As goes consumer confidence, so goes the retail market. How are consumers feeling these days? James Cook, Director of Analytics from Xceligent dropped in to give us the numbers.
“Consumers are definitely positive right now. Unemployment clocked in at 5.5 in March, the same as February. Overall the trend is clear: jobs are more plentiful.”
Because of that, consumers are apparently feeling pretty good, and shopping as a result. In the most positive results since before 2007, a recent CNN and ORC poll of Americans revealed:
52% said we have a ‘very good’ or ‘somewhat good’ economy,
42% reported they are ‘better off than a year ago.’
Lower gas prices are making a measurable difference. Since they are down as much as one dollar per gallon in some areas, to a national average of $2.50, it’s a bonus check for consumers, and it’s showing up in retail sales.
March sales are up 1% over February.
Bars and restaurant sales are up 7% over the previous year.
What Brokers are Saying
Xceligent’s Advisory Board of top retail brokers keep their finger on the pulse of the business across the country. Every quarter they’re polled and asked to discuss business in their own words. The results are filtered to identify the words they are use most. Here are the 2015 keywords and phrases for Q1:
Robust, Active, Optimistic, Improving, Stable
'Seeing a robust future,’ ‘Expecting to tick up’
48% of brokers now say retail has “begun to tick up,” up from 35% last year. Brokers reported more challenges finding space for tenants, large and small.
Only Available in Stores
Online shopping continues to grow in popularity. Online sales represented 5.8% of all sales in 2013, and 6.5% in 2014. Online retail will continue to grow, but whether it really undermines brick & mortar sales is another question.
Should we be concerned with the impact of online sales?
“Yes and no,” says Cook. “Stores that offer service, or aren’t selling commodities, have nothing to worry about.”
Retailers that meet the challenge with incentives to bring customers to the store environment are evolving Omni-channel methods to meet the needs of today’s marketplace.
Tale of Two Cities
For a look at how the retail picture can vary, consider Nashville and Memphis, Tennessee. Approximately the same size, they are remarkably different places, and their distinctions are mirrored in their retail performance:
Where Nashville’s economy has been revitalized by new industries expanding upon the city’s historic base of music and education, Memphis’ economy is lagging, despite a robust transportation industry. Memphis worked to grow the businesses it already had, successful with transportation, but the agricultural economy has waned. In contrast Nashville has capitalized on its heritage and invited new technologies and businesses in, building on the quality of life to add value.
Onward and Upward for 2015
Overall, vacancy is expected to stay level throughout the year, moving a few basis points either way.
In Las Vegas retail vacancy in Q1 dropped from 9.8 to 9.6. New QSRs are coming in to that market. We’re in a more competitive environment than a year ago.
“We’re excited to see new things coming. As long as consumers are optimistic, business will be good for us.”