Shopping centers stand by expansion plans
Despite deflated holiday sales nationwide, large-scale regional shopping centers are continuing their development and expansion plans into 2009.
As consumers spent less on holiday shopping, the retail industry capped 2008 with a depressed ending, as Black Friday sales promotions were unable to give it a much-needed lift.
According to a Dec. 4 report by the International Council of Shopping Centers, or ICSC, U.S. chain store sales for November 2008 fell by a record 2.7 percent on a year-over-year same-store basis.
The retail sales environment “was an extremely difficult one with the backdrop of the recession and financial crisis still looming large in the economy,” Michael Niemira, ICSC chief economist and director of research, said in a release.
Holiday season
Sixty-one percent of those polled in GfK Roper Consulting’s 2008 shopping study said they cut back on holiday shopping because of the current economic situation.
“It’s clear that the broader economy is having an impact on consumers and holiday shopping this year – and we’ve been prepared for this,” said Nicole Flynn, senior marketing manager for The Oaks Shopping Center in Thousand Oaks. “Retailers have continued to offer deep discounts and very aggressive promotions – and this has succeeded in bringing traffic to their stores.”
Macerich, the owner and operator of local shopping centers such as The Oaks and Santa Barbara’s La Cumbre Plaza, focused mainly on leveraging advertising, promotions and public relations to drive traffic during the sluggish 2008 holiday season, said Traci Weber Macerich senior vice president.
The GFK Roper survey also reported that 60 percent of shoppers make impulse purchases, which might have factored into retailers’ problems because another 59 percent had decided to do the bulk of their holiday shopping online.
Shoppers said they feel the Internet will help them find hard-to-get items, save money on gas, make price comparisons, avoid bad customer service and collect coupons and discounts through e-mail and Web sites.
Macerich marketing managers prepared for this onslaught of Internet shoppers by enhancing its digital strategy, using retailers in Flash banners, consumer e-mails, and online gift advertising and promotions pages targeted to its growing e-mail database. They are confident that despite the economy, people will still go holiday shopping.
Expansions continue
“There are new developments that have been planned,” said Bill and Linda Hagelis of Ventura-based The Hagelis Group, which specializes in retail real estate. “The ones that are moving forward have strong anchors.”
Westar Associates’ new College Square in Santa Maria recently completed construction and now offers 55,000 square feet of shopping and dining.Panera Bakery, Wescom Credit Union, Murray and Murray Insurance, and Me N Ed’s Pizza are the biggest retailers in the new center. Subway and See’s Candy are slated to open in early 2009.
Construction of the 287,900-square-foot Golden Hills Plaza, a $70 million Paso Robles shopping center, began in September.
The Golden Hills Plaza has about 70 percent of its space leased, with a 169,112-square-foot Lowe’s and 25,000-square-foot Bed, Bath & Beyond to anchor the project. The center was more than 90 percent leased before Starbucks, Circuit City, Chipotle and PetSmart dropped out.
Mark Peternell, vice president of sustainability for Regency Centers, said the shopping center will utilize a sustainable architecture scheme, part of the company’s “greengenuity” program. A drainage system will capture of 100 percent of onsite stormwater and low-volatile paints, and high-energy efficiency air conditioning units will be used.
“We have the opportunity to both cut costs so we can operate more efficiently and help preserve natural resources,” Peternell said. “It’s a win-win situation, and we feel sustainability and lower operating costs go hand-in-hand. It’s something you can expect to see more of in 2009.”
Looking ahead
Renovation and expansion will continue to play a key part in 2009, as it was one of the main drivers of 2008.
“The Oaks has had a tremendous year this year mainly due to the renovation and expansion that is nearing final completion,” Flynn said. “The interior and exterior was fully renovated this past summer, and the theater is slated for February 2009, bringing with it a lot of excitement to the New Year.”
An interesting new national trend is the early arrival of full-priced, spring merchandise – even swimsuits – in both department stores and specialty stores, which Flynn said doesn’t usually happen this early in the year.
The National Retail Federation asked President-elect Barack Obama to incorporate a series of national sales tax holidays into upcoming economic stimulus legislation as an important step toward rebuilding consumer confidence.
“As for 2009, something interesting the retail industry is doing is asking President-elect Obama’s administration for a series of national sales tax holidays in 2009 to help with consumer confidence,” Flynn said.
NRF said in the Dec. 23 letter to Obama that he “must implement a plan that produces sustained economic growth through job creation as well as short-term economic stimulus aimed at increasing consumer spending.”
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