Shawn Massey, CCIM, SCLS

Shopping Center Group CEO Birnbrey on current retail landscape

Shopping Center Group CEO Birnbrey on current retail landscape

Memphis Business Journal by Andy Ashby, Staff writer

Date: Thursday, November 15, 2012

http://www.bizjournals.com/memphis/news/2012/11/15/shopping-center-group-ceo-birnbrey-on.html

While it’s seeing a rebound, the retail real estate landscape is changing as retailers are taking smaller spaces while battling online sellers for consumer dollars.

David Birnbrey, chairman and co-CEO of the Shopping Center Group LLC, outlined the past, present and future of retail during a CCIM/SIOR joint luncheon Wednesday in Memphis.

Retail real estate is a very dynamic and treacherous industry because many market conditions are out of the industry’s control, according to Birnbrey.

“We’re constantly worried about whether our industry will be around,” he said.

Internet retailers have been eating into traditional retailers’ sales for some time, partly because they’ve been largely exempt from sales taxes. That field could be leveled as the federal government considers changes to the tax law.

One of the most vulnerable products is commodities, which are items that can be purchased anywhere. In a store, consumers can scan these products’ QR codes with smartphones and find a better deal online. The industry calls it “showrooming.”

Some retailers are matching Internet prices, which impacts their margins. They are also using unique QR codes to discourage online comparisons.

While the Internet is impacting brick-and-mortar retailers, the industry isn’t going away.

“We know retailing will never be dead,” Birnbrey said. “People like to touch and feel.”

But what national retailers are doing is coming up with smaller footprints.

For example, PetSmart now has a 6,000-square-store model, where the average used to be 18,000 square feet.

Retailers aren’t carrying all their products in-store, relying more on warehouses to fill orders placed from e-commerce within their own stores.

Retailer categories are also narrowing. Whereas a certain product field might have had three national competitors, that number has dwindled to one or two. For example, when Linens N’ Things went out of business, it boosted Bed, Bath and Beyond’s sales.

Companies are also combining their concepts. Birnbrey said people will start seeing more Gap and Banana Republic combo stores, brands that are both owned by parent company Gap Inc. (NYSE: GPS).

In today’s retail real estate world, dollar stores are doing very well, as are liquidators and closeout stores. Restaurants are coming back, but they’ve found they have to add to their experience. Service retailers are also holding up well.

As Birnbrey said, “There is no substitute for a dry cleaner.”

Andy Ashby covers commercial real estate; transportation and logistics; construction; and Downtown Memphis. Contact him at aashby@bizjournals.com

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Cheers,

Shawn

Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis, in 2013 Shawn will join the faculty of the Homburg Academy teaching on-line real estate classes world-wide and is also co-founder &Chairman of the Board for the Memphis Business Academy charter schools (K-12th grade) in the Frayser area of Memphis.  

For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business.  We understand that representation is a privilege and that you have a choice!

The opinions expressed in this post are entirely my own.  They should not be considered the opinion of The Shopping Center Group, LLC in which I am associated.

 

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