & Beverage 43 46 7.0
Subtotal $465 $481 3.4%
Drug $134 $147 9.7%
Convenience Subtotal $599 $628 4.8%
Home Improvement/Building Materials $177 $187 5.6%
SHOPPING CENTER-
$1,654 $1,714 3.6%
INCLINED TOTAL
Non-Store Retailers $162 $155 -6.1%
Auto Dealers 832 878 5.5
Gas Stations 244 238 -2.5
Eating & Drinking 306 321 4.9
All Other 191 198 3.7
TOTAL $3,389 $3,504 3.4%
Note: Some figures are slightly rounded to the nearest billion dollars.
Note: Sales of Apparel & Accessories stores reflect inclusion of Jewelry Store sales in the Other GAFO group.
Note: Home Improvement/Building Supplies store sales reflect an adjustment of 36% to exclude sales of establishments that are
primarily wholesalers.
Sources: 2001: U.S. Census Bureau, Monthly Retail Trade Survey, December 2001, February 2002
2000: U.S. Census Bureau, Annual Benchmark Report for Retail Trade and Food Services, 1992-2000, BR/00-A, August
2001.

5
The year 2001s sales performance was so-so: not great, but not the disaster suggested in the popular press during much
of the year. The years 3.6% increase in Shopping-Center Inclined Stores sales was about three-fourths of the previous
decades 5.0% average, though it was the second smallest annual percentage increase of the past 11 years.

Total retail growth actually picked up a bit from the 2.9% growth rate of January and February to 3.1% through July, to
3.3% through October and to 3.4% by yearend. (Please see Figure 1)

GAFO sales growth in 2001, as compared to similar year-to-date periods for 2000, eased from 3.2% through February,
to 1.9% through October, before recovering a bit to 2.4% by yearend. Total Shopping-Center Inclined Stores sales
exhibited the same pattern, easing from a 4.2% growth rate through February 2001 to 3.5% through October, before
rising slightly to 3.6% by yearend.

Figure 1. Year-to-date 2001 Store Sales Growth vs. Year-to-date 2000

Store Sales, by Selected Store Types, Selected Months in 2000

5%
4.2%
3.8% 3.7%
4% 3.5% 3.6%
3.3% 3.4%
3.2% 3.1%
2.9% 2.8%
3% 2.5% 2.4%
2.3%
1.9%
2%

1%

0%
Feb-01 Apr-01 Jul-01 Oct-01 Year-end 2001

GAFO Stores Shopping Ctr.-Inclined stores Total Retail Sales

Source: U.S. Census Bureau

Shopping Center-Inclined Sales, 2000-2001

More detailed examination of year 2001 Shopping-Center Inclined Stores sales indicates:

Total Department Stores sales were flat at $242 billion, as opposed to their $18 billion, or 6.2%, sales growth
in 2000; Discount Department Stores sales rose by $5 billion, or 3.4%, while sales of the Conventional &
National Chain Department Stores fell by $5 billion, or 5.5%. Discount Department Stores now account for
60.3% of the Department Stores group sales, as now tabulated by the Census Bureau. (Note: $80 billion of
year 2000 Discount Department Store sales have evidently been moved by the Census Bureau to the Warehouse
Clubs & Superstores and Miscellaneous General Merchandise Stores groups.)

Apparel & Accessories Stores (excluding jewelry) registered $143 billion in sales in 2001$2 billion, or
1.3%, higher than in 2000. Womens Apparel Stores sales fell, from $32 billion to $31 billion (-2.4%). Family
Apparel Stores raised their sales by 1.7%, from $57 billion in 2000 to $58 billion in 2001. Shoe Store sales
remain stalled at approximately $22 billion.

The Furniture & Furnishings Stores groups sales were flat at $180 billion. Within the Furniture & Furnishings
Stores group, Appliance Stores sales rose 6.4% while Computer & Software Stores sales fell 6.5%.

Among smaller GAFO stores, Jewelry & Luggage Stores sales were down slightly (-2.1%) while Sporting
Goods Stores sales rose by about $3 billion, or 9.3%; Book Stores sales increased
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 substantially as wellby 9.7%and the Music, Hobby, Toy & Needlework Stores groups sales, according to
these preliminary data, grew by 7.3%, or about $3 billion dollars, to about $44 billion.

