The coming year signals an opportunity for growth and strategic change for retailers in a moderating climate, according to Levin Management Corp., which Monday released the findings of its annual Retail Sentiment Outlook Survey.
Now in its 13th year, the poll asks retail store managers in the firm’s 125-property, more than 16 million-square-foot leasing and management portfolio about their performance, plans and expectations.
“Despite ongoing concerns tied to rising prices and economic uncertainty, our tenants are moving forward on the momentum of strong post-pandemic performance,” Matthew Harding, LMC’s CEO, said. “There is room for them to grow, and opportunity for them to leverage the benefits of consumers’ love for the brick-and-mortar environment.”
More than 30% of LMC’s Outlook Survey respondents anticipate opening additional store locations in 2024 — the highest figure since 2017. This aligns with national trending, in which store openings continue to outpace closures.
“Experience, convenience and loyalty incentives are the clear ‘secret sauces’ for retailers,” Harding noted. “These areas continually rate among their top priorities in our survey, punctuating the attributes that distinguish physical retail from its online counterpart. In fact, our survey participants ranked in-person customer service and support, and the social experience of in-person shopping, as brick-and-mortar’s top advantages. What they are doing to evolve correlates directly.”
Additionally, more than 25% of those who are adapting reported rolling out a rebranding or branding refresh.
“While not in the ‘Top 3’ adaptations, this is an impressive data point worth noting,” Harding said. “Brand transformations are enormous undertakings and show a true commitment to the future.”
The LMC survey also provides evidence that retailers recognize the importance of continually evolving in what has always been a mercurial industry. Nearly 45% of respondents said they have recently adapted or have plans to adapt their business model to maintain or improve their competitive advantage. Within that cohort:
- 67.4% noted an increased focus on training and customer experience;
- 47.2% are offering new or updated customer loyalty/incentive programs; and
- 39.3% have augmented their convenience-focused initiatives.
The Outlook Survey asks retailers to compare their latest annual and holiday seasonal sales to the prior year. 64.8% of LMC survey respondents reported that 2023 annual sales volume met or exceeded 2022 levels, and 68% reported their holiday seasonal sales volume was the same or better year-over-year. While these figures top the survey’s trailing averages (61.3% and 65.9%, respectively), they reflect a dip from the past two Outlook Surveys.
More evidence of a return to normal can be seen in staffing and labor. Currently, 41.5% of LMC respondents are hiring, down from 48.3% one year ago and 62.6% two years ago. Coupled with the most recent U.S. Bureau of Labor Statistics data, this is likely a sign that more retailers are fully staffed.
Looking ahead, retailers’ overall sentiment regarding the coming year leans positive: 64.3% of LMC survey respondents are optimistic about their stores’ performance in 2024. Of the balance, feelings of uncertainty (21.6%) far outweigh pessimism (14.1%).
