More Insights from our Retail Sentiment Survey

Holiday Sales Exceeded Expectations for Many but Year-to-Year Increase Declined: Outlook Remains Optimistic with Hiring Up, Expansions Planned

Our fourth annual post-holiday Retail Sentiment Survey revealed a depth of input from store managers in our 95 property, 13 million-square-foot portfolio of shopping centers. In the previous post, we shared highlights from this Survey, which is conducted three times each year, with a focus on sales volume and peak selling periods in the 2013 holiday season—the latter pointing to an emerging retail real estate trend. This post focuses on store managers’ feedback on 2013 vs. 2012 performance, volume of in-store traffic, the impact of 2013’s winter weather and the store managers’ optimistic outlook going forward.

2013’s Spike in Sales Volume Fell Short of Previous Year

Despite the fact that more than half the store managers in our Survey (57.3 percent) said their 2013 holiday season sales met or exceeded their expectations, the actual increase in the volume of sales was lower than realized in 2012. Sales volume, as reported by 51.2 percent of our respondents, was the same or higher for the holiday period than in 2012. However, in our 2012 Survey, a robust 65 percent of respondents reported an increase in seasonal volume over 2011. The decline is likely due, at least in part, to the fall off in 2013 holiday shopping traffic as reported by our Survey respondents. Only 49.4 percent of surveyed managers said 2013 traffic was the same or higher than in 2012. In the previous year, 61 percent reported a year-over-year spike in in-store traffic. And that brings us to that in-store traffic stopping Grinch: the weather.

Stormy December and Late Thanksgiving Crimped In-Store Traffic and Sales

Unusually severe December weather brought snow, ice and sub-zero temperatures to the locales of many of our respondents’ stores, keeping would-be shoppers at home, dampening sales and boosting e-commerce purchases. In addition to the weather, retailers got a double whammy with the loss of six shopping days due to a late Thanksgiving. Thanksgiving 2013 (November 28) fell at the latest possible point, delaying the official start of the holiday shopping season. In 2012, consumers had 31 shopping days and five weekends between Black Friday and Christmas Eve. In 2013, they had only 25 days and four weekends.

Optimistic Outlook, Hiring on the Rise, Expansion Plans. Potential Retail Real Estate Trends in the Making

Respondents indicated optimism fueled by an increase in full-year sales and confidence in a strengthening economy. Close to half of survey participants (49.4 percent) reported total 2013 sales equal to or above 2012. Their positive outlook is demonstrated by staffing increases and expansion plans. Over 30 percent (33.7) added staff for the holiday season, up from 26.6 percent in 2012, with 40.5 percent indicating they plan to retain these employees going into 2014. Another retail real estate trend may be in the making in terms of retail real estate leasing, as indicated by respondents who say expansion plans are on the table for 2014.


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