Despite the recent lack of growth in consumer spending, New Jersey's brick-and-mortar retailers plan to open more stores and increase hiring in the second half of the year, according to a survey by retail real estate services firm Levin Management Corp.
"The modest but steady improvement in their sales corresponds with what we've seen with leasing activity being strong," said Matthew K. Harding, president and chief operating officer of Levin Management, in North Plainfield, which manages 35 retail properties in New Jersey. "Last year, high gas prices impacted their confidence, but now that those prices are moderate, it helps a little bit with sales and it helps consumer confidence."
According to the survey, 64.2 percent of Levin's tenants reported their 2012 mid-year sales were the same or higher than the first half of 2011 — an increase of nearly 15 percent from last year's survey. As a result of higher sales volumes, 26.2 percent of respondents indicated hiring more staff since Jan. 1 — compared to 12.6 percent in 2011 — and 36.1 percent expect to hire in the next 6 months, since 91.4 percent believe sales will improve or remain the same in the second half of the year. To accommodate more sales and staff, 27.5 percent of the 250 tenants polled will open new stores this year, compared to less than 20 percent who indicated they would in 2011.
Although store owners stocking large appliances have cited that online retailers are negatively impacting their sales and expansion opportunities, Harding said the "impact of e-commerce isn't equal across the board," noting "quite a few respondents said it's a positive thing, and they're using e-commerce for marketing to help drive sales into their brick-and-mortar locations."
"While we still have a way to go, the numbers clearly have improved," Harding said. "There was a period of time when retailers were not expanding at all, but we're seeing a pretty good response in absorption now. Our surveys have turned out to be a pretty good barometer of what's to come, and we anticipate continued steady growth."