North Plainfield, N.J. -- Results of a survey released Tuesday by shopping center owner Levin Management Corp. showed that, while store sales remain relatively flat, the majority of its retail tenants are optimistic about the balance of 2011.
According to a mid-year survey conducted by Levin and polling the thinking of its roster of 1,000 tenants about the January through June 2011 period, about half of the retailers reported a sales decline for the six months and half reported sales were "the same" or "better" compared with the first six months of 2010. More than 62% at mid-year indicated the first-half was either better than expected, or what they anticipated.
"The results indicate that the economy and recession are still affecting retail sales, which are a prime benchmark for the economy's overall performance," said Matthew K. Harding, Levin Management's president and COO.
Customer traffic, spending results, and hiring trends remain mixed in the Mid-Year Survey, mirroring the results of a previous Levin survey. For customer traffic, the split was again nearly 50-50 between those reporting lower traffic and those citing either the same or higher traffic.
While surveyed retailers reported a strong Easter season -- 52.6% had Easter sales that were the same or higher than in 2010 - overall, customers have been spending less per transaction during the first half of 2011 compared with 2010: Just 18.1% of retailers reported shoppers spending more per transaction compared with a year ago.
A total of 27.7% of responders cited increased markdowns across the board, and 39.3% indicated selective markdowns of products for promotional purposes; 32.8% said their markdown policy had remained the same as last year.
The economy drew mixed reviews from surveyed retailers: Forty-six percent said the economy has not been a factor in their sales while 41.4% indicated the impact of the recession for the first half of 2011 was "largely negative." Just 12.5% called the economy a positive factor.
The extreme and snowy weather this winter played a big role in the year-to-date performance for retailers, according to the survey results. Nearly 51% of respondents said weather had negatively impacted their stores' year-to-date results, and only 29% believed that weather conditions did not affect sales.
There was a decline among those voicing optimism about future prospects: while 62% were optimistic at the beginning of 2011, those reacting positively for the balance of the year declined to 53.3%. Just 6% expressed pessimism, however, with the balance "not sure" or viewing the next six months as largely a continuation of the year-to-date performance.
The optimism that is being voiced in the retail ranks is turning into more store openings, according to survey findings. Nearly one-quarter of those surveyed indicated that their companies have already opened new stores in the first six months of 2011, and nearly 20% said that additional stores will be opened between now and the end of the year.
"Clearly, there continues to be a great deal of uncertainty in the retail marketplace," said Harding. "We see some hopeful signs in the latest numbers, especially in the number of stores that have opened or will open new units this year, while noting that the effects of the recession haven't completely worn off. At the very least, there is continued stabilization within the retail ranks, some hiring is expected, and only a small percentage of those surveyed are pessimistic about the rest of the year."