Retailers Gear Up for Early Shopping Emphasis and Stepped-Up Seasonal Hiring
With momentum picking up as the holiday shopping season approaches, retailers polled in Levin Management’s 2014 Pre-Holiday Retail Sentiment Survey are showing strong enthusiasm for seasonal sales potential. The findings, released this week, also indicate expectations for strong pre-December shopping and plans for stepped-up temporary hiring with positions that may carry into the new year.
Based in North Plainfield, N.J., Levin annually in late October/early November polls store managers within its 95-property, 13 million-square-foot shopping center portfolio. Year-to-date, overall sales volume is at the same or a higher level for more than half (56.5 percent) of this year’s pre-holiday survey respondents. In the retail real estate services firm’s mid-year 2014 poll, only 42.9 percent of respondents reported sales at the same or a higher level year-over-year.
Year-to-date store traffic mirrors this same trending. More pre-holiday respondents (48.7 percent) reported the same or stepped-up traffic, compared to mid-year, when 44.3 percent of respondents reported static or increased traffic.
“Severe weather and continued economic uncertainty in early 2014 may have dampened sales and in-store traffic – especially in the Northeast, where our portfolio is centered,” noted Levin Management’s Matthew K. Harding, president. “However, things have picked up pace over the last few months, and we are seeing strong momentum heading into the holiday season.”
Levin survey respondents and a number of industry-tracking organizations agree. An impressive 80.3 percent of retailers polled by Levin expect their holiday season sales to equal or surpass 2013 figures. In its holiday forecast, the National Retail Federation (NRF), which reports that holiday sales have grown by an annual average of 2.9 percent during the past decade, anticipates that 2014 holiday sales may increase by more than 4 percent year-over-year. The International Council of Shopping Centers (ICSC) in its latest consumer tracking survey reports that 70 percent of consumers in that survey plan to match or exceed their 2013 holiday budget.
“Consumer spending ties directly to consumer confidence,” Harding noted. “As the economy has continued to improve, shoppers may feel greater job security and have more discretionary income. The recent drop in gas prices also may enable people to allocate some extra dollars for buying holiday gifts and decorations this year.”
EARLY SHOPPING EXPECTED (AGAIN)
With 39.0 percent of respondents expecting their seasonal sales to peak during or before the Thanksgiving/Black Friday weekend, the Levin pre-holiday survey findings indicate that retailers are gearing up for early shoppers. Fewer (12.7 percent) expect sales to peak in early December, while larger portions of the respondent poll expect sales to peak in mid-December (22.0 percent) and the weekend before Christmas (18.6 percent).
In its Holiday Shopping Survey, Accenture found the strongest “consumer enthusiasm” for Black Friday in eight years. In that poll, 66 percent of participants said they are likely to shop on Black Friday, compared to 55 percent in 2013 and 44 percent in 2007.
“Following two strong years of healthy Thanksgiving/Black Friday performance, it makes sense that retailers are optimistic about the potential of early sales,” Harding said. “At the same time, it seems that our respondents also expect steady activity in December, especially as Christmas approaches.”
The Levin findings again fall in line with the ICSC consumer tracking survey. The trade organization reports that “about 35 percent of consumers have or will have started their holiday shopping by the end of October. Roughly three out of five shoppers will begin shopping by Thanksgiving this year, and by the end of the Thanksgiving weekend 86 percent will have started making purchases.” Still, only 10 percent of shoppers will finish their purchasing before Thanksgiving, according to ICSC, while two-thirds will be shopped-out by mid-December.
HOLIDAY INVENTORY AND STAFFING
Retailers will again stock up and staff up for the holidays. More than three-quarters (78.3 percent) of Levin survey respondents indicated that they will bring in the same or a higher amount of inventory for the holiday season compared to last year.
More than one-third (36.4 percent) will take on additional staff to cover this busy time. The hiring percentage is up from 33.3 percent in 2013 and just 18.4 percent in 2012. Mirroring this three-year growth in the percentage of retailers hiring for the holidays, the NRF forecast indicates that the industry will likely hire between 725,000 and 800,000 seasonal workers. NRF reports that last year’s 768,000 seasonal hires represented a 14 percent increase over 2012.
Of the Levin respondents who are hiring seasonal workers, 42.9 percent indicate that they will likely retain some of those employees as permanent staff. “As the unemployment rate continues to drop, it looks like the retail industry is contributing to the jobs rebound,” Harding said. “That seasonal employees may find their temporary jobs translating into new careers in retail is very good news for the industry and the economy as a whole.”
Levin’s next retail sentiment survey will be conducted in early January, gauging actual holiday performance. In business for six decades, Levin is one of the nation’s leading retail real estate services firms, with a strong focus in the northeastern United States and an owner’s approach to the business. Levin provides leasing, property management, accounting, construction management and marketing services for properties ranging from neighborhood, community, lifestyle and power centers, to enclosed malls, street retail, downtown stores and mixed-use projects in New Jersey, New York, Pennsylvania, Massachusetts, Virginia and North Carolina. The company specializes in repositioning, retenanting and renovating retail properties – areas that have become particularly vital for today’s institutional and individual property owners.