Innovative Retail _Transforming the Shopping Experience.pptx
The Shopping Center Group Retail Trends and Best Practices for Recruitment.
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Transcript of The Shopping Center Group Retail Trends and Best Practices for Recruitment.
The Shopping Center GroupRetail 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
SPENDING HABITS
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 willimprove 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
CONSUMER CONFIDENCE
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”
RETAIL INVESTORS’ INTEREST
YOU WANT THESE
GO AFTER THESE FIRST
VALUE ORIENTED
RETAIL AS ECONOMIC STIMULUSRetail / Restaurant Average Annual Sales Local Collection 2.75%
WalmartKroger
$ 68,000,000$ 22,000,000
$ 1,870,000$ 605,000
Applebee’s Arby’sBlimpieBurger KingDairy Queen
$ 2,500,000$ 900,000$ 1,434,000$ 1,100,000$ 500,000
$ 68,750$ 24,750$ 39,435$ 30,250$ 13,750
KFCKrystalHuddle HouseLogan’sMcDonalds Pizza Hut Subway CVSWalgreensStage Stores (Peebles, Bealls)Auto Zone Big LotsDollar TreeFred’s
$ 980,000$ 980,000$ 513,000$ 3,250,000$ 2,100,000$ 729,000$ 400,000$ 7,250,000$ 9,400,000$ 2,300,000$ 1,500,000$ 3,400,000$ 1,800,000$ 2,600,000
$ 26,950$ 26,950$ 14,108$ 89,375$ 57,750$ 20,048$ 11,000$ 199,375$ 258,500$ 51,750$ 41,250$ 93,500$ 49,500$ 71,500
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