The International Council of Shopping Centers’ Western Division Conference was recently in San Diego, and among the GRS Group professionals who attended was Kevin May, a business development director with the firm. He noted from the event that it’s not enough for retailers and shopping-center owners to create spaces simply where money changes hands for goods. With the formidable rise of e-commerce in the retail industry, merchants and landlords need to take an extra step to get consumers inside stores and centers. People want more than products. They expect an experience, and a place where they can engage and be entertained. May touched on this, the grocery industry, a thrifty consumer and other topics he observed on the floor at the ICSC Western Division show.
What is the main retail trend you heard about in San Diego?
Retailers and developers are both on the same page in understanding that they need to do more than just open a traditional store and wait for customers to come in and buy goods. Consumers have so many options today, and with the Internet making it so easy for people to just shop from home on their computers or from anywhere on a mobile device, retail real estate operators really need to make an extra effort to bring in traffic. That’s where experiential retail comes in. Shoppers now want to go to a place where they can have an interactive experience. Look at Apple. Everything in their stores can be bought online, but its stores are packed because people want to go there for the experience
Restaurants are part of this experiential tenancy as well?
Very much so. Retail real estate landlords are increasingly leasing out space to eateries. There are so many new and exciting restaurant concepts out there right now that are undertaking some serious expansion plans. Not only do they bring lunch and dinner-time traffic, but often people dining at a shopping center will linger and buy apparel or housewares before or after their meal.
Value retail performed well during the recession because the consumer was very cost conscious. Is that still the case?
Absolutely. The dollar stores are expanding like crazy still, and off-price apparel sold by stores like T.J. Maxx and Marshalls is still very strong. Additionally, on one panel outlet centers were mentioned as the types of developments we will see the most of in the future. This is all due to a consumer trained to look for deals as a result of the uncertain economic times we have seen over the past decade.
There is a lot of talk about the grocery sector. What are you hearing?
The grocery sector is super competitive right now, especially in California. Discounter Aldi is making a serious push here. Trader Joe’s is very strong. Additionally, there are are upscale chains like Whole Foods and Sprouts Farmers Market that have strong sales, as well as regional upscale chains that have strong local followings. We are also seeing dollar stores, drug stores and discounters such as Walmart and Target offering more groceries. This has put a lot of pressure on the traditional national chains such as Safeway and Albertsons. Consumers seem to be zeroed in on convenience, price or the experience that an upscale chain can provide. Instead of going to one store for all of their shopping needs we are seeing more people go to several outlets for different products.
What can GRS Group offer its current and potential retail clients?
Our Global Services Connection allows us to perform multiple services seamlessly, via a single point of contact, regardless of where a project is located. We do everything from financial advisory at GRS | Centaur, title insurance through GRS | Title, environmental and property condition assessments, ALTA Surveys and zoning reports and much more through GRS | Corteq.