As the holiday shopping season swings into full gear, retailers are enjoying robust sales and remain optimistic that consumer spending will hold steady.
Shoppers are willing to spend this holiday season, according to a survey conducted by the International Council of Shopping Centers (ICSC) and Goldman Sachs. Close to a quarter of consumers surveyed said they plan to spend more on holiday gifts this year versus last year. Another 40 percent indicated that they intend to maintain the same level of spending as the year before.
ICSC also reported that retail sales were up 4 percent from the previous year during the week of Thanksgiving, which includes “Black Friday.” With 32 days this year between Thanksgiving and Christmas, retailers are hoping that momentum can be sustained.
For retail REITs, that means increased activity at their properties. David Henry, CEO of Kimco Realty Corp. (NYSE: KIM), and Chris Weilminster, senior vice president of leasing at Federal Realty Investment Trust (NYSE: FRT), say they’re looking forward to a healthy shopping season and noted that the industry is “cautiously optimistic.”
“It’s the million dollar question,” Weilminster said. “I think it started off very well, and we are cautiously optimistic that it will be another net positive holiday season.”
Federal Realty’s retailers reported that foot traffic was up 150 percent during the Black Friday weekend. Retailers continue to report strong foot traffic and sales, he said.
“I think that, in general, there is more consumer confidence. A lot of people were very reserved in their spending with the talk of the fiscal crisis and the election,” Weilminster said.
“I do think there’s a momentum to the recovery in terms of consumer spending and the shopping center industry and we hope it maintains the momentum. So, we are cautiously optimistic about the holiday season,” said Henry, adding that back-to-school season, another big time of the year for consumer shopping, was favorable to years past in terms of same store sales growth.
Weilminster pointed out that retailers have become more sophisticated in their use of technology.
“Retailers are on their game and are getting much better at merging the Internet side of their sales business with the bricks-and-mortar stores,” he said. He noted that stores are figuring out ways to make their websites user friendly as shoppers use them as an education process so they know what they’re going to buy when they come into the store.