Home Improvement/Building Materials Stores sales (excluding wholesaler operations as noted earlier) were an
important story in 2001Census Bureau data indicate they grew by 5.6%, to $187 billion, after only a 2.4%
sales gain in 2000.

Drug Stores sales again rose strongly, by 9.7%, or $13 billion, to $147 billion. Food sales grew by 3.4%, or
$16 billion, to $481 billion.

Store types showing the largest sales gains in 2001, along with the size of their gains in billions of dollars and
the percent change from 2000, were as follows:

Store Type Sales Gain Percent Change

Drug Stores $13 billion 9.7%
Grocery Stores $13 billion 3.1%
Home Improvement Stores $10 billion 5.6%
Warehouse Clubs & Superstores $6 billion 4.5%
Discount Department Stores $5 billion 3.4%

All these stores are most often found anchoring open-air strip shopping centers rather than centers having
enclosed mall designs.

Among the store types showing least improvement over their year 2000 sales levels were these:

Store Type Percent Change

Computer & Software Store -6.5% (second down year in a row)
National Chain & Conventional Department Stores -5.5%
Womens Ready-to-Wear -2.4%
Jewelry (and Luggage) Stores -2.1%
Mens & Boys Clothing Stores -1.8%

A Review: Retail Store Sales, December 1992_- December 2001

A review of sales growth between year-end 1992 and year-end 2001 using the new NAICS store classifications
provides some longer-term perspective:

Shopping Center-Inclined Store sales (according to the new classifications) have risen from $1,085 billion in
1992 to $1,714 billion in 2001

- an average growth of $70 billion per year

- an annual growth rate of 5.2% during this nine-year period (See Figure 2 and Table 4.)

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 Figure 2. Growth in Shopping Center-Inclined Store Sales, 1992-2001

6% 5.7%
5.2%
4.8%
5%

4% 3.6%

3%

2%

1%

0%
1992-1997 1997-2001 2000-2001 1992-2001

Source: U.S. Census Bureau

This 1992-2001 sales growth is distributed as shown in Table 4, below.

Table 4. SHOPPING CENTER-INCLINED SALES GROWTH BY

STORE TYPE, 1992, 1997 & 2001
(Billions of Dollars)
Annual Annual Average
Sales Sales Sales
Store Type Average Sales Percentage
1992 1997 2001
Growth Growth
GAFO $537 $715 $899 $40 5.9%
Convenience 449 509 628 20 3.8
Home Improvement/
Building Materials 99 147 187 10 7.3
Total Shopping
$1,085 $1,371 $1,714 $70 5.2%
Center-Inclined
Source: U.S Census Bureau

The percentage share of Shopping Center-Inclined Store sales registered by the Convenience Stores group
(supermarkets, smaller food stores like butcher shops and bakeries, and drug stores) has declined markedly,
from 41.4% to 36.6%. (See Table 5.)

Table 5. PERCENT DISTRIBUTION OF SHOPPING CENTER-INCLINED SALES BY

STORE TYPE, 1992 AND 2001
Share of 1992-2001
Store Type 1992 2001
Growth
GAFO 49.5% 52.5% 57.1%
Convenience 41.4 36.6 28.6
Home Improvement 9.1 10.9 14.3
Total Shopping Center Inclined 100.0% 100.0% 100.0%
Source: U.S. Census Bureau

Census Bureau data from the 2000 Decennial Census and the P-60 series on Money Income of Households,
Families and Persons in the United States, 1992 (No.184) and Money Income in the United States, 2000 (No.
213) (adjusted to 2001 levels for this analysis) indicate the levels of national population and income growth
that are driving sales growth. Average household income as defined by the Bureau of the
8
Census rose at an annual rate of 4.9% per year between 1992 and 2000 according to household income data
reported in the two P-60 reports cited abovefrom $39,020 to $57,045. Thus average household income in
2001 was likely about $59,600assuming a 4.5% growth rate last year.

The Census Bureau estimates that as of June 30/July 1, 2001 the U.S. population had risen by 3.4 million
persons since the April 1, 2000 Census, to 284.8 million persons. (See Table 6.) The author estimates that by
yearend 2001, the U.S. contained about 285.5 million residents living in about 107.3 million households. This
household figure could reach 107.6 million by the end of 1Q2002. The growth-rate of households is about
1.2% per year.

