The Southeast, Midwest and Northeast remain leading candidates for retailer growth in 1998 and beyond.
Call it the E. F. Hutton effect. When retailers representing more than 55,000 stores are called upon to forecast future growth, the shopping center industry listens.
Shopping Center World's 17th Annual Retailers' Expansion Plans Survey has amassed 143 retailers reporting that, by the end of 2001, there will be 22,984 more of their stores than there are today. Furthermore, of that number, 70 percent of the stores are slated to open in shopping centers.
During 1997, the respondents opened 5,343 stores, 70 percent of which opened in shopping centers. Next year, that figure will increase approximately 2 percent to 5,446. But between 1999 and 2001, average store openings for all respondents are slated to jump to 7,661 per year.
As they have for the last two years, respondents cited the Southeast as the most popular region for expansion; 43 percent of respondents indicated future growth there. The Midwest (36 percent), Northeast (34 percent) and Southwest (33 percent) garnered nearly equal levels of interest, while the western portion of the country remained strong with 24 percent.
When retailers indicated their state-by-state growth preferences, the results were markedly different than when measured by region. An average of 29 retailers expressed interest in each of the northeastern states, while southeastern states each received an average of 21 nods. (The northeastern state with the highest number of retailer votes was New York with 51, while the highest in the Southeast was Florida with 32.)
Why is it important to separate data by region and state? The results indicate that, while respondents are more consistently interested in all states in the Southeast region, interest in two or three northeastern states is extremely high (New York, Pennsylvania and New Jersey, most notably).
When considering a larger scope of expansion, 26 percent of respondents indicated their intention to grow outside the United States (see Exhibit A). Some of the more popular regions were Canada (10 percent), Puerto Rico (6 percent), Europe (3 percent) and Asia (2 percent). Lastly, 4 percent of responding retailers noted their intention to grow on a worldwide basis, with no limits on region or country.
Regional malls continue their dominance as the preferred venue for respondents (see Exhibit B), earning 68 percent of responding retailers' interest. (Retailers were asked in this case to identify all venue types that applied to their expansion initiatives.) Power centers experienced a slight bump in retailer interest from 1996, notching an increase of 3 percent to 53 percent.
Neighborhood strip centers and community malls, which placed third and fourth in retail interest, check in at 45 percent and 33 percent, respectively. Interest in outlet centers (20 percent) and off-price centers (18 percent) was virtually unchanged from last year's survey results.
In selecting preferred growth alternatives (as with shopping center categories, respondents were asked to select all that apply), 50 percent of responding retailers noted that chain buy-outs would be an attractive expansion method (see Exhibit C). Mixed-use developments (44 percent), pad sites (43 percent), in-fill locations (42 percent) and CBDs (40 percent) also were popular growth options.
Conversely, self-development, increasing average store size, franchise development and new chain launches were selected by fewer than one-third of respondents. Surveyed retailers also indicated airports, food courts, supermarkets and entertainment centers as sites for future expansion.
In addition to opening new stores, 64 percent of respondents intend to modify their existing stores. Between 1998 and 2001, 91 respondents plan to remodel 9,372 locations in the coming years.
The 24-page, alphabetical listing of retailers' expansion plans begins on page 80. For each chain, the listings include a brief description; the chains' current store count; average store size; total stores opened in 1997; expansion plans through 2001; geographical areas of planned expansion; the type of shopping center space sought; population density requirements; expansion alternatives; remodeling plans; and a real estate contact.
Although all respondents have not provided a complete four-year forecast, all have provided data for at least one year.
Survey forms were sent in September to past survey participants. If you would like your company to be included in our 1998 retailers' survey, send a written request to Shopping Center World, Retailers' Expansion Plans Survey, 6151 Powers Ferry Road, N.W., Atlanta, Ga. 30339-2941.
BY THE NUMBERS: Shopping Center World's Retailers' Expansion Plans Survey includes data gathered from 143 respondents representing 55,062 stores (an average of 385 stores per retailer), measuring an average of 10,720 sq. ft. of GLA.
MALL MAJORITY: Of the 5,343 stores opened by respondents in 1997, 70 percent were in shopping centers.
BUSY YEAR: Respondents plan to open 5,446 new stores next year.
MALL MAJORITY II: Between 1998 and 2001, respondents plan to open 22,984 new stores, 70 percent of which will be in shopping centers.
SUNSHINE STATES: The Southeast was cited as the region most likely to experience growth, with 43 percent of respondents indicating their intent to expand there. (The Midwest came in second with 36 percent.)
SUPER REMODELS: 62 percent of respondents identified 1998 as a year in which they will undertake store renovation; 52 percent reported that they would undertake store renovation in at least one year between 1999 and 2001.
BRANCHING OUT: In addition to citing shopping centers as a growth vehicle, respondents identified airports, food courts, supermarkets and entertainment centers as areas for future expansion.