LMC survey: Retailers show measured optimism, expect modest growth this holiday season

By Joshua Burd

Retailers are cautiously optimistic about this year’s holiday shopping season, with many expecting modest growth and that sales would peak before Thanksgiving and Black Friday.

Those are among the findings of Levin Management Corp.’s 12th annual Pre-Holiday Retail Sentiment Survey, which the North Plainfield-based firm released in early November. Respondents were largely measured in their outlook, as two-thirds of store managers who participated said they were optimistic about business for the holiday season, while less than 20 percent of the group expected sales to be notably higher than last year.

As LMC noted, the results align with recent reports from surveys by Deloitte, ICSC, the National Retail Federation and others.

“The industry saw record seasonal growth in 2020 and 2021, followed by impressive performance again in 2022,” said Matthew K. Harding, CEO of the real estate services firm. “All indicators point to another positive holiday period this year. That said, the crosscurrents of inflation and other economic concerns have retailers poised for comparatively modest sales increases.”

In fact, LMC survey participants ranked various drivers likely to impact seasonal performance, according to a news release. The economy and consumer confidence topped the list, followed by inflation, significantly outweighing factors such as shifting consumer expectations and shopping patterns and ecommerce growth.

LMC added that, over the past decade, its survey findings have tracked closely with the evolving trend of consumers shopping earlier for their holiday gift-giving purchases. The 2023 poll provides further evidence of that ongoing shift, finding that:

  • About 30 percent of LMC survey respondents anticipate their peak holiday sales will occur before the Thanksgiving/Black Friday weekend — a survey high.
  • The holiday weekend tied with early December, with a combined 38 percent of participants expecting their peak sales to occur in one of these timeframes.
  • Expectations of peak sales in mid-December and the weekend before Christmas tapered off considerably with a combined 19 percent expecting peak sales, marking the lowest percentages in survey history for both periods.

“It comes as no surprise that cost-conscious consumers are shopping early to take advantage of sales and promotions,” Harding said. “In general, there is a lot of discussion around shoppers doing more research and finding the best deals. And they are not waiting until the last minute, when their choices may be fewer. Additionally, Thanksgiving falls on the 23rd of November this year — the earliest possible date — which may well prompt even the more ‘traditional’ shoppers to get an earlier start than usual.”

Survey participants cited in-person customer service and support as the biggest advantage brick-and-mortar retail has over online shopping during this key time of year, LMC said. Other top benefits include the festive experience of in-person holiday shopping and the convenience and gratification of having the product immediately.

“Service, support and experience remain key hallmarks of physical retail in an evolving omnichannel holiday marketplace,” said Melissa Sievwright, LMC’s vice president of marketing. “Our tenants know this, and they are responding accordingly.”

In fact, a notable 37.5 percent of LMC survey respondents say they are leveraging new methods to enhance their customers’ holiday shopping experiences, such as new in-store customer services or loyalty programs. Meantime, nearly 30 percent say they’ve committed more resources to holiday marketing this year, with nearly a quarter of respondents saying they are incorporating new marketing tools for the season.

“Retailers know they have to do more to reach consumers and gain competitive advantage,” Sievwright said. “This is especially true during the hyper-competitive holiday season.”

 

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Author: Joshua Burd