REAL ESTATE

Strong Holiday Season Likely for Retailers

BY CSA STAFF

By Bruce Schanzer and Jennifer Bitterman

The holiday season has kicked off in earnest over the past weekend, and we are optimistic about the growth trajectory forecasted for the holiday shopping season. Deloitte’s holiday forecast suggests a 4.0-4.5% increase in spending from November through January over prior year levels, and the National Retail Federation anticipates November and December retail sales to increase 4.1% over 2013. Cedar Realty Trust echoes the sentiments of these economic forecasters and anticipate a modest increase in overall holiday spending, whether online or in-store during the peak spending period. Steady improvements in economic fundamentals, coupled with lower than average gas prices across the nation, are fueling our optimism.
Traffic at our centers appeared strong throughout the entire week leading up to the Thanksgiving holiday.Cedar’s centers are generally grocery-anchored, complimented with a strong mix of soft-goods junior anchors and small-shop tenants. Because our centers are grocery-anchored, we see the increased traffic levels start early, as people begin to stock their refrigerators to prepare holiday meals. This increase in traffic is maintained throughout the holiday season. Early indications show that our Kempsville Crossing center in Virginia Beach, Virginia, has seen a pick-up in traffic and sales velocity, as a new Walmart Neighborhood Market opened in mid-October 2014. At Colonial Commons in Harrisburg, Pennsylvania, this will be our first holiday season for our newly constructed Ulta and Old Navy junior anchors. These tenants will help drive additional traffic and compliment the already established soft-goods tenant mix at the center.

The Black Friday creep started again this year with many online retailers promoting Black Friday sales on or before Thanksgiving. Amazon and Walmart in particular started their Black Friday promotions nearly a week early, and we began to hear and see holiday advertisements in early November. Many major retailers opened at some point on Thanksgiving, adding another day to an abbreviated holiday shopping season. Electronics and appliance retailers opened earlier than most on Thanksgiving, starting doorbusters and special promotions mid-afternoon. This early promotion and the creep of Black Friday likely influenced consumer spending patterns, and drove consumers to start their holiday shopping earlier than in prior years.

E-commerce sales will be poised to experience double-digit growth in 2014. Deloitte’s forecast suggests that online holiday retail sales and mail order purchases in the United States will increase between 13.5% and 14.0% compared with 2013. Retailers are gearing up to utilize a more engaging, omni-channel shopping experience during this upcoming season. It is estimated that nearly 50% of purchases will involve “digital interactions,” whether they be from sales directly on the Internet, or checking out via tablets or smartphones at brick-and-mortar locations. Price sensitive consumers will utilize the Internet to help price-shop across various retailers for the most affordable pricing prior to venturing out to the stores.

Many retailers will also encourage in-store pick-up for sales purchased on the Internet to help drive additional traffic to brick-and-mortar locations. Consumers are likely to make additional in-store purchases when driven to the physical location for pick-up of goods purchased online. At many of our grocers, consumers will have the option to shop online for their groceries and pick-up at locations at our centers. This will not only drive increased traffic at our grocers, but also incremental traffic in our centers. Driving consumers to retail destinations for online pickup will help increase traffic and hopefully sales volume at all retail outlets.

Lower gas prices across the nation may also serve as a catalyst to help further boost holiday sales and increase traffic in malls and shopping centers. Price conscious consumers, like the shoppers we attract at many of our retail centers, will likely feel a small increase in disposable income due to recent falling gas prices resulting in savings at the pump. Deloitte estimates that lower gas prices could provide US households with up to $260 that can be used towards increased spending during the holiday season. This savings will hopefully translate into spending at our tenants that attract a price conscious consumer, including dollar stores and discount retailers like Dollar Tree, Ross Stores and our TJ Maxx concepts.

At Cedar, we are optimistic about the strength of this holiday season and future consumer spending forecasts. We hope to have a fruitful holiday season at our centers and expect this momentum to continue into 2015.

Bruce Schanzer is the President and CEO of Cedar Realty Trust.
Jennifer Bitterman is the Director of Investor Relations & Corporate Analytics at Cedar Realty Trust.

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REAL ESTATE

Project Spotlight: Steelpointe Harbor

BY CSA STAFF

Bridgeport, Connecticut – A major Northeastern waterfront project has achieved lift-off. Bridgeport Landing Development, a subsidiary of The RCI Group, announced that it has completed the $15-million Phase I infrastructure improvements at its mixed-use Steelpointe Harbor project in Southern Fairfield County Connecticut and it has begun going vertical.

