Though sales growth among New Jersey brick-and-mortar retailers throughout the 2012 Christmas season was weaker than the previous year's Christmas boost, the scope of leasing activity in the state indicates the sector is on a positive trajectory, according to a survey by retail real estate services firm Levin Management Corp.
According to the survey, 65 percent of Levin's local, regional and national retail tenants reported 2012 holiday sales that were similar to or better than 2011, well off the 73.1 percent who previously said 2011 holiday sales were similar or better than 2010. Still, the number of tenants that indicated overall 2012 sales were the same or higher than 2011 increased by 5 percentage points from the previous year's post-holiday survey.
The good news comes despite the battles bricks-and-mortar retailers fought against an unstable economy, competition from online shops and Hurricane Sandy, said Matthew Harding, president and chief operating officer of the North Plainfield-based firm. Despite all that, "it appears that 2012 was a better year for retailers in our portfolio and across the board, which is good news."
However, Harding said the impact of e-commerce on bricks-and-mortar holiday sales continued to eat away at the numbers. Sixty-one percent of tenants said shopper traffic matched or outpaced their holiday sales volume last year, compared to 71.2 percent of tenants who reported the same in 2011. Additionally, 31.1 percent of tenants expect online competitors to have a larger influence on their sales in 2013, which could widen the gap between traffic and sales volume in future survey results, Harding said.
Regardless, Harding said he "continue(s) to see the growth and expansion of retailers —from locals, to regionals, to nationals — that we've seen over the last two years," as well as a high volume of lease renewals across that spectrum.
But retailers' employment practices are not mirroring the health of their leasing activity, as seasonal hiring trended down from 2011, and only 13.3 percent plan to retain holiday help as permanent staff in 2013, compared to 54.7 percent in the previous year.
"It's one thing after another in this economy that's keeping retailers cautious about making long-term hiring decisions," Harding said.