Bruzzone Strategics

Retailers' Closings: BestBuy, Pennys, Sears, Office Max and Depot...

SAN FRANCISCO, CA --  A new year and predictions of significant store closings from America's largest retailers, including Best Buy, Sears and JC Penny's.  From 24/7 Wa;; Street:

"For many retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many. Most recently, Barnes & Noble Inc. (NYSE: BKS) decided it had too many stores to maintain profits. Its CEO recently said he plans to close as many as a third of the company’s locations.

"Several of America’s largest retailers have been battered for years. Most have been undermined by a combination of e-commerce competition, often from Amazon.com Inc. (NASDAQ: AMZN) and more successful retailers in the same areas.   Here's the List...

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Brick and mortar retailing working in tandem with online retailing

SAN FRANCISCO, CA-- It doesn’t have to be a battle to the death, between store-based and internet-based retailing.  The two models are increasingly working in tandem. 

For example, retails stores are becoming convenient pick-up centers for those ordering on the net  --- mini-distribution centers for the internet.  Toys  ‘R Us Chairman Jerry Storch made this point, during an interview on CNBC’s “Squawk Box.”  He said the purchase online/pick up at the store model has flourished for his company. 

Promising rise in new store openings

SAN FRANCISCO, CA --   RBC Capital Markets, which tracks 2,000 chain stores, is reporting that U.S. retailer store-opening plans have hit a four-year high in July 2012.  Retailers plan to open 78,325 stores over the next 24 months.  The Dollar stores, specialty burgers, and Subway lead the charge to launch branches in now dwindling prime retail space.

COMMENT: The metrics retailers use to plan expansions are growing increasingly more complex with the vast data inputs, matched with macro analysis.  What with the emphasis on value retailers and fast foods, it portrays an economy and consumer still deeply affected by the last few years of economic drifting but willing to spend, if the price is right

RT: Investing in certain grocery-anchored centers no longer a riskless venture

SAN FRANCISCO, CA -- Grocery Anchored centers, have been considered recession-resilient. However, the darling of retail investors -- institutional and private -- has lost its lustre.  That's the core thesis of a Retail Traffic post, "Grocery-Anchored Shopping Centers No Longer the Safest Bet in Retail.".

But it doesn't apply to all grocers or grocery anchored centers. High-end grocers are expanding (and forcing major mid-market grocers to adapt.)

"traditional mid-market grocers as a group have all but stopped growing, notes Ryan McCullough, real estate economist with the research firm the CoStar Group. According to an index McCullough put together, since 2007, the amount of new leasing traditional supermarkets have done by square footage has declined approximately 60 percent. During the same period, high-end grocers expanded their square footage by 72 percent. Earlier this week, Whole Foods executives talked about growing to as many as 1,000 stores in the U.S., including in smaller markets.

While we believe the RT assessment of mid-market grocers doesn't apply to all regions, it does serve as a barometer of the CRE market.  Namely, all real estate investment decisions must include a thorough review of the local retail market -- which should include sales tax analysis, always a useful tool in this regard.

SF Giant's Social Media Model: Lesson for all Retailers

SAN FRANCISCO, CA--  In this interview, published by Mashable, San Francisco Giant's Bryan Srabian first director of social media gives his take on how this sports team is creating an interactive community that goes beyond the traditional fan experience.  It's one model that retailers and companies are using, but in this case, the enthusiasm inherent in a sports team is taken to the next level(s) through the maze of social media.

 

Digital Retailing: Macy’s, Sephora and Michael Kors as Facebook ‘geniuses’

New York  -- Macy’s, Sephora, Michael Kors and Lancome were ranked as Facebook “geniuses” in the second annual L2 Facebook IQ Index  The study, released attempts to quantify the Facebook competence of 100 iconic brands across beauty, Fashion, specialty Retail, and Watches & Jewelry.  --measuring digital strengths and weaknesses.  More

Comment: Brick and mortar shopping center investors should appreciate the brand loyalty, customer interaction, and shopping buzz afforded by carefully management Facebook presences.  Driving customers and creating a virtual community only enhances the in-store experience.  Encouraging to see Macy's, a icon of American department stores, transitioning into the digital century.

Hot Leasing Pockets: San Francisco

SAN FRANCISCO, CA -- Several reports highlight high-tech centers like San Francisco with rising rents, and major leases.  It's unclear at this point if it points to tends to come for the overall market, or anomaly in this sluggish economic recovery.

From Colliers International, Class-A rental rates across all markets averaged $48.87 per square foot, up from $44.56 in fourth-quarter 2011,in the  first-quarter office report for San Francisco; class-B rates rose from $38.18 to $40.29 during the same time period. Class-A financial-district rental rates rose from $43.56 to $49.65 during that time, while class-B rates in this submarket rose slightly from $36.03 to $36.85. Demand and rent growth are being driven largely by technology growth—specifically, social media, search engine and cloud computing companies such as Twitter, Zynga, Salesforce, Yelp, Google and LinkedIn.

Impulse buying pumps 70% of U.S. economy

SAN FRANCISCO, CA --  A new study shows the power of impluse buying by shoppers.  Since 70% of the U.S. economy relies on consumer spending, the study is significant.

"Our data shows that 61% of off-list shoppers purchase an additional one to three items," said Craig Elston, senior VP, Integer. "This shows that if you reach a particular shopper at the right moment with the right message, for example — using in-store signage to play into their desire to pamper themselves — it can end with that item being added to their basket."

The study by The Integer Group and M/A/R/C Research found that, despite the us of shopping lists, nine out of 10 shoppers still buy items not on their list. More

 

The Fickle American Consumer: Slightly more Pessimistic in March

SAN FRANCISCO, CA -- As leading real estate brokerage firms issue reports on the puzzling economy and the slo-mo recovery, all eyes, private and institutional, remain focused on the American consumer. So here's the Conference Board most recent polling results..

New York -- The Conference Board said Tuesday that its Consumer Confidence Index pulled back slightly in March, to 70.2, down from 71.6 in February.

The Expectations Index declined to 83.0 from 88.4 in February as consumers became less optimistic about the short-term outlook.

Slowing Income & Spending Levels Cloud Economic Outlook

SAN FRANCISCO, CA--  I wrote a short political commentary warning about a possible spike up in unemployment last month based on a recent Gallup employment poll.  This report is a more comprehensive Picture from the CapitalSpectator.  It also makes a case on a possible slowing of the "recovery". Examples:

"The inability of new claims to continue falling is a fresh sign of trouble ahead.."or

"the year-over-year percentage changes for Personal Consumer Spending and Personal Disposable Income continue to decelerate. horizon."

via www.capitalspectator.com