Survey finds retail store managers optimistic going into second half of year
Three quarters of retail store managers report their sales levels match or are exceeding last year at this time.
That’s according to Levin Management Corp.’s annual "Mid-Year Retail Sentiment Survey," which polled store managers in the firm 125-property, 16 million-sq.-ft. leasing and management portfolio. The study by the commercial real estate services provider also revealed that an identical percentage anticipate volume to remain steady or pick up pace through the remainder of 2023.
“Retail has enjoyed a couple of stellar years, and it’s positive news that the first half of 2023 has carried this momentum forward for our tenants,” said Matthew K. Harding, CEO, Levin Management Corp., who added the matching/exceeding sales metric is among the highest in the survey’s 12-year history. “Our poll reflects the industry’s successful and ongoing expansion in a post-pandemic era.”
Three of the retail industry’s well-documented pain points — inflation, economic uncertainty and labor shortages — seem to be causing less concern as compared to last year for LMC survey respondents. More than half (51.5%) of participants have raised — or anticipate raising — prices in response to inflation in 2023, down from 60.8% in the mid-year 2022 survey.
Also, 40.7% say year-to-date economic shifts have impacted their performance outlook for the balance of the year, down from 57.8% in the mid-year 2022 survey. And 47.4% of those actively hiring are having a harder time finding qualified job candidates year over year, down from 58.5% at mid-year 2022 and 79.1% at mid-year 2021.
“While these negative-leaning drivers are still part of retailers’ day-to-day challenges, our tenants seem to be feeling less volatility than last year – which is substantiated by slowing inflation and encouraging mid-year economic reports,” said Harding. “The labor shortage appears to be improving, with our findings tracking alongside data from the Bureau of Labor Statistics.
The first half of 2023 saw its share of store closures and Chapter 11 filings, including by Bed, Bath & Beyond, Christmas Tree Shops, David’s Bridal and Party City. But Harding noted that brands running their course is an age-old reality of an industry where change is a constant.
“There is inevitable fluidity in retail tenancies; as some reach their end, others are actively rethinking their footprints and seeking expansion opportunities,” he said. “The broader retail landscape shows a healthy balance of established retailers adapting to meet changing consumer preferences and a new generation of brands coming online.”
LMC’s Mid-Year Retail Sentiment Survey also checks in on technology trending, gauging tools that are being leveraged to enhance the customer experience and marketing. This year’s poll reflected the continued, widespread availability of an online option for purchasing goods, scheduling appointments for services or placing orders (offered by about 70% of respondents).
In-store, the “top three” tools retailers have in place to augment customer service this year include digital coupons, discounts and/or loyalty points (offered by 66.2% of respondents); electronic receipts (offered by 53.1%); and in-store, online ordering with free shipping for out-of-stock items (offered by 49.0%).
E-mail, Social Media and SMS Marketing
Tech-centric marketing is also an important part of the equation, with e-mail and social media remaining the two most popular tools, employed by 74.4% and 71.9% of survey respondents, respectively.
“Email and social media have been neck-in-neck as the go-to digital marketing channels throughout our survey’s history, and both offer deep analytics that provide insight on customers’ preferences and mindsets,” said LMC’s VP of marketing Melissa Sievwright. “With the explosion of influencer marketing, social media – especially – is becoming even more dynamic.”
SMS (text messaging) is now being used by 58.1% of LMC survey participants.
“The use of text messaging has grown significantly over the past six years; this data point is up from 27.7% in 2015, with incremental growth each year in between,” Sievwright said.
LMC’s next Retail Sentiment survey will be conducted in October/November, gauging expectations and plans for the holiday season, and in January, exploring outlooks for the coming year.