Survey: Store managers report strong year-to-date sales but …
The first half of 2022 continued the positive pace set for the retail industry through 2021.
That’s according to the Mid-Year Retail Sentiment survey by commercial real estate service provider Levin Management Corp. At the same time, the results indicate a moderation in expectations for the coming months. (The survey is a poll of retail store managers in LMC’s 125-property, 16 million-square-foot leasing and management portfolio.)
Nearly 75% of survey respondents reported sales levels at or above last year’s mid-year total, above the decade-old survey’s historic average of 59% (2012-2019; this question was not asked in 2020-2021). Notably, nearly 71% say shopper traffic volume is at the same or a higher level year over year, marking the second-highest percentage for this performance indicator in the survey’s history.
“The traffic figures reflect the reality that people like to shop in stores, and they are doing so,” said Matthew K. Harding, CEO, LMC. “And where during the pandemic store visits tended to be strategic and driven by purpose, shoppers today may be making more frequent trips because they enjoy the experience.”
As to whether economic shifts during the first half of the year have impacted their performance outlook for the balance of 2022, nearly 58% of respondents replied “yes.” Almost 27% replied, “I’m not sure.”
In addition, almost 61% of survey participants said they have raised or anticipate raising prices in response to inflation, up from approximately 54% in LMC’s 2022 Outlook Survey, conducted in January.
“Adjusted expectations and uncertainties abound, for retail and the entire business community,” Harding said. “We do anticipate – and may already be seeing – a slight cooling off on spending as consumers react to inflation, higher interest rates and other socio-economic factors.”
Staffing Shortages
The Mid-Year survey also touched on another well-documented pain-point for the industry: staffing shortages. More than 70% of respondents say they are actively hiring, with nearly 59% of that cohort reporting it is harder to find qualified job candidates than in the past. Although the figure is down about 20 percentage points from LMC’s 2021 Mid-Year survey, Harding noted the drop likely reflects the longevity of the issue rather than a turn in the right direction.
Other findings from LMC’s Mid-Year Retail Sentiment Survey are below.
• Nearly three quarters (72.6%) of respondents offer an online option for purchasing goods, scheduling appointments or placing orders for pick-up, up from approximately 50% in 2017.
• Retail tenants are using a variety of technology-centered tools in-location for customer service/convenience.
The most popular include: digital coupons, discounts and/or loyalty points (64.5%), electronic receipts (49.7%), free Wi-Fi (48.4%), and in-store, online ordering with free shipping for out-of-stock items (47.7%)
• For companies employing technology-centered marketing, the most-used tools are social media (79.8%) — with Facebook (89.7%) and Instagram (73.5%) far outranking the competition — followed by e-mail (78.6%) and text messaging (49.4%).
• About two-thirds (66.3%) are actively employing technology to analyze customer and/or sales data for the purpose of merchandising, creating services/menu options, planning in-location events or creating individualized special offers.
LMC’s next Retail Sentiment surveys will be conducted in October/November, gauging expectations and plans for the holiday season, and in January, exploring outlooks for the coming year.