Levin Management Poll Reflects Wide-Ranging Impact of Today’s Top Driver
A solid majority of retailers responding to Levin Management Corporation’s (LMC’s) annual Pre-Holiday Sentiment Survey say they are optimistic about what this vital season will bring. They also cite inflation as the top driver likely to impact performance – an observation that aligns with current economic headwinds and may resonate in everything from holiday spending, to peak sales periods, to retailers’ customer engagement efforts.
Seasonal expectations
Nearly 64% of LMC poll participants anticipate positive holiday performance. While still encouraging, this metric is down 8 percentage points from last year and coincides with a 4.6 percentage point increase in participants who have uncertain performance expectations. Nearly 25% of respondents are not sure how the season will play out.
“By all accounts, the retail industry has been enjoying a post-pandemic resurgence in 2022, and optimism continues,” said LMC’s Matthew K. Harding, chief executive officer. “However, there is an overarching sense we are in changeable times – a sentiment extending well beyond the retail sector.” To that end, LMC respondents ranked shifting economic conditions/consumer confidence second (after inflation) among the factors most likely to shape holiday performance.
Harding noted several industry-tracking organizations, including Deloitte and ICSC, forecast healthy seasonal spending in 2022. “These studies indicate consumers plan to spend more on holiday shopping this year, partly due to the simple fact things cost more, but also because they want to treat their loved ones and celebrate the season,” he said. “They also report that inflation pressures have consumers focused on finding the best deals, and early-season promotions will be especially popular.”
This aligns with the LMC survey findings, which point to a front-loaded season. Just under half of participants expect their sales to peak before (25.9%) or during (23.6%) the Thanksgiving/Black Friday weekend. This is a slight uptick from last year and continues a sustained and well-documented trend toward earlier holiday shopping.
Laser focus on the customer
Looking past factors beyond their control, retailers are focusing their energy in areas where they can move the needle this holiday season. Nearly one-quarter (23.1%) of LMC survey respondents say they are trying new ways to enhance customers’ holiday shopping experiences. Popular adds and enhancements tie to loyalty programs, stepped-up customer service initiatives, and adoption of conveniences like click-and-collect and same-day delivery service.
“When it comes to marketing, it is so important to evolve and take advantage of new opportunities,” said Melissa Sievwright, LMC’s vice president of marketing. “We are observing a laser focus on building customer relationships, which is crucial for brick-and-mortar as retailers work to counter e-commerce growth and gain market share within their competitive set. Companies that are in-tune with what inflation-stressed consumers want – value, convenience and service – are well positioned to prosper this holiday season and beyond.”
Sievwright noted several tenants pointed to the incorporation of in-store events for the 2022 holiday season, marking a welcome post-pandemic development. “While we may be past the ‘revenge shopping’ of 2021 – when pent-up demand fueled record sales – we see no lack of enthusiasm for being out in the world, shopping in stores and experiencing some in-person holiday cheer,” she said.
For seven decades, LMC has served as a trusted single-source commercial real estate services provider for institutional and private owners. The firm’s next Retail Sentiment surveys, which poll retail store managers in the firm’s 125-property, 16 million-square-foot leasing and management portfolio, will be conducted in January and June, exploring 2023 outlooks, and gauging technology trends and mid-year performance, respectively. The award-winning survey program reflects the firm’s commitment to understanding issues and trends impacting retailers from a street-level perspective.
