6.2 Outlook and Strategy Our outlook for the retail sector remains optimistic as current conditions for consumers are supportive of future growth in spending. Low gas prices, rising home values, low interest rates, improving labor market conditions, and rising incomes should provide for moderate growth of retail sales. Retai€ sales in June marked a solid rebound after a slow first quarter. pointing towards stronger growth in the second half of the year.40 While consumer spending has gathered momentum, the growing share of sales going to pure-play e•commerce players from traditional brick and mortar stores has created fierce retailer competition. Spending shifts into consumer segments that fall outside of malls and shopping centers are also pressuring traditional retailers' bottom lines. However, we do see positive momentum in retail demand drivers going into the crucial back to school and holiday shopping seasons. Our forecast for shopping centers calls for sustained recovery with accelerating gains over the next two to three years as retailers continue to adjust, strengthen and strategically expand. While we do not expect to see the demand levels recorded in the previous two cycles, we are expecting to move into a more balanced market. Over the next five years, we expect new construction to remain well below the historical average at less than 1% of stock annually. As a result of improving demand and limited new construction, vacancy is forecast to fall under its historical 25-year average of 10% by 2017 and remain at or below the 9%-10% range through 2020. Rent growth will generally correspond with strengthening occupancy and retail sales; however, prior peak rents will not likely be reached in the majority of metros until 2019 or later.4' Our retail strategy remains largely focused on class A product, as we believe the most dominant properties that garner a large share of retail sales today within a trade area will be the most competitive, flexi