U.S. mall owners are doing everything they can to turn the back-to-school shopping season into a success, but their sales projections are falling short of ICSC and NRF forecasts.
Earlier this summer, ICSC forecast a 5.4 percent year-over-year increase in same-store sales between mid-July and mid-September, while NRF forecast an 11 percent increase. Back-to-school sales registered declines during the past two years, including a 2.8 percent drop in 2009.
This year is shaping up better at properties that have already started running back-to-school promotions and many landlords expect to see increases in same-store sales across their portfolios. But their projections tend to be more temperate than those of industry trade groups. For example, Judy Trias, vice president of retail marketing with Pennsylvania Real EstateTrust (PREIT), a Philadelphia-based retail REIT with a 26.7-million-square-foot portfolio, says the firm will consider this a good season if it sees sales increase between 3 percent and 4 percent over last year.
Same-store sales might hit ICSC’s target, but don’t seem likely to come close to the 11 percent figure put forth by the NRF, adds Elizabeth Allen,manager for the Avenue Carriage Crossing, a 732,389-square-foot lifestyle center in Memphis, Tenn. owned by Cousins Properties. (Cousins is a diversified developer based in Atlanta). ICSC’s projection is also more in line with the expectations of CBL & Associates Properties Inc., a Chattanooga, Tenn.-based regional mall REIT with 82.6 million square feet of space, and Glimcher Realty Trust, a Columbus, Ohio-based regional mall REIT with a 20-million-square foot portfolio.
Landlords foresee a modest increase in sales because consumers have not yet come back to their pre-recession free-spending ways.
“I think the ICSC and the NRF have put out some pretty optimistic numbers, but they are also comparing against very tough numbers last year,” says Michael P. Glimcher, Glimcher’s chairman of the board. “I am always a little conservative, so I think it’s going to be somewhere in the single digits. We are seeing traffic increases at our centers year-over-year and every month we see more of that traffic converting to sales, but until we see a [full] year of positive trends, we are just going to be cautious.”
Shoppers continue to be focused on value and that has created an opportunity for landlords to calibrate back-to-school marketing campaigns to fit their mood, notes Joe Bell, director of corporate communications with the Cafaro Co., a Youngstown, Ohio-basedmall operator with 32 million square feet of space. Most mall owners will still be running traditional back-to-school programs like fashion shows and concerts to lure teenagers to their properties. But they will also put a heavy emphasis on savings.
PREIT will offer shoppers a free school supplies package with every $75 spent at its malls. The package will include loose leaf paper, several notebooks, a pocket folder and a pack of pencils.
The Avenue Carriage Crossing conducted a Memphis Idol competition on July 20 aimed at people between the ages of 15 and 24, which make up the bulk of back-to-school shoppers. The Avenue Carriage Crossing teamed up with the local Fox13 television station and the FM100 radio station to provide one lucky winner with a guaranteed American Idol audition in New Orleans, complete with freeaccommodations and $500 in spending money.
Cafaro is running a marketing campaign that encourages parents of high school and college students to buy their kids Cafaro gift cards instead of accompanying them on back-to-school shopping trips. Gift cards allow parents to avoid the stress of shopping with teenagers while also setting a cap on spending. In addition, the cards enable parents to monitor what’s being bought by tracking receipts online, Bell explains.
Landlords are also building promotions around tax free shopping days. For instance, CBL & Associates operates 53 centers in states that will offer a 9 percent tax discount on back-to-school items during two- and three-day periods in August and September. To capitalize on the momentum, CBL has been advertizing store specials that coincide with the tax free shopping days on its mall websites, as well as getting the word out to the local media that consumers will be able to save some money if they decide to shop on those days.
“Tax free shopping is going to be a huge factor for us,” says Barb J. Faucette, vice president of corporate mall marketing with CBL. “People will drive 50 to 70 miles” to take advantage of that.