Presentation on theme: "The Shopping Center Group Retail Trends and Best Practices for Recruitment."— Presentation transcript:
The Shopping Center Group Retail Trends and Best Practices for Recruitment
THE SHOPPING CENTER GROUP, LLC
CREDIT CRUNCH FINANCING – Lending – Value of Shopping Centers CONSTRUCTION – New Construction Stall – Completion of Existing THE NEW NORMAL – Was “Location, Location, Location” – Now “Location, Timing, Demographics”
RETAILER CREDIT RATINGS
RETAIL TRENDS Retailers Proforma Changed – Rate of Return (Sales Projections and Rental Rates) – Co-Tenancy Requirements Shopping Down – Discount, Dollar Stores, Fast Food Backfill Existing Space Non-Traditional Uses – Flea Markets, Churches, Entertainment, Schools, Storage, Fitness, Hotel to Office Inventory Store Prototypes Marketing – Rewards/Loyalty Programs, Specialty Events, Give-A-Ways
2009 SHOPPING HABITS REPORT* While the majority of consumers in North America rated their current financial situation as good (35%), fair (40%) or excellent (7%) – only 18% rated their financial situation as poor. Consumers are somewhat optimistic regarding the next 12 months. Over 40% believe their financial situation will improve over the next 12 months, while 47% believe their situation will stay the same and only 11% say their situation will get worse. Over 75% shoppers report spending cut backs – Over half on fine dining, casual dining, movie theater attendance and salon/spa services. – Between 40%-50% reported cutting back in most retail categories. Least affected were discount, grocery and necessities. Cuts due to precautionary measures more than to economic reasons (job loss or wage reduction). Shoppers’ perception of their financial situation had a bigger impact on their shopping behaviors than did their income. 75% of those with incomes of $100,000+ reported cutting back. Women report spending cut back more than men. Women are typically responsible for the majority of household shopping. While 80% of consumers reported cutting back over the last 12 months, only 40% report that they expect to increase their shopping behavior when the economy improves. – Greatest likelihood of increased were shopping trips in general, department store visits and purchase of discretionary goods. * Source: INTERNATIONAL COUNCIL OF SHOPPING CENTERS
UNEMPLOYMENT RATE %
RETAIL SALES (EXCL. AUTO)
RECENT SAME STORE SALES BY OUTLET
RECENT SAME STORE SALES BY CATEGORY
ECONOMIC RECOVERY The road to economic recovery throughout 2010 will remain turbulent as many downside risks remain. Leasing demand levels to bottom in fourth quarter 2009, remain stagnant in 2010 Market rents have fallen on average 10 percent and will fall another 5 to 7 percent in 2010 Investment transaction volumes set to increase up to 50 percent Source: 2009 The Paramus Post “Commercial Real Estate Recovery Second-Half 2010 according to Jones Lang LaSalle’s U.S. National Economic & Property Outlook”
IDENTIFY RETAIL Retail Lease Trac ICSC Events Franchises Help local entrepreneurs develop a business Identify peer towns with a successful local retail business looking to expand. Who is advertising in regional paper? Run comparisons of similar size and type markets for their retail businesses you don’t have. Talk to managers about who to contact for expansion.
SITE SELECTION CRITERIA Existing Retail - Total GLA (Gross Leasable Space) within 1,2,3 miles (or Trade Area) Business – Total GLA, Major Employers, Office, etc. School – All Schools with enrollment including nearby college or university Sales Comps – retail & restaurant sales figures Rent Comps – current rent comps for retail & restaurants Traffic Counts for all streets bordering the major retail corridors Is there any proposed road construction planned? Impact Fees, Tap Fees, Zoning Hotels – number of rooms, year built, occupancy rate, average room rate, seasonality Hospitals – number of rooms, employees and regional draw Access & Signage – new traffic signals, right in / right out, signage restrictions Liquor Licensing – is it available? how hard to get? how long does it take? Outdoor Seating – availability, restrictions, etc. Parking requirements – city parking ratio? Residential Communities and Pricing – subdivisions, apartments, condos, etc. Marketing – What media exposure and brand awareness does your market have? Trade Area Maps – custom trade areas are crucial – drive times, regional draws, etc. Potential Anchor Closings: Is the proposed site located in a shopping center with a weak or financially troubled anchor (i.e., Kmart, Winn Dixie; a Walmart that may be relocated and expanded to a Super Walmart)?
BE PREPARED FOR ECONOMIC RECOVERY WEBSITE Prepare “Elevator Speech” 60 Seconds Retail Marketing Materials – Macro to Micro – Demographics in Radius Rings & Trade Area (Polygon) – Traffic Counts, Schools, Major Employers, Residential Keep information concise and relevant - KISS Create a strategic plan for correct placement of retail – Zoning, Traffic Signals, Sign Restrictions, Parking Requirements, Greenways, Roadways Keep industry contacts informed of positive changes – Liquor by the Drink Changes – New Schools, Roadways, Hospitals – Increase in Employment, Retail Sales Tax Revenue, Hotel Occupancy TIMELY