By Joshua Burd
Brick-and-mortar retailers are largely optimistic about their prospects this year, according to an annual survey by Levin Management Corp., amid easing concerns about labor shortages and momentum built during a strong 2022.
The commercial real estate services firm, which is based in North Plainfield, said 76.5 percent of participating store managers reported that sales in 2022 matched or exceeded the prior year. That represents an all-time high in the history of LMC’s Outlook Retail Sentiment Survey, now in its 12th year.
What’s more, nearly 70 percent of participants said they are optimistic about store performance in 2023, the survey found, while just over 28 percent said they anticipate their company will open new locations in 2023. That optimism came despite ongoing uncertainty tied to inflation and economic headwinds, LMC said.
“Brick-and-mortar retail had an impressive year,” said Matthew K. Harding, LMC’s CEO. “Beyond the survey metrics, the evidence is clear at retail properties — especially open-air shopping centers along main retail corridors here in the Northeast — which have fewer vacant storefronts and an array of new brands side-by-side with established favorites.”
In a sign of resiliency amid the growth of e-commerce, survey participants said customer service and support was their top advantage over online retail, LMC said. Another differentiator was the social experience of in-person shopping, the survey found, while nearly 40 percent of respondents say their companies have recently adapted or have plans to adapt their business model to maintain or improve their competitive advantage.
Additionally, nearly 80 percent of those embracing change have increased training and focus on customer experience, LMC said. More than half have introduced new or updated loyalty or incentive programs.
The firm noted that survey participants seem less concerned about pandemic-era labor shortages, following peak job openings in mid-2021. Only about 23 percent of LMC survey respondents said they anticipate labor availability will affect their business significantly in the coming year.
Just under half of the survey respondents are in hiring mode, compared to 62.6 percent in the 2022 Outlook survey, LMC said. Of that cohort, 56.3 percent report it is harder to find qualified job candidates than in the past, down from 70.9 percent in last year’s poll.
This drop tracks with U.S. Bureau of Labor Statistics data, which recorded monthly job openings under 1 million through most of 2022.
The LMC survey also found that economy and consumer confidence was the leading driver likely to impact performance in 2023, according to 68.1 percent of participants, followed by inflation and rising prices and supply chain and inventory availability.
Over the past year, more than 80 percent of LMC survey participants have raised prices due to inflation, according to the findings, but about half said they have increased less than 10 percent. Of those who have implemented a hike, more than one-third expect to raise prices further, while about half are not sure whether inflation will spark further increases.
“Today’s changeable climate — with its related anticipations and uncertainties — can be felt throughout the business community,” Harding said. “Yet while a sluggish economy could slow retail sales growth, and inflation-strapped consumers may feel the pinch on their spending power, this industry is well positioned to enjoy continued progress in 2023.”