Table 6. U.S. POPULATION AND HOUSEHOLD GROWTH, 1960-2001

Gross Average
Year Resident Population Households
Household Size
April 1, 1960 179,300,000 52,600,000 3.41
April 1, 1970 203,200,000 63,500,000 3.20
April 1, 1980 226,500,000 80,400,000 2.82
April 1, 1990 248,800,000 91,900,000 2.71
April 1, 2000 281,400,000 105,500,000 2.67
July 1, 2001 284,800,000 106,700,000 2.67
Source: U.S. Census Bureau

Shopping-Center Inclined Store sales since 1992 have risen by 5.2% annually (Table 4). Thus, the share of
income allotted to these sales has decreased, from 28.9% to 26.7% during the past nine years. Stated
differently: Shopping-Center Inclined Store sales are growing at roughly the same rate as income. (Please see
Table 7.) The share of income allocated to total retail sales has held steady at 54.7%, influenced in part by auto
dealers and related stores increasing their share of income from 11.4% to 13.7%. (Admittedly, some of these
sales are to businesses, not individual consumers.) Note: Food Service establishments sales of $203 billion in
1992 equated to 5.4% of income that year; their $321 billion of sales in 2001 equated to 5.0% of income in that
year.

Table 7. CHANGE IN INCOME AND RETAIL SALES

IN THE UNITED STATES, 1990-2001
Annual Change
Element 1992 2001
1992-2001
Households (As of April 1, following year) 96,000,000 107,600,000 1.3%
Average Household Income $39,020 $59,600 4.8%
Total Income (Trillions) $3.75 TR $6.41 TR 6.1%
RETAIL SALES (Billions)
GAFO $537 B $899 B 5.9%
Food 371 481 2.9
Drug 78 147 7.3
Convenience Subtotal $449 $628 3.8%
Home Improvement/Building Materials $99 $187 7.3%
Shopping Center-Inclined Sales Total $1,085 $1,714 5.2%
Auto Dealers $428 $878 8.3
TOTAL RETAIL SALES (Trillions) $2.05 TR $3.50 TR 6.1%
Share of Income Allocated To: 1992 2001
GAFO 14.3% 14.0%
Food 9.9 7.5
Drug 2.1 2.3
Convenience Subtotal 12.0% 9.8%
Home Improvement/Building Materials 2.6% 2.9%
SHOPPING CENTER INCLINED TOTAL 28.9% 26.7%
Auto Dealers 11.4% 13.7%
TOTAL RETAIL SALES 54.7% 54.7%
Source: U.S. Census Bureau, Money Income in the United States, 2000 (P-60, No. 213), and Money Income of Households, Families, and Persons in the
United States, 1992 (P-60, No. 184); 1999 Annual Benchmark Report for Retail Trade, January 1992 through December 2000, BR/00 A,
August 2001.

9
The ICSC Monthly Mall Merchandise Index, 2001

Regional mall non-anchor tenant sales reported to the Index for 2001 were $336 per square foot1.9% lower than
comparable centers registered in 2000. (See Table 8 and Figure 3.) GAFO in-line stores averaged $344 per square
foot2.4% higher than the centers overall productivity level, but 3.2% off 2000s sales level.

Figure 3. Year-to-Year Growth Rate of Per-Square Foot Regional Mall

Sales in the ICSC Monthly Mall Merchandise Index, 1993-2001

4%
2.9% 2.8%
3% 2.4%
2.1%
2% 1.5% 1.6%
1.3%

1% 0.5%

0%

-1%
-2%
-1.9%
-3%
1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
1993 1994 1995 1996 1997 1998 1999 2000 2001

Source: ICSC Montly Mall Merchandise Index

The years total sales change pattern for the U.S. featured 3.6% growth in sales per square foot through March,
followed by steady erosion throughout the remainder of the year. April was a weak month, as wasunsurprisingly
September. (See Figure 4.)