Steelpointe is a 2 million-sq.-ft. superregional waterfront project located adjacent to I-95 in Bridgeport, Connecticut. Spanning 82 acres, the project will feature more than 750,000 sq. ft. of retail, restaurants and entertainment, a 12-screen premium theater, two hotels, 1,100 mid-and-high rise residential units, 30,000 sq. ft. of office, and a 200-slip full-service deep water marina. Bass Pro Shops announced in April that it would open its first and only store in Connecticut at Steelpointe in 2015.

“Our leasing for Steelpointe has been heavily focused on a tenant mix of both recognizable and first-to-market retailers,” said Ferrara Jerum International partner and Steelpoint Harbor leasing consultant Douglas Jerum. “We have gained tremendous momentum in our discussions with a strategic blend of fashion, home, food, and entertainment users that will deliver a diverse and appealing combination of accessible luxury to the entire region. We expect to be making several exciting announcements following ICSC New York (Dec. 8-9, Jacob J. Javits, New York City).”

More than 1.2 million people live within a 30-minute drive of Steelpointe, with an average household income of $112,000. Steelpointe also boasts that it is the only mixed-use development in the state of Connecticut that includes Long Island in its trade area. That is achieved thanks to the presence of the Bridgeport-Long Island Ferry, a year-round ferry service operated by the Bridgeport & Port Jefferson Steamboat Company. The ferry, which provides 10-20 daily round-trip service runs for vehicles, passengers and freight across Long Island Sound between Bridgeport and Port Jefferson, services 800,000 passengers annually. The company will soon be relocating its Connecticut terminal to a site immediately adjacent to the eastern edge of the project which is expected to increase its ridership to more than 1.4 million passengers annually in the next few years.

Steelpointe’s waterfront plays an important role in defining the project’s personality and functionality. The project’s public Harborwalk is a defining highlight: a large waterfront promenade that stretches along the southern perimeter of the site. A waterfront plaza marks Harborwalk’s midpoint, a natural gathering place where residents and visitors can enjoy breathtaking views of the 100-, 200- and 300-foot yachts moored in the marina.

The $50-million first phase of the development is expected to be completed by the fall of 2015.

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MOBILITY

Target turns stores into mobile game for the holidays—with help from Google

BY Marianne Wilson

Minneapolis – Target Corp. continues to invest in new mobile and digital investments to drive traffic. The retailer announced it is partnering with Google on an interactive mobile game experience that has a big in-store component. The project is part of Google’s Art, Copy & Code program, which Google describes as partnerships that explore how creativity and technology can work hand in hand to build brands.

The new holiday feature, called Bullseye’s Playground, features Target’s familiar bull terrier mascot Bullseye and other characters. Shoppers can access the feature—both in and out of Target stores—by going to a new site, Target.com/Play, where they can play six interactive games, including sledding, ice fishing, snowball fights and more.

In the stores, special promotional signage will prompt shoppers to play, with special codes that they can use to unlock characters and new game levels. For every game played with Bullseye’s Playground, Target will donate $1 to St. Jude Children’s Research Hospital – up to $1 million.

Target will offer a more enhanced version of the mobile games in four select stores (Sunnyvale, Calif. Chicago, Dallas and Roseville, Minn.) where customers will be able to try and use Google’s new Project Tango Development tablets. The tablets will offer what is essentially a a virtual/augmented reality experience that turns the stores into a 3D winter playground—one that changes as they move around the space. Shoppers can interact with the retailer’s mascot characters and also engage in such virtual activities as taking part in a snowball fight.

“With this partnership, we’re using cutting-edge mobile technology to elevate the in-store holiday experience to provide Target guests a glimpse into the future of retail – where mobile brings together virtual experiences and physical stores,” said Alan Wizemann, VP of product, Target.com and mobile.

Target is the latest retailer to partner with Google’s Art Copy & Code program.

“For each project, we partner with an iconic brand that pushes the boundaries of digital experiences,” said Ben Malbon, Google’s director of creative partnerships. “Consumers are embracing mobile devices as an essential tool and we wanted to work with Target to show how mobile offers a way to make the in-store experience both fun and memorable.”

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