Michael P. Niemira, chief economist of the Retail Economist LLC, said on a year-over-year basis sales “rose by a strong 4.3 percent from the same week of the prior year.”
Driving growth is strong e-commerce sales as well as the popularity of buy online, pick up in-store, which bolsters in-store conversions. But the growth is not evenly distributed across the retail market. And changes in consumer behavior is reshaping the landscape, especially from a retail real estate perspective.
In the weekly sales report, Niemira said, “Sequential week-over-week sales growth was solid over the past week as the year-over-year pace also rose to its highest reading of 2019. On a year-over-year basis, business was robust across most retail segments as the early holiday season also starts to unfold.”
The weekly sales report is tracking in line with what other economists and analysts are projecting for the entire holiday shopping season. Year-over-year sales are expected to come in between 3.5 percent and 4.5 percent. Experts say shoppers are buying more items online — notably on Amazon — while increasingly using mobile devices for purchases. They’re also turning to DTC brands, Walmart and Target and foregoing trips to traditional department stores as well as some specialty stores.
Based on these trends, retailers have shuttered doors this past year, and the industry is on track to see total store closures reach 12,000 by yearend, according to Coresight Research. As a result, the retail real estate market is working to re-imagine vacant malls and shopping centers.
Dana Telsey, chief research officer at Telsey Advisory Group, said in a research note today that, overall, “in the face of a higher number of bankruptcies in 2019 as compared to 2018, landlords are moving forward” with several strategies for 2020.
Telsey said they are adapting “their centers to new uses and appear to have a more constructive outlook” and are “leasing to new categories of tenants [e.g., digitally native, wellness, and experiential].”
Retail landlords are also “reclaiming vacant space from bankruptcies and re-leasing at higher rents” while also “managing through tenant downsizings with a focus on generating higher productivity, which leads to the potential for higher rent.”
Telsey said these efforts have shaped this year’s theme for the retail real estate sector: “reinvention for relevancy.”