Shawn Massey, CCIM, SCLS

Weekly CRE and Retail Article Round-Up – January 3rd, 2013

I hope you had a good New Year’s! Good Luck in 2013
Newk’s Express Cafe Sees Big Year in 2012, Growth in 2013
The Uselessness of Economic Development Incentives
Young Broker Learns How to Work His Leads
Walgreens executives outline growth strategies at annual meeting
Chain Store Age 1/11/2012
What My Real Day Of Commercial Real Estate and Social Media Looks Like.
Poverty industry has $5 bn. local impact, study finds
Memphis Business Journal
Who Says A Landlord Should Restore After A Fire?
Letter: No mandate for unity
Nashville may steal food capital title from Charleston, paper says
In commercial real estate, favorable business climate could drive deals
A Fine Forecast for Full-Service in 2013
12 CRE Predictions for 2013
Have We Finally Turned the Corner from the Great Recession?
By Mark Heschmeyer
How To Immediately Increase Cell Tower Rents
Coffee Break: Real estate offices planned for Memphis area Walmart Supercenters
Rethinking an American icon: The shopping mall

From the desk of Garrick Brown – Terranomics Retail Newsline
Week Ending December 30, 2012

The last week of the year is always an interesting news week in that it is when you see the most summaries of past trends and forecasts for the year ahead. There are a number of good ones this week from sources ranging from Chain Store Age to Nations Restaurant News and others. If you have not had a chance to check out our forecast for 2013, you can find it online here.

Of course, being at the tail end of the holiday shopping season it (more often than not) is a pretty good news week for retail in terms of content. Not so much this year. The final tallies on the holiday shopping season are still not in and won’t be until next week. But we are seeing some individual data points coming out and so far all we see are a lot of mixed indicators. MasterCard’s Spendingpulse reported that spending in key retail categories increased only 0.7%, making this the weakest holiday sales season (in terms of growth) since 2008. Yet, we are hearing an entirely different story from most retailers and most weekly same store sales reporting seems to indicate a relatively healthy season so far. To be fair, all of these different sources are reporting different sets of numbers based on different things so none of them are apples-to-apples comparisons. But until final Commerce Department numbers are out, I suspect we will continue to see a mixed bag.

We don’t think it is likely that this year’s sales growth was the weakest since the recession, but we doubt it meets early expectations. Unfortunately, it looks like the holiday sales season may have been the first victim of the fiscal cliff. Consumer confidence fell in December and ongoing concerns over that issue are believed to be the primary cause.

If a short-term deal isn’t reached today, we will go off the proverbial fiscal cliff. An excellent paper on the impact of the fiscal cliff on commercial real estate was done a couple of weeks back by Cassidy Turley and can be found here.

Unfortunately, with a deadline of midnight tonight and no deal yet, the chances are looking slim that anything will be done pre-emptively to avert this self-inflicted chaos. Of course our policymakers are going to fail us. The fiscal cliff was put in place by them after the first debt ceiling debate. The logic was simple; we create a deadline with such draconian measures in place that it will assuredly damage the economy. This gun to our own heads will force us to work together and find some sort of compromise. And here we are, 17 months later with a gun to the economy’s head and our lawmakers about to pull the trigger, because unlike those of us who work for a living they have no concept of how to get a deal done.

Excuse my pessimism, but even if some last second deal is brokered over the course of today, it will likely not be anything but a short-term fix. Most likely anything inked today would just set the stage so that debt ceiling debate part two (which will begin in a few weeks) would simply take the place of this idiocy, casting further policy-driven shadows over the economy.

Employment growth was beