Survey: Signs point to positive year for retailers
Retail tenants in the Northeast are feeling positive about store prospects for 2018.
That’s according to real estate services firm Levin Management Corp.’s 2018 Retail Sentiment Survey in which 68.1% of survey respondents indicated they are feeling optimistic about 2018 store performance.
“A relatively strong economy, historically low unemployment and growing consumer confidence set the stage for ongoing improvement for retail in 2018,” said LMC President Matthew K. Harding. “Kiplinger anticipates in-store sales will grow 2.4% in 2018, the strongest advancement since 2014. With no foreseeable major changes on the horizon, we, too, anticipate another year of continued momentum.”
LMC also asked tenants whether their companies anticipate opening additional stores in 2018 and 30.4% answered in the affirmative.
“We continue to hear about planned store closings, yet this is an important reminder that retail is an industry of constant evolution,” Harding said. “As some concepts reach their end, others expand and thrive. It is encouraging to see so many of our survey respondents fitting into the latter category.”
LMC asked its retail tenants whether low unemployment has brought noticeable change to the hiring climate. More than one quarter (28.2%) of survey participants indicated they have observed some shifts. Of those respondents, 63.3% are seeing fewer qualified job candidates in their pools of applicants. Additionally, 53.3% reported demand for higher starting salaries, with 20% indicating demand for more employee incentives.
Still, the ability to prosper in today’s increasingly digital and mobile world requires retailers to embrace shifting strategies. Nearly half (49.6%) of LMC’s 2018 Outlook survey respondents indicated they have adapted their business model in response to the growth of ecommerce. The most popular changes involve heightened focus on technology and service.
Of those survey participants whose companies have made changes, 54.3% have increased their use of technology-centered marketing tools in-store, while 56.3% have upped technology-centered marketing to reach customers outside the store.
Other strategic shifts embraced by more than half of those that have made changes include increased training and focus on customer service (58.9%), and added in-store services and incentives (51.0%).
“Our survey indicates retailers are using multiple avenues to distinguish themselves and win business,” noted Melissa Sievwright, LMC’s vice president of marketing. “It has become clear they are leveraging technology to get consumers’ attention and enrich the in-store shopping experience. There are elements of touch, feel and interaction in a physical store than cannot be duplicated online. The emphasis on training and service reflects that our tenants understand what is important to their customers today.”