Levin Management poll: Retailers see holiday spending as merry and bright

North Plainfield-based commercial real estate services firm Levin Management Corp. said new findings released this week show industry projections for consumer holiday spending seem strong, plus there’s solid year-to-date performance so far, appearing to be offsetting retailers’ concerns about how COVID-19, supply chain and labor challenges may impact performance during this critical season.

Levin’s annual Pre-Holiday Retail Sentiment Survey, which polls store managers in its 120-property, 16 million-square-foot leasing and management portfolio, found that nearly 80% of survey participants reported year-to-date sales have met or exceeded expectations, with more than three-quarters reporting the same for store traffic. Approximately 72% are optimistic about what the holiday season will bring, though nearly 20% said they are not sure how their stores will perform.

Matthew Harding. (Levin Management Corp.)

“There is no doubt that people are shopping — as consumers, we’ve all seen the evidence firsthand at busy shopping centers,” noted LMC CEO Matthew Harding. “Tenants are leasing space at a healthy pace, as well. As such, this level of optimism for the holidays makes sense and is encouraging.”

Still, Harding said that, considering the level of uncertainty 2021 has brought on a variety of fronts, it is understandable that a notable number of LMC survey participants are not sure what to expect. Respondents ranked factors that they believe will influence seasonal sales performance. COVID-19 safety concerns led the field, followed by inventory availability and labor supply.

At the bottom of the list? E-commerce growth concerns.

“Retailers are facing a number of well-documented hurdles, certainly, yet the position of e-commerce impact among them is worth noting,” Harding said. “Just a few years ago, this topic led the conversation. Now, we are seeing a true equilibrium, as bricks-and-mortar and online operations feed one another with an integrated approach highlighted by ship-from-store and click-and-collect collaboration.

Across the board, studies by major industry players — such as ICSC, the National Retail Federation and Deloitte — project year-over-year holiday sales increases of between 7% and 10.5% for 2021.

Within this context, nearly 56% of LMC survey participants reported they are seeking to add seasonal staff. This percentage far exceeds the Pre-Holiday Survey’s 10-year trailing average of 34.5%. Given the widely discussed retail labor shortage (the U.S. Bureau of Labor Statistics most recently tracked 1.32 million retail job openings at the end of August), it comes as no surprise that LMC tenants are having a hard time filling seasonal positions.

In fact, approximately 72% of survey respondents said it is harder to find qualified job candidates than in the past. Nearly half (48.6%) of those hiring have increased their seasonal hourly wage over previous years. Further, many LMC tenants are offering incentives beyond hourly wage to attract workers — from referral, performance and end-of-season bonuses; to opportunities for transitioning to full-time permanent staff; to free meals during shifts; to flexible compensation options.

When asked about when they expect holiday sales to peak, more than 25% of LMC survey respondents selected “Pre-Thanksgiving/Black Friday,” reflecting a sustained trend toward earlier shopping patterns.

“We’ve come to expect holiday promotions to begin sooner in the fall,” noted Melissa Sievwright, LMC’s vice president of marketing. “This year, retailers — and consumers — are also contending with widespread supply chain issues, which may prompt shoppers to start even earlier over stock-out concerns.”

Competition for holiday sales and traffic has brick-and-mortar retailers working hard to gain and retain customers. One-quarter of LMC Pre-Holiday Survey participants said they are trying something new this year to enhance their store’s seasonal shopping experience, and nearly 95% say they have maintained or increased holiday-specific marketing this year.