Observations & Conversations
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Overall it looks like retailers are holding their own in spite of the highest jobless claims that we’ve seen in 20 years. |
Summer is finally here and a lot of you are
taking vacation time to enjoy it. I know because thousands of you get our daily
tenant tip and I’ve gotten hundreds of auto responder email messages saying “out
of office - on vacation” for the past few weeks. I’m a great believer in play
hard and work hard, so I never begrudge anyone for taking time to smell the
roses, but it does make it more difficult to get deals done.
Everything moves along slower during the summer, simply because there’s less
“man power” and the decision makers deserve their time off too. I was in a mall
that’s usually bustling and it was dead. The sales clerk summed it up with “who
wants to be here if you could be at the beach.” However, the grocery stores are
busy, because the kids are at home and eating three meals a day, plus tons of
snacks. I live near a water park for kids under the age of twelve. Watching the
droves and droves of cars visiting it is mind boggling. I remember those days of
trying to keep my son occupied and entertained during the summer with skeeball
at the boardwalk on weekends and camp while I was at work when he wasn’t in
Texas visiting his grandparents. He recently graduated high school and moved to
Texas to start college. Since he’s been gone, I have a lot more time on my
hands. I never dreamed of being an empty nester. It’s strange. I’ve spent the
last 18 years in a noisy house with kids coming and going and never a spare
moment. I’m working hard at not being lonely for him. Now that he’s living
thousands of miles away, I have all this displaced energy that I used to spend
worrying about him (and if you asked Josh, he’d tell you that it was endless and
needless nagging!).
To ease our separation anxieties, Ted and myself went to the west coast to
lounge around, play on the beach and we looked at some shopping centers along
the way. Our trip started out in San Francisco and we visited the wharf with all
the tourist traps, plus Chinatown and the trendy shops. The boardwalk at Santa
Cruz was our second stop. Then we drove to Monterey and spent a few days
watching the waves break. We visited the shopping areas of Carmel. Then it was
on to Los Angeles and finally La Jolla. Retailing and tourism looked healthy,
but I wouldn’t use the term robust. It seemed across the board from San
Francisco to San Diego County that vacancies were apparent, but not overly
abundant. Almost every hotel we stayed at was booked, a lot of restaurants had a
wait and the amusement areas were teeming with kids, so it looks like the
economy is chugging along okay.
In a few weeks we’ll be in Orlando for the ICSC Florida Dealmaking and I expect
it to be a good show. I’m seeing lots of acquisitions in Florida and
redevelopment of older centers. A notable sale was Flagler Park Plaza, a 350,000
sq.ft. center anchored by Publix, Linens 'n Things, PETsMart, Michaels, Pep
Boys, Walgreens, Big Lots, Jo-Ann Fabrics and Office Depot in Miami selling for
$54.3 million. After the Florida Dealmaking, I plan to visit the Grande Lakes
Orlando. At a cost of nearly $600 million, the 500-acre estate is supposedly the
largest non-gaming hotel project to open in the United States this year, so it
will be interesting to see what kind of retail shops are in the complex. The
Florida economy keeps growing at a steady pace, it’s becoming less and less
dependent on tourist dollars and about 1,000 people a day move to the state.
With all this new found time on my hands, I took a look at who’s doing well so
far this summer. Big Lots saw a 9.9% comp store increase for the first five
weeks of summer and 99 Cents Only saw a 25% increase in second quarter comp
sales. June sales were up for Dollar General by 13.3%, Children’s Place was up
23%, Bebe was up 8.5% and Gymboree was up 5%. Sales for the first five weeks of
the summer for Wal-Mart rose 2.7%, Target was up 0.8%, JCPenney increased 0.1%,
Sears declined by 1.8%, Gap increased 10%, Federated Department Stores
same-store sales fell 2%, May Department Stores same-store sales slipped 5.9%,
TJX Cos. same-store sales rose 2%, Dillard's same-store sales fell 6%, Saks
same-store sales fell 1.8%, for the month of June Factory 2-U saw a 3% same
store sales increase, Charming Shoppes was down by 8%, Odd Job was down 6.1%,
Nordstrom was up 6.4%, Hancock Fabrics up 3.5%, Ross Stores up 8%, Fred’s comp
store sales were up 4.6%, Value City increased by 3.7%, Michaels was up 2% in
same store sales, Shoe Carnival saw comp sales rise by 3.4%, CVS comp sales were
up 6.9%, and Deb Shops saw sales drop by 11.7%. There isn’t one specific retail
sector doing well or poorly. Overall it looks like retailers are holding their
own in spite of the highest jobless claims that we’ve seen in 20 years.
Since there’s little for me to complain about, I thought I would share some
interesting complaints I’ve heard from retailers about their customers. Ted has
been on the Atkins diet for a while and he’s on the road at a McDonald’s eating
just the meat from a hamburger and shoving the bread off to the side. The
manager comes by and asks sincerely if there was a problem with his meal. Ted
explains that his diet doesn’t allow bread and the manager said he shouldn’t
come back to eat at McDonald’s if he’s not going to eat the bread. Next was
Value City banning two sisters from its stores because they return stuff and
complain to the store managers too often. Got a complaint about The Dealmakers,
let me know by email at ann@dealmakers.net
or call me at 609-587-6200. I promise if you voice a complaint, we won’t
retaliate and hold your issues hostage, but we might improve our product and
make things better for you.
Until next month,
Ann O’Neal,
Publisher