Positive trends are on the uptick for shopping center tenants, according to Levin Management Corp.‘s 2019 Retail Sentiment Outlook released Monday.
The commercial real estate services firm released its findings from its annual January poll of store managers within its 105-property, 15 million-square-foot portfolio.
Survey participants said the strong holiday season wrapped up the year’s solid performance. About three quarters (75.4 percent) reported 2018 holiday sales and shopper traffic were at or above 2017’s numbers.
For 71.6 percent of respondents, 2018’s annual sales were at the same or a higher year-over-year, compared to a trailing five-year average of 57.3 percent.
“Based on our own Pre-Holiday Retail Sentiment Survey and other industry reports, we expected holiday and annual sales results to be positive,” Matthew K. Harding, LMC’s CEO, said. “However, these dramatic jumps exceeded our expectations. In fact, the same/higher annual sales percentage is the strongest in our survey’s eight-year history.”
Harding said a healthy economy and improving consumer confidence helped spur the retail industry in 2018, however, year-end stock market volatility may have influenced what would have been an even stronger performance.
“We do anticipate that 2019 will be another healthy year for retail, however the pace of growth may moderate,” he said.
Respondents also anticipated a strong 2019. Just over 68 percent said they feel optimistic about their stores’ performance in 2019 and 27.2 percent said their companies expect to open additional locations over the next few months.
“We are pleased to see a strong sense of optimism conveyed in this year’s Outlook survey,” Harding said. “And the fact that more than one quarter of our respondents’ organizations plan to grow their brick-and-mortar presence is another positive sign of retail progress and profitability.”
LMC asked tenants what driver they feel will have the biggest impact on their retail business in 2019. The biggest percentage (42.9 percent) said the economy/consumer confidence. Others said shifting consumer expectations and shopping patterns (20.8 percent), ecommerce growth (16.3 percent) and evolving technologies (9.8 percent).