Editor’s Note: This story was originally reported for our client, GlobeSt.com. You can read the GlobeSt.com version of the story here.
NORTH PLAINFIELD, NJ—(SBN)—Levin Management says its annual January Retail Sentiment Survey of store managers within its 95-property, 13 million-square-foot portfolio shows a generally positive outlook for 2016, despite being conducted at the outset of the current stock market volatility.
More than two-thirds of survey respondents said they are optimistic about the coming year.
“Based upon what they’ve seen for 2015 and in anticipation of 2016, they were feeling generally positive,” Levin Management president Matthew K. Harding tells StateBroadcastNews.com exclusively. “A lot of what’s going on in the stock market, or worldwide issues, certainly some of the oil issues, impact us domestically but not in our region directly. So I think based upon consumer sentiment, how they saw sales come through in the holiday season, and a number of domestic factors including lower gas prices that at some point in time should translate into some increased consumer spending, we’re still good with our retailers.”
At the same time, a significant number (20.5 percent) of Levin survey participants expressed indecision in gauging what 2016 will bring. “The unseasonably warm fall and early winter, and what has become a longer – and therefore more diluted – holiday shopping season impacted sales for some retailers,” Harding says. “As such, it makes sense that our tenants are expressing some remaining uncertainty.”
Some retailers expressed interest in expanding stores, he says.
“There’s a feeling that the steady increase in sales that we’ve seen over the past few years would continue,” Harding says. “It’s really a shaking off of the memories of the 2009-2011 timeframe.”
The Levin survey showed positive – albeit modest – momentum in both year-over-year and holiday sales. And e-commerce didn’t make the huge inroads into sales that many observers had predicted.
“While e-commerce has grown significantly, it still is a relatively small portion of the overall retail sales in the United States,” Harding says. “Shoppers are still going to bricks-and-mortar stores. What we’ve seen over time is a convergence of bricks-and-mortar and e-commerce, merging those two together to optimize both channels. More retailers are using e-commerce or social media or other ways to reach their customers to bring them into the stores, and a number using their online platforms to support their stores through pickup at stores, so you are still bringing the customer into the store for perhaps another impulse purchase.”
Nearly 53 percent of survey respondents reported their 2015 sales were at the same level or higher than 2014. This percentage is up from 51.7 percent and 49.4 percent reporting same/higher sales in Levin’s January 2015 and 2014 polls, respectively.
The Levin findings also indicate the 2015 holiday shopping season was good for the majority of Levin survey participants, with 58 percent reporting 2015 holiday sales at the same level or higher than 2014. And 57 percent reported that shopper traffic was at the same or higher level than during the 2014 holiday season. While these figures are slightly lower than last year’s poll (63.6 percent reported same/higher sales; 60 percent reported same/higher traffic), it is still above the prior year (50.6 percent reported same/higher sales; 48.2 reported same/higher traffic).
More than half (50.9 percent) of respondents said they will add or enhance their marketing efforts involving technology – such as mobile apps, social media, email and text messaging – in 2016.
Approximately half indicated their company has changed its business model in response to the growth of e-commerce. The most popular adaptations include enhanced in-store services and incentives, added in-store pickup and returns option for purchases made online, and generally increased collaboration between online and bricks-and-mortar operations. Among the retailers that have made business model changes, 40.6 percent reported they have seen a positive impact on sales.
In some cases, this will include new stores. More than a quarter (28.4 percent) of the survey respondents indicated plans for their company to open additional locations this year.
“We think that will evolve,” Harding says. “The online channel will continue to grow, and overall retail space may contract over time, some stores may become more showrooms to display merchandise and brand, depending on the use category, and certain categories are more subject to online purchasing than others, electronics, for example.”
Levin also asked retailers if they have seen any shifts in the hiring climate as the unemployment rate continues to trend downward. The survey results indicate about 44 percent of respondents are noticing some changes, most prominently in the areas of applications by fewer qualified job candidates and increased demand for higher starting salaries.
“US unemployment inched down to five percent last month, and if this trending continues it will likely have a growing impact on retail hiring,” Harding said. “As such, this is an area we will be focusing on more closely in upcoming surveys.”
To hear a more in-depth audio interview with Harding, click on the player below.