1. A Presentation for ICSC Board of Trustees Beverly Hills, California January 22, 2010 Michael P. Niemira Michael P. Niemira Vice President, Chief Economist & Director of Research International Council of Shopping Centers 1221 Avenue of the Americas, 41 st Floor New York, New York 10020-1099 mniemira@icsc.org Reviewing Holiday Spending Trends And What the Leading Indicators Tell Us About 2010

2. Highlights 2009 retail cycle was dominated by the recession-to- recovery impacts and transition. 2009 retail cycle was dominated by the recession-to- recovery impacts and transition. By September 2009, retail-sector sales “recovery” was evident (but not broad based). By September 2009, retail-sector sales “recovery” was evident (but not broad based). Holiday sales improved markedly in 2009, but profitability main story of season. Inventory control important ingredient. Holiday sales improved markedly in 2009, but profitability main story of season. Inventory control important ingredient. Story for 2010 is the broadening of the retail sector demand improvement. Story for 2010 is the broadening of the retail sector demand improvement. ICSC’s outlook for spending in 2010—vastly improved. But what do you think? ICSC’s outlook for spending in 2010—vastly improved. But what do you think?

3. An Entry Point To Understand the Business Cycle and Spending in 2009 Recession Gives Way to Recovery - 2 -

4. Turning to a Dynamic of the 2009 Holiday Season Sales Pace Greater Than Inventory Pace  Big Ticket Items Home Furnishings and Electronics  Department Stores - 3 -

5.  Apparel Stores The Broader Story Inventories Adding Big Lift to Q4 2009 Growth – 1.5 to 2.5 pp. to Q4 Growth (Jan 29 Report) - 4-

6. - 5 - Let’s Look Closer at this Retail Sector Recovery… Tracking the Industry Sales Performance

7. -4.8%+3.6% Easy Comparison and Economic Recovery Turn the Industry Picture Around Industry Chain Store Trends - 6 - Jan-Aug: -4.2% Sep-Dec: +1.5%

8. Consumers Were Slow to Complete Holiday Shopping - 7 -

9. The 2009 “Traditional” Holiday Season Strongest Season Since 2006 - 8 - Note: Updated January 8, 2010 to include Best Buy sales figures/

10. Retail-Store Segment Review and Forecast* … 2009 and 2010 Fiscal Years - 9 - * Based on ICSC monthly chain store sales tallies Economic recovery will help all segments in 2010 Economic recovery will help all segments in 2010 Luxury sector likely to perform best (sales-wise) in 2010 Luxury sector likely to perform best (sales-wise) in 2010 Overall forecast for 2010 FY is for 3-to-3.5% growth Overall forecast for 2010 FY is for 3-to-3.5% growth Mid-2009 forecast for weakness in spending, but was even weaker for 2009FY Mid-2009 forecast for weakness in spending, but was even weaker for 2009FY

11. “Trend” Key An Eye On This: High-Income Households Leading the Confidence Change 2010 Reading Much Improved Over 2009 - 10 -

12. - 11 -

13. - 12 - Not Perfectly Correlated, But Helps to Explain Spending Turnaround

14. Real Earnings Growth: An Interesting Message - 13 -

15. - 14- Less and Less Drag from Housing Impacts

16. The Katona Effect Volatility in Price Level Measure of Consumer Uncertainty - 15-

17. - 16 - ICSC’s Leading Indicator Continues to Be Upbeat on 2010 Industry Sales

18. - 17 -

19. - 18 - Recovery Continues

20. Thank You