Figure 4. Change In Monthly Mall Merchandise Index Sales Per

Square Foot, Year To Date 2001 Vs. Year To Date 2000, By Month

10%
8.3%
8%

6%
3.6% 3.6%
4%
2.0%
1.3%
2% 0.7% 0.4% 0.4%

0%
-0.7%
-2% -1.2% -1.5%
-1.9%
-4%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: ICSC Montly Mall Merchandise Index

10
The key regional mall store types registering the highest levels of sales per square foot include:

Store Type Sales Per Square Foot

Jewelry $857
Food Courts $635 ($318 psf if dedicated common area is included)
Fast Food $484
Mens Shoes $439
Womens Accessories $435
Childrens Shoes $393
Womens Shoes $379
Home Entertainment & Electronics $368
Childrens Apparel $363
Family Apparel $356

Only six key store types recorded increases in sales per square foot in 2001 according to these Index results:

% Growth of
Store Type Sales Per Square Foot
Sporting Goods 5.9%
Athletic Shoes 5.4%
Womens Ready-to-Wear 1.0%
Fast Food 0.7%
Childrens Shoes 0.6%
Restaurants 0.3%

As we have mentioned in the past, the Indexs mall sales-per-square-foot numbers cannot be directly compared to total
retail sales numbers for the U.S. because the latter do not account for changes in retail space occupied by each store
type. It still does appear, however, that the average regional mall in the Index, whose sales per square foot productivity
declined in a 4% sales growth environment, continues to face challenges to its market share.

11
 Table 8. COMPARISON OF RETAIL SALES BY STORE TYPE IN
THE ICSC MERCHANDISE INDEX WITH U.S. TOTAL, 2000 AND 2001
Index Sales Per Square Foot 2000-2001 % Change
ICSC Index Total U.S.
2000 2001
(PSF) Sales
GAFO STORE TYPES
General Merchandise -- -- --
Apparel & Accessories
Womens Accessories & Specialties $444 $435 -2.0% n/a
Womens Ready to Wear $264 $267 1.0% -2.4%
Mens Apparel $310 $288 -7.6% -1.8%
Childrens Apparel $384 $363 -5.7% n/a
Family Apparel $389 $356 -9.4% 1.7%
Womens Shoes $392 $379 -3.5%
Mens Shoes $480 $439 -9.3%
Family Shoes $302 $291 -3.8% -0.9%
Athletic Shoes $290 $306 5.4%
Childrens Shoes $391 $393 0.6%
Apparel & Accessories, Miscellaneous $947 $781 -21.2% 10.2%
Subtotal $334 $322 -3.6% 1.3%
Furnishings
Furniture & Home Furnishings $319 $316 -0.8% 0.3%
Home Entertainment & Electronics $371 $368 -0.9% 0.7%
Subtotal $348 $345 -0.8% 0.0%
Other GAFO
Jewelry $908 $857 -5.7% -2.1%
Stationery/Cards/Gifts $294 $280 -5.0% n/a
Books $243 $239 -1.5% 9.7%
Sporting Goods/Bicycle $234 $248 5.9% 9.3%
Toys, Hobby $290 $283 -2.6% 7.3%
Other Miscellaneous GAFO $369 $343 -7.2% n/a
Subtotal $404 $393 -2.8% 5.5%
TOTAL GAFO (In-line) $355 $344 -3.2% 2.4%
NON GAFO CATEGORIES
Food Service
Food Court1 $642 $635 -1.1%
Fast Food $481 $484 0.7%
4.9%
Restaurants $350 $351 0.3%
Subtotal $431 $430 -0.3%
Other Non-GAFO Categories
Specialty Foods $410 $410 0.0% 7.0%
Supermarkets $610 $736 20.4% 3.1%
Drug/HBA $398 $432 8.6% 9.7%
Personal Services $342 $339 -1.0% n/a
Automotive $152 $145 -5.0% 5.5%
Home Improvement $359 $358 -0.2% 5.6%
Theatres $82 $85 4.2% n/a
Mall Entertainment $77 $76 -1.4% n/a
Other Non GAFO-Miscellaneous $355 $335 -5.6% n/a
Subtotal $232 $239 3.2% n/a
TOTAL NON-GAFO $301 $307 2.0% 3.7%
GRAND TOTAL $342 $336 -1.9% 3.4%
Note: If food court sales per square foot calculations included dedicated common areas in the denominator, sales productivity would
be in the $320psf range.
Source: ICSC, U.S. Census Bureau

12
Department Store Sales, 2001

Same-store sales registered by the 1,906 department stores participating in ICSCs Monthly Department Store Sales
Report on non-discount department store units open at least 13 months indicated a national sales change of 2.6%
during fiscal year 2001 (February 2001 January 2002), a better performance than the 5.5% sales loss in total sales
indicated by the Census Bureaus data for the conventional and national chain department store groups (which together
totaled $95.5 billion in 2001, compared to $101 billion in sales for 2000, according to the Bureau and as seen in Table
3.)

