Despite continued economic pressures and flagging consumer confidence, neighborhood and community shopping centers are positioned to weather the storm. At least that’s the premise of a new report titled, “Where are they now?” by Torto Wheaton Research (TWR) economist Abigail Marks.

In it, she laments that analysts are painting the entire retail sector with too broad of a negative brush. “After a year of falling home prices and rising energy costs, the media would have us believe that retail weakness across the board is a foregone conclusion. Not so fast, my friend,” says Marks.

She argues that some retailers have performed better than others, and that within the strengths and weaknesses of different retail sectors investors can find important clues to the health and future performance of individual retail center types.

“Neighborhood and community centers, with their concentration in the food and health sectors, seem poised to weather the storm, as the stores in these sectors have outshined other retailers over the past two years,” says Marks. However, regional malls may not fare so well. “With their concentration in the general merchandise sector and clothing, regional malls may be headed into a year more like 2007 than 2006, as the momentum for same-store sales growth in these sectors seems to have cooled.”

Marks notes that the concentration of retailers within typical neighborhood and community centers has sheltered them from the ill winds that have blown over the residential housing markets for the past year. However, their records have not gone totally unblemished either. She cites diminished consumer capacity to spend on goods such as food, clothing and other discretionary items having taken their toll.

“We expect this negative effect from high gas prices to linger into 2008; however, the retailers that populate neighborhood and community centers appear to be well-positioned to see stronger absorption this year,” says Marks.

Still, the new year is not off to a promising start. According to new data from New York-based researcher Real Capital Analytics, sales of significant retail properties totaled just $2.2 billion in January, which is the lowest monthly volume in the past four years. And sales of strip centers dropped 78%.

TWR’s research confirms that over the past two years, neighborhood and community center absorption has slowed, with 2006 setting the record for lowest absorption. But despite mounting economic pressures, absorption rebounded in 2007, and higher same-store sales were recorded by Kroger, Walgreens and Safeway.

Retailing names tied more closely to the housing markets, including The Home Depot and Sears, have seen marked sales declines for the past two years. And while Lowe's and Staples notched sales growth in 2006, last year reversed the trend.

Department stores, too, including Macy's and JCPenney, could not match their 2006 same-store sales growth. Four general merchandise stores — Target, Wal-Mart, TJX and Costco — held their own in 2007, but they bear watching for signs of trouble, says Marks.

Meanwhile, specialty retailers are having their worries as well. Last week, Dallas-based Zales announced it is closing up to 105 stores across the country, while The Sharper Image filed for bankruptcy protection.

Finally, community centers likely will benefit from the continued growth in drugstores, which saw healthy same-store growth in 2007, and food stores, which are among the select few that had stronger growth in 2007 over 2006.