Retail has weathered the recessionary climate, but a quick temperature check will tell you that renovations continue to trump new builds even in a recovering economy.
Despite that, retailers are in almost complete agreement that real estate technology is more important now that it was a year or two ago. A new study, sponsored by Chain Store Age and Evoco, a provider of construction project management and real estate lifestyle management software solutions, polled CSA’s retail readership to find out where technology ranks in the retail real estate hierarchy. An overwhelming 70% said that technology is more important now than it was 12 to 24 months ago.
And it doesn’t seem to matter whether the objective is to expand or to remodel. Technology is still important. In fact, of the 63% of respondents who said they will open stores in 2012 — and the 73% who will complete remodeling projects — just a miniscule number said that technology had diminished in importance.
The survey expanded its net to capture the full picture of new growth and renovation plans for the coming months and years.
Forecasts for the next two years suggest that activity will continue to climb. The percentage of polled retailers who said they would not open any stores declines year over year, from 30% in 2012 to 20% in 2013 and 16% in 2014. The percentage of retailers opening stores not only increases year over year, but greater increases are seen in the quantity of stores being opened. For instance, only 8% of retailers said they would open 11 to 25 stores this year, but in 2013 and 2014 the number of respondents who planned to open 11 to 25 new stores grew to 11% and 15%, respectively.
On the remodeling front, although activity outpaced store openings in 2012, the respondents said that renovations will begin to slow, with less marked increases over new-store openings in 2013 and, by 2014, the projection is that the number of retailers with remodeling projects — 68% — will be comparable with the 66% who said they would be opening new stores.
“With 70% of retailers who responded to the survey stating they plan to open new stores in 2013, up from 63% opening stores this year, the outlook for growth in the retail industry is clearly trending positive,” said Alice Reimar, president, CEO and co-founder, Evoco, Calgary, Alberta.
The data become even more pertinent when they are analyzed by the retailer’s size as defined by number of stores or by the average square feet in the retailer’s typical store. In general, retailers with the largest portfolios are opening the greatest number of new stores and, unsurprisingly, remodeling more stores.
Retailers with 1,000-plus stores had the highest rate of “greater growth” compared with the last 12 months and, in 2012, plan to open and remodel the most new stores. In fact, 33% of respondents with more than 1,000 stores said they would add more than 100 new stores this year and remodel more than 100 of their existing stores.
Not surprisingly, that same group is also the biggest proponent of real estate technology, as an impressive 92.6% said real estate technology is more important now than in the last year one to two years.
For a full copy of the report, visit chainstoreage.com/evoco-confirmation-page.