The U.S. retail market chalked up a strong performance in the first half of the year even as several chains liquidated, with store openings outpacing closings and space remaining tight.

Several analysts also said the industry has momentum going into the rest of the year, with inflation easing and parents planning to spend more on back-to-school shopping. Americans plan to fork over roughly 16% more than last year for school-related gear, more than the year-over-year-inflation rate, an annual survey by brokerage JLL found.

And despite the bankruptcies and well-publicized closings of several large retailers in 2023, U.S. brick-and-mortar store debuts are running ahead of shutterings, by nearly 1,000. Discounters and off-price stores, and the beauty category are winners this year, performing well and expanding, creating demand for retail space in a constrained market, analysts said. In this landscape, open-air shopping venues are winners, while the losers or "weepers," as consulting firm GlobalData referred to them, include malls.

On the macro level, retail sales in the first half of the year have risen 3.2%, and several analysts said that this growth doesn't match the revenue increases the industry registered in 2021 and 2022. But put in context, this year's retail sales gains are in line with the annual growth rate of roughly 3% that was the norm for the industry between 2010 and 2019, according to a recent "Crunching the Numbers" report by GlobalData.

"If anything, retail spending has held up rather well," GlobalData said.

There are 3,448 store closings and 4,427 store openings announced so far for this year, according to the most recent data from Coresight Research. In 2022, for the full year 3,807 store closings and 5,383 store premieres were announced, according to Coresight.

Union, New Jersey-based Bed Bath & Beyond, which is liquidating after filing for Chapter 11 in April, leads this year's store closing list, with 866, according to Coresight.

The top 10 on that list, led by Bed Bath & Beyond, has three other chains — Tuesday Morning, David’s Bridal and Christmas Tree Shops — that filed for Chapter 11 bankruptcy protection. Coresight's ranking includes: Tuesday Morning, 463 closings; CVS Health, 300; 7-Eleven, 149; Walgreen's, 149; Foot Locker, 116; The Children's Place, 107; David's Bridal, 98; Genesco, 95; and Christmas Tree Shops, 82.

In the case of Bed Bath & Beyond, its newly available storefronts aren't staying vacant for long.

"As recent retail bankruptcies like Bed Bath & Beyond bring more space back into the market, retailers have been snapping up these vacated boxes because they are generally in top-notch locations," JLL said in its second-quarter retail report, which was released Thursday. "Discounter Burlington has scooped up 50 such spaces, while other retailers like craft store Michael’s and furniture store Havertys have also taken multiple locations."

As soon as Bed Bath & Beyond's square footage became available, "there was a good amount of competition" to grab it, James Cook, JLL Americas director of retail research, told CoStar News. Burlington Stores snagged a lot of it.

Burlington, based in Burlington, New Jersey, ranks No. 10 in Coresight's list of retailers opening stores this year, with 96. That list is topped by Dollar General, with 1,009 openings, followed by Family Dollar, 328 stores debuting, and Dollar Tree, with 308 openings planned, according to Coresight.

The overall U.S. retail vacancy rate is currently 4.2%, according to CoStar data.

"Despite longstanding concerns of a softening economy and eventual pullback in consumer spending, U.S. retail space markets remained resilient in the first half of 2023 thanks to steady demand from a diverse array of sectors, a still below-average pace of store closures, and minimal new supply," according to CoStar's most recent report on the sector. "Growing demand and still limited new supply additions have kept the U.S. retail space market at its tightest level on record, with just 4.8% of all retail space available for lease" as of the end of the second quarter.

In shopping centers, demand for space is running ahead of demand.

"There is now less space available for lease in shopping centers than at any other time since before the Great Recession of 2008," JLL said. "Availability within nonmall, multitenant retail centers dropped to 7.5% in June, a precipitous drop from 2020 when pandemic measures caused availability to spike to double digits."

Part of the reason for this is that few new retail properties are coming online, according to analysts.

"Retail construction starts have also been falling over the past year, with just 11.9 million square feet of projects started during the first quarter, the lowest level since 2005," JLL said. "The pullback in construction is a response to significantly higher interest rates, higher costs and reduced loan availability. With construction minimal and demand still relatively high, expanding retailers are finding it harder to get the spaces they are looking for in desirable areas."

Fast-growing discount chains are seeking out leases at sites such as so-called power centers, which include several big-box anchors and some smaller tenants, according to JLL. Meanwhile malls, particularly Class C properties, have had a dip in demand, JLL said.

“It’s a tale of two malls, it really is," Cook said. "In the [Class] A malls that are usually institutionally owned and they’re in the best locations in the best neighborhoods, they seem to be doing fine. … There are just certain malls that need to find new uses basically. ... It’s just an overhang from 15 to 20 years back. We built so many malls. We’re just over-malled.”

There are some good signs going into the last half of the year. After retail foot traffic fell in April and May, in June those visits turned positive year over year, according to a report, "Retail at the Halfway Point of 2023," by analytics firm Placer.ai. With May registering the lowest rate of inflation in two years, overall retail foot traffic could remain elevated into the second half of the year, according to Placer.ai.

“The question is what does that mean for back-to-school season, and perhaps even more importantly, does this give us a sign of what it could mean for the holidays,” Ethan Chernofsky, senior vice president of marketing at Placer.ai, told CoStar News. “We definitely saw a positive swing in late June. We saw foot traffic trending in the right direction.”

Consumers, including middle- and higher-income ones, are still facing higher prices and continuing to head to discounters retailers like Walmart to stretch their dollars, benefiting those retailers and off-price chains such as T.J. Maxx, according to Placer.ai and GlobalData.

"Consumers of various backgrounds flocked to discount chains in search of value, proving that these retailers have something for everybody," Placer.ai said in its report.

A GlobalData consumer poll found 60.7% are hunting for more bargains; 57.9% are trading down to cheaper brands in food and grocery; and and 57.4% are shopping shopping around more and checking to find better prices.

"If you’re confused about the consumer economy and retail performance, it’s likely because many of the indicators are very schizophrenic," GlobalData said in its report. "Some parts of the retail sector are holding up well, others are chugging along reasonably, and others appear to be in a perpetual state of gloom. This polarized set of outcomes arises both because there isn’t enough growth for everyone to succeed ... The good news is that there are gains to be made. The bad news is that retail has not yet found its new level so isn’t going to get back to relatively stable ground for some time. Uncertainty, it seems, is the only certainty right now."

The first six months, U.S. retail sales rose around 3% over the prior year, according to GlobalData's report.

"In cold, hard cash this represents an increase of $129.3 billion," it said. "Now, while this is a very respectable level of performance, one of the problems is that set against the context of 14.6% growth in 2021 and 6.8% growth last year, an uplift of 3.2% doesn’t actually sound all that impressive. In numerical terms, the growth so far this year represents a very sharp slowdown on where we've come from."

But 2021 and 2022 were "abnormal years for retail," driven in part by the $2.3 trillion injection of government stimulus into the consumer economy, according to GlobalData.

"Indeed, between 2010 and 2019, the average annual growth rate for retail spending was 3.1% per year," it said in its report. "So, if anything, current performance is pretty much aligned with the long-run average. Growth is also being delivered off the back of some very stiff prior-year comparatives, which underlines the resilience of the retail sector."