Retail Sales End 2010 On A Positive Note
Retail sales ended 2010 on a positive note and most retailers continued to perform well in January. Whenever you have turmoil in the economy, as we have for the past few years, change and adaptation happens as companies adjust to the new world. A few comments on some trends that began to emerge last year and continue into 2011:
1. Retailers are focused on improvement to any part of their operation that drags on profitability.
This includes streamlining operations, improving merchandising and inventory controls and closing unprofitable stores. We have seen many examples of that such as The TJX Companies converting the AJ Wright stores to Marshalls, TJ Maxx, or Home Goods rather than devote resources to a new division.
2. Adaptive re-use continues to be the main route for creating new space opportunities since there is so little ground up construction. A great example is the planned Jamestown redevelopment of City Hall East in a submarket that has no opportunities for traditional retail development.
3. Owners are concentrating on tenant mix that includes the strongest and best retailers mixing up high end and mid priced retailers. H&M and Forever 21 are adding traffic and fashion in lifestyle and higher price point centers with their emphasis on “cheap chic”.
4. Online shopping is increasingly important to retailers who are exploring all channels to respond to customer needs. While ecommerce is often discussed as a threat to brick and mortar retailers, web based programs are actually a great avenue to introduce new concepts and to create new revenue sources. The Gap bought Athleta, a catalog and online retailer offering women’s active wear for yoga and other sports. In January they opened a flagship store in San Francisco as part of a multichannel growth plan.
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