Alex Rodriguez
Director, GRS Group
(404) 863-5237
[email protected]
It’s difficult to forecast anything but a strong holiday season for retailers, considering that the United States is experiencing a 49-year unemployment low. Wage growth is finally catching up as well, hitting the highest it’s increased in about a decade.
A recent Marcus & Millichap report said that these metrics, along with an 8.2-percent jump year over year in consumer confidence and a four-month average retail sales bump of 5.8 percent, mean commercial real estate observers can expect stores to perform well.
The firm reports that discretionary items, such as electronics and appliances, are moving faster out of stores, and purchases aren’t just being made online. It also points to continued success at off-price chains Ross Stores and T.J. Maxx. Says the Marcus report: “Consequently, many retailers are optimistic, raising their 2018 outlooks as they expect to record strong holiday sales for the second consecutive year.”
A report by RetailMeNot breaks down the consumer holiday trends it expects. Its survey found that 60 percent of shoppers plan to hit stores before Black Friday. Meanwhile, from Thanksgiving through the following Sunday, they expect to spend $60 more than they did in 2017.
The coupon company’s research also found that most respondents (67 percent) plan to spend their holiday gift money at department stores, followed by 60 percent at online-only outlets. Luxury retailers only picked up 14 percent of the votes.
The National Retail Federation’s annual prediction has sales increasing from 4.3 percent to 4.8 percent. Its prediction is lower than last year’s rise of 5.3 percent but bests the average annual five-year rise of 3.9 percent. NRF’s economists point to the strength of the overall economy as the main reason for this year’s increase but point to trade wars as being a possible barrier to growth.
Holiday retail sales accounted for 30.1 percent of total 2017 revenues for toy and game stores, NRF found. That sector was followed by jewelry stores, at 28.1 percent, and department stores, at 26.9 percent. Meanwhile, the NRF predicts that retailers will add between 585,000 and 650,000 workers for seasonal holiday employment, giving a further boost to the economy and consumer shopping power during this important time of the year for retailers.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.