Despite the store closures of large retailers like Sears and the recent market departure of toy retail giant Toys“R”Us dominating the headlines, retail industry experts look towards the upcoming year with optimism. “The retail industry in 2019 continues to look quite good, actually,” John Chang, senior vice president of research services at Marcus & Millichap, concluded from his analysis of retail property data.
“When we look at how much money people are spending on consumption, it’s actually well above average and it has been above average over several years now,” Chang said. But, he added, buying habits have changed, and both local and national retailers have to keep up with consumer trends to stay relevant. As superstores have continued to fold across the country, smaller-scale and localized concepts have seen increased success.
“We see a lot of these stories in community centers,” Chang said. Smaller retail centers often paired with non-retail services such as medical providers are the new one-stop-shop for consumers, replacing large-scale malls and superstores. “Those kinds of retail centers, especially those that are well located, the outlook for those continues to be very strong,” Chang pointed out.
The success of smaller shopping centers falls in line with a national trend towards smaller store sizes, especially in urban areas, and product offerings that are increasingly tailored to a neighborhood’s demographics, according to CB Insights’ 2019 Retail Trends report. The tech-focused market research company found that even large-scale retail enterprises like Target and Ikea have been adding more locally customized, low square footage retail spaces to their portfolios.
In addition, both digital retailers and traditional mall operators are looking towards experience-oriented retail concepts, according to CB Insights. From napping pods offered by online mattress retailer Casper in New York City, to a coworking space and gym at the Scottsdale Fashion Square mall in Arizona, retailers are experimenting with offerings beyond traditional sales goods to increase brand awareness and maximize the time customers spend in their retail spaces. Courses and workshops on product use are also a popular option, the report stated.
Investors may still feel squeamish about retail, Chang admitted, as the disruptions caused by e-commerce and the demise of large brick-and-mortar retail spaces continue to dominate media coverage of the industry. “But overall, retail properties are generally performing favorably,” Chang said. “The bigger challenge for retailers is actually finding good, quality space, because vacancy rates are really quite tight,” he explained.
“Once they are open, the overall trend in retail is still looking good,” Chang said. In written responses, local retailers were equally optimistic about their futures, especially as the tourism sector in Long Beach continues to grow, bringing more consumers to shopping and dining destinations like The Streets, The Pike and – once completed – the 2nd & PCH shopping center.
Property Manager, Shoreline Village
Experts are predicting retail growth for 2019 but at a slower rate than the past few years. Downtown Long Beach, specifically the Waterfront, has location on its side. The beautiful views at Rainbow Harbor continue to attract locals and tourists. Long beach tourism is thriving and I expect 2019 will be the same. The Downtown residency population is growing with new apartments and more under construction. Most of these apartments are high-rise style and when residents are looking to be outdoors what better backyard to play than the waterfront. Shoreline Village 2018 sales numbers are still being tabulated for year, but quarter by quarter showed growth rates from 7%-9%. Evermore consumers are demanding technology and to be entertained. Shoreline Village is meeting this demand by providing free wi-fi, live music, and interesting places to shop and dine. We are adding prepaid parking kiosks and Pelican Pier is installing kiosks to load loyalty cards for convenient return trips to the gaming arcade. The expansion of the Aquarium of the Pacific will increase foot traffic along the esplanade for our small business carts. So, while I recognize that the uncertain political and economic forces can affect our retail sales, the Downtown Waterfront has so much to offer that I am optimistic about the continued success.
Owner, Prism Boutique
It is my feeling that 2019 is going to be a little bit tougher for retail and small businesses. More and more people are shopping online with big box powerhouse retailers. It’s convenient, but if people don’t support stores in their local communities, they won’t be able to exist. Shopping local does make a difference. Brick and mortar retailers need to go above and beyond to make a unique environment, connect with their customers, and give the service that you won’t get online or at a chain store. Hopefully consumers realize the importance of small businesses, and choose to shop small in order to keep these businesses alive and thriving in their communities.
Managing Partner of Millworks, Owner of MADE by Millworks
We were happy to read that Fast Company recently declared the 2018 retail Armageddon officially “cancelled.” The backlash against the big e-commerce and, thankfully, a shift in conscience for sustainable and local, plus a yearning for an experiential shopping experience has kept people on the streets in search of a new retail. Malls are being reimagined, technology and brick & mortar are being married, and retail must respond. It must respond with personalized, easy-to-navigate experiences that meet the needs of a digital expert who longs for the kinesthetic and social aspects of “in-person” shopping. This comes as great news for Made, at 240 Pine, #dtlb. This existent philosophy; to support the local economy, personalize and socialize the experience, and remain flexible to needs and wants of our community, and travelers alike, was already firmly in place. Our growth area for 2019 will be layering technology so the LB makers that make Made home can share with the world-wide shopping community and we can further our mission to support the local DIY, home-kitchen, or creative community from our home base. Watch for the opening of our new “locals-only” beer and wine bar by close of 1Q and more art, music and social shopping events on the horizon.
Owner, Sweet Jill’s Bakery
I feel the retail industry in Belmont Shore will not be much different in 2019 compared to 2018. We will continue to see retailers lease new space and others continuing to terminate their leases as rents continue to escalate. We have seen a lot of new businesses coming to Belmont Shore this past year and expect more retailers to join the crowd in 2019. The new retail development that will open in 2019 on the corner of 2nd and PCH should only enhance the Belmont Shore crowd as people enjoy the leisurely strolls along Second Street. Belmont Shore will continue to cater to the local community and the newcomers who enjoy all the stores in the immediate area and the promotional events. Many of the owners have upgraded the appearance of their storefronts, which is attractive for the retailers and customers while shopping. We expect the economy to be healthy again in 2019 and that will only benefit the retailers in Belmont Shore.
Managing Member of Shooshani Developers and Owner of The Streets
The retail industry continues on an upswing both nationally and locally. According to the National Retail Federation, retail industry employment in December increased by 15,200 jobs seasonally, adjusted from November and 37,600 jobs unadjusted year-over-year. The retail gains, which exclude automobile dealers, gasoline stations and restaurants, came as the nation added 312,000 jobs overall, reports the Labor Department. Closer to home, Long Beach Exchange at Douglas Park is now open and continues to welcome new tenants, SteelCraft in Bixby Knolls is receiving great fanfare and Second Street in Belmont Shore is shining from its recent refresh. Downtown enjoys the success of amazing occupancy rates in several destination retail areas including the Pike and Shoreline Village at 90 percent; East Village at 98 percent; and The Streets at 90 percent. In addition, more than 95 percent of ground floor retail in the Downtown area is now occupied. Opening at The Streets in 2018 was AMMATOLI, Burgerim, Long Beach Coffee & Tea, Loose Leaf Boba Company, Pine Avenue Parklet, Pinot’s Palette, Plant Junkie, Poki Cat, Table 301, The ThickShake Factory and 4th Street Parklet. In 2019, we will celebrate the openings of Portuguese Bend Distillery, Natural Culture, plus many more. Long Beach retail industry is thriving and The Streets continues to grow with more than 40 retail stores, specialty shops, entertainment venues, and dining outlets.