Stores closing left and right, but NJ retailers optimistic about 2018
Coming off a positive year and holiday season, retailers within Levin Management Corporation's 100-property portfolio are optimistic about what 2018 will bring.
Matthew Harding, president of LMC, the North Plainfield-based commercial real estate services firm, says more than 64 percent of respondents saw higher sales in 2017 and 68 percent are feeling optimistic about 2018. Strength of the economy and low unemployment helps.
Also, "the holiday sale season is a strong gauge for retailers on their plans and their optimism for the coming year," says Harding.
While many stores closed in New Jersey in 2017, Harding predicts there will be more store closings and bankruptcies in 2018. But he says that's an evolution of retailers that perhaps haven't adapted or maybe are more vulnerable to competition from e-commerce.
The ability to prosper in today's increasingly digital and mobile world requires retailers to embrace change. Nearly half of LMC's 2018 Outlook survey respondents say they have adapted their business model in response to the growth of e-commerce by heightening their focus on technology and service.
"Take a look online. Pick what you want. Have it in the store. Go try it on. If you like it, you buy it. If you don't, you don't. So, really making things convenient and easy for customers is the name of the game," says Harding.
In the last three years, there has been a strong continuing trend of adoption of e-commerce or digital technology for retailers to reach customers, according to Harding. They use it to build a business and reach customers.
He also says what is very exciting to understand is that nearly a third of the tenants in the LMC survey plan to open new stores in 2018. So as stores are closing, stores are opening as well.
While there were no real red flags in the survey, there was a hiccup, says Harding. He says hiring is more challenging as the unemployment rate has dropped. There has, however, been a little tick up in the unemployment rate in New Jersey.
LMC'S next Retail Sentiment surveys will be conducted in May, exploring year-to-date performance and technology issues and again in October/November, gauging expectations and plans for the holiday season.
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