All four Census regions and nine sub-regions (i.e., divisions) experienced sales declines. The Western Region
(Colorado and all points west) again led the four major regions, with only a 1.7% sales decline. The Northeast (-2.0%),
the Midwest (-2.4%) and then the Southern region (-3.6%) followed. New England led the nine subregions with only a
0.3% sales loss, followed by the Pacific (-0.8%) and the Plains states (-1.9%). Next came Mid-Atlantic (-2.6%), Great
Lakes (-2.7%), followed by the Southeast (-3.1%) and the Southwest states (-3.5%). The South Atlantic and the
Mountain states experienced the largest sales losses among the nine divisions: -3.7% and 3.8%, respectively.

Results from 25 individual major markets for fiscal year 2001 are also reported by ICSC; only two of them recorded
department store sales growth. The Midwest has six markets included in this analysis of major department store
markets, and four of them were among the top 10 in comparable department store sales change during 2001: #4
Chicago (-0.7%), #7 Kansas City (-1.2%), #8 Cincinnati-Hamilton (-1.7%) and #9 Indianapolis (-1.9%). Ten of these
top 25 markets are located in the South and three of the ten finished in the top 10 reported markets in 2001: #2 Houston
(+0.1%), #6 Norfolk-Newport News (-1.1%) and #10 New Orleans (-2.1%). The West has five markets in the survey,
and two of them ranked among the 10 most stable of the 25 markets surveyed: #1 San Diego (+0.4%) and #7 Los
Angeles (-0.7%). The Northeast had one market in the top 10: #3 Boston CMSA (-0.3%). As noted, 23 of the 25
markets recorded negative sales changes, ranging as low as 8.7% in Atlanta and 8.2% in Dallas.

A Note on Internet Sales

In late February, the Census Bureau published its 4Q2001 estimate of Internet retail sales, thereby creating its second
full year estimate of these sales derived from data provided by some of the 11,000 firms in the Bureaus Monthly Retail
Trade Survey (which provides part of the statistical basis for this paper). Key data related to the Bureaus estimate
include these:

Internet retail sales (which exclude travel tickets, securities and ticket sales) totaled an estimated $32.6 billion in
2001, as indicated below, by quarter:

Year 2001 E-Commerce Sales

1Q $7.6 Billion
2Q 7.5
3Q 7.5
4Q 10.0
TOTAL $32.6 Billion

These Internet sales were equal to 1.9% of 2001s Shopping Center-Inclined Store sales and 0.9% of total retail
sales including food services.
This sales figure reflected a 19.3% increase over 2000s estimated e-commerce sales of $27.3 billion, which were
1.7% of Shopping Center-Inclined sales and 0.8% of total retail sales including food services.
It is interesting to note that 4Q 2000s sales estimate of $8.8 billion exceeded 4Q 1999s revised estimate of $5.3
billion by 68.6%, but the 4Q 2001 estimate exceeded 4Q 2000s figure by only 13.1%, suggesting that the rate of e-
commerce retail sales growth is easing dramatically.

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A Quick Look at 2002

The Census Bureaus Monthly Retail Trade Survey report for January 2002 indicates that the 2002 sales year has
started slowly, with January total sales up an estimated 3.1% over January 2001s sales levels. However, Shopping
Center-Inclined Store sales performed better, exhibiting a 5.9% January/January sales increase, with several individual
store types reporting strong sales growth, including Drug stores, Grocery Stores, and Apparel & Accessory Stores. (See
Table 9.)

Table 9. CENSUS BUREAU RETAIL SALES ESTIMATES FOR JANUARY 2002

& ANNUALIZED FOR FULL YEAR 2002
% Change, Projected
Store Type January 2001 vs. Year 2002 Sales
January 2002 (At These Growth Rates)
GAFO Store Group
General Merchandise stores 7.0% $453 Billion
Apparel & Accessories stores (ex. Jewelry) 3.6% 148
Furniture & Home Furnishings stores 4.4% 188
Other GAFO stores 8.7% 166

GAFO Store Average/Total 6.2% $955 Billion

Convenience Store Group

Grocery stores 4.3% $454 Billion
Other Food stores -- 46
Food store Average 4.2% 500
Drug stores 10.3% 162

Convenience Store Group Average/Total 5.4% $662 Billion

Home Improvement Stores 5.9% $198 Billion

Shopping Center Inclined Store Average/Total 5.9% $1.815 Trillion

Auto Dealers 3.8% $911 Billion
Gas Stations -13.9% $205 Billion
Food Services (Eating & Drinking Places) 4.7% $336 Billion
Mail Order -7.2% $144 Billion
All Other 2.0% $202 Billion
TOTAL, ALL RETAIL STORES 3.1% $3.613 Trillion
Note: Based on January 2002 preliminary figures only, unadjusted for seasonal variations.
Note: The Furniture and Home Furnishing Stores category includes electronic and appliance stores.
Note: Selected Other GAF: Jewelry -1.7%
Books 27.2%
Sporting Goods 7.9%
Other Hobby & Music 9.2%
All Other GAFO 3.4%

Were the January 2002 rates of sales growth to maintain throughout this year, Shopping-Center Inclined Stores
sales would rise by 5.9% or $1.01 billion to a level of $1.815 trillion, making this years sales growth one of the
best in the last decade. Total retail sales would increase by 3.1% or $1.09 billion to $3.613 trillion. We shall see.

Recap

2001 marks the year that the Census Bureaus Monthly Retail Trade Survey transitioned from grouping stores
according to the Standard Industrial Classification (SIC) system to grouping them according to the North American
Industrial Classification System (NAICS).

14
 Total retail sales in the U.S. increased during 2001 by 3.4% over their 2000 levelwell below their 6.1% growth
rate for the nine years since 1992.

Shopping-Center Inclined Stores increased their sales during 2001 by 3.6% or $60 billion; this growth rate is about
three-fourths of the 5.2% growth rate which these stores averaged during the 1992-2001 time period.

Several key store types did well, including Home Improvement/Building Materials stores (+5.6%), Drug Stores
(+9.7%) and Grocery Stores (+3.4%). Note that these stores populate open-air strip centers.

Among the GAFO stores, results were a bit weaker, as these stores registered a 2.4% sales gain in 2001. Some of
the strongest increases were realizedagainby stores that tend to favor strip centers or open-air formats, namely
Discount Department stores (3.4%), Book Stores (9.7%), and Sporting Goods Stores (9.3%).

Some staples of the regional mall business had a more difficult 2001, including Conventional and National Chain
Department stores (-5.5%), Womens Ready-to-Wear Stores (-2.4%), Shoe Stores (-0.9%), and Jewelry Stores (-
2.1%).

In general the rates of sales growth for Shopping-Center Inclined Stores and GAFO stores were greatest in 1Q
2001, weakened through October, and then rebounded a bit through yearend.

It should be noted that final employment figures for 2001 are expected to show a loss of jobs/employment
nationwide after job growth of 2,000,000 +/- per year during the 1995-2000 period. It may be that as the economy
weakened, consumers invested in their homes (home improvement items), bought necessities (groceries and drug
store items) and pursued at-home entertainment (books and sporting equipment); but postponed luxuries (jewelry)
and major apparel purchases.

The share of income spent in Shopping-Center Inclined Stores has fallen during the last decade, from 28.9% in
1992 to 26.7% in 2001. The vast majority of this decline occurred among Food Stores, whose share of total
household income eased from 9.9% in 1992 to 7.5% in 2001.

The share of income allocated to GAFO stores declined from 14.3% to 14.0% during this timespan, while the share
of income allocated to Home Improvement/Building Supplies retailers rose from 2.6% to 2.9%. The 10% rise in
relative share recorded by the Home Improvement retailers likely reflects the movement of the Baby-Boomers into
their peak home-owning years and consequent expenditures on the home.

In-line mall stores in the ICSC Mall Merchandise Index registered 2001 sales of $336 per square foot. In doing so,
they reflected a 1.9% sales per square foot decline from 2000the first such annual decline since the Indexs
inception in 1993.

Index results showed a 3.6% sales-per-square-foot gain through 1Q 2001, followed by persistent weakening
throughout to the rest of the year. Perhaps unsurprisingly, the Index turned negative with its September results,
then eroded further through yearend.

Three key store types which contribute significantly to the cach of any given regional malls small store array all
exhibited weakness: Womens Ready-to-Wear (+1.0%), Jewelry (-2.1%), and Shoes (-0.9%).

This weakness in year-over-year mall store performance may reflect the national weakness in non-discount
department store sales. The Census Bureau, as noted earlier, estimated that in 2001 Conventional and National
Chain Department store sales declined 5.5% from their 2000 levels. The ICSCs Monthly Department Store Sales
Index confirmed this trend when it reported a fiscal year 2001 sales decline of 2.6% in its sample.

Non-store retail sales declined 6.1% in 2001 from their 2000 levels. The Internet component of these non-store
sales rose by 19.4%; these sales equate to only 0.9% of total retail sales and only 1.9% of Shopping Center-Inclined
Store sales.
15
 The growth rate of Internet sales may be slowing. Such sales in 4Q 2000 exceeded 4Q 1999 sales by 68.6%, but
4Q 2001 sales exceeded 4Q 2000 sales by only 13.1%. Internet retailing may be finding its place as a complement
to real estate-based retailing, not a substitute for it.

A note on the future: over the course of this decade, the number of households in the U.S. will likely increase by 1-
1.2% annually; average household income will grow by 4-4.5% per year or so (to $84,000 or so per year by 2010);
as a result, retail sales should grow by 4-5% per year. We will keep you posted.

Dougal M. Casey is Managing Director and Head of Investment Strategy for Clarion Partners, which invests in real estate on behalf
of major public and private pension funds. At Clarion he leads the firms research program, assisting in strategy creation, property
acquisition, asset management, and client development. Previously, Mr. Casey spent thirteen years with Homart Development Co.,
the real estate subsidiary of Sears, Roebuck and Co. He received his Master of City Planning from Ohio State University and his JD
from the Catholic University of Americas Columbus School of Law. He is a member of the American Society of Real Estate
Counselors, and is past chairman of the International Council of Shopping Centers Research Advisory Task Force.

16
ICSC Research Advisory Task Force This ICSC White Paper is published by the
Chair: International Council of Shopping Centers.
Gregory Kerfoot, Sears, Roebuck & Co.
John M. Ingram, Chairman
Vice Chair:
Michael P. Kercheval, President
Cynthia Ray Walker, Federated Department Stores,
Inc.
Research:
Greg Andrews, Green Street Advisors Michael Baker, Director of Research
Steven Balfanz, Target Corporation Jean Lambert, Research Projects Manager
Alan Billingsley, The RREEF Funds Bindu Nair, Assistant Research Analyst
Robert J. Boyle, Ivanhoe Cambridge, CDP Group Susan Pistilli, Manager of Library Services
James K. Brand, The Limited, Inc. Veronica Soriano, Senior Research Analyst
Dougal M. Casey, Clarion Partners Michael Tubridy, Assistant Librarian/Writer
John B. Chapman, Chapman Consulting Jodi Uiberall, Educational Foundation Coordinator
John Cirillo, Nordstrom, Inc.
David G. Daleiden, Weingarten Realty Investors
Jeffrey J. Donnelly, CFA, Wachovia Securities For further information regarding this White Paper,
Ronald L. Fullam, CBL & Associates Properties, Inc. please contact Michael Baker at ICSC at
Karen L. Gentleman, Gentleman Associates (703) 549-7404 or Jean Lambert at (646) 728-3679.
Ken Jones, Ryerson Polytechnic University
Eugene I. Laxer, Lend Lease R.E. Investments, Inc.
William Maher, LaSalle Advisors Limited Copyright 2002 International Council of Shopping
Centers. All rights reserved. Protected under
Michael P. McCarty, Simon Property Group Universal Copyright Convention and international
William J. McCollum, New Plan Excel Realty Trust conventions. This publication may not be reproduced
Ross Nussbaum, Salomon Smith Barney in whole or in part in any form without written
Steven C. Parker, Westfield Corporation Inc. permission of the International Council of Shopping
Centers. International Council of Shopping Centers.
Sharon Peters, Sears, Roebuck & Co. Printed in the U.S.A.
Joan Primo, The Strategic Edge
John R. Ragland, The Rouse Company
Subha Ramesh, The Limited, Inc.
Craig R. Schmidt, Merrill Lynch
Douglas V. Schmidt, Best Buy Company
Kenard E. Smith, The May Department Stores Co.
William A. Speer, TrizecHahn Development Corp.
Kerry Vandell, University of Wisconsin-Madison
Gary T. Weber, J.C. Penney Company, Inc.
Christopher M. Wicker, The Retail Consulting Group
Lori Wittman, General Growth Properties, Inc.
Cindy Wozny-Carl, Deloitte & Touche
Mark Zygmontowicz, Thompson Associates

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