Significant pain is still in store for the retail sector, despite a recovery in the stock market, according to a new report from Boston-based real estate services firm Colliers International.

The report, “Spring 2009 Retail Report,” found that shopping center owners, investors and tenants alike have fallen victim to a severe reduction in retail spending, leaving store space vacant and same-store sales well below levels seen in recent years. Retailers have shown little interest in opening new outlets, and are instead waiting on the sidelines for economic conditions to improve and for a visible uptick on the jobs front, Colliers said.

The report said that most chains will continue the trend of shuttering underperforming locations that began in 2008. Retailers closed more stores than they opened last year, and will do likewise in 2009.

Also, urban retail continues to outperform suburban retail, but even rents in the most fashionable urban shopping districts have been on a downward trend.

"On the bright side, this economy has not been without some winners," remarked Ross Moore, executive vice president of market & economic research for Colliers International. "Discounters such as Wal-Mart have been recording same-store sale increases, and drug stores have been one of the most active retail categories in recent years."

"Survival will be the name of the game in 2009, and even for stronger players, the emphasis will shift from store openings and expansion to streamlining operations," said Pat Duffy, chairman of Colliers Retail Services Group. "Contraction may be the harsh reality for most, but the strongest concepts will prevail, not only from the elimination of competition, but from the best tenant’s market in decades."