New stores and remodel information is one way to estimate the size of the retail
environments industry from the demand side. With this information, we can extrapolate
numbers from various sources to achieve an initial estimate.
The ACV CapEx Model
This model uses the Retail All Commodities Volume
(ACV) of the country as published by the U.S. Census
Bureau. That figure is $3.3 trillion and includes all goods
sold at retail in the U.S., less food and beverage and
Applying our percentage of CapEx spending of 2.5%
of revenue, we arrive at a figure of $83 billion. If 26%
of this CapEx figure4 is used to outfit the interiors of
new and remodeled stores (not the building shell), this
yields an estimate of the size of the retail environments
industry at $13.4 billion.
The Per Square Foot Model looks at new retail square
footage in 2011 and makes some assumptions. Chain
Store Age puts new retail square footage in the U.S.
at 448 million. As a side note, the International Council
of Shopping Centers (ICSC) lists total estimated retail
square footage at 14. 2 billion.
Applying a cost of retail interiors of $17.51 per square
foot5, we arrive at an industry estimate for new retail
square footage of $7.8 billion. Assuming the earlier
CapEx model is reasonable and that an additional
47% is spent on remodels, brings this model’s estimate
to $14.9 billion—very close to the ACV CapEx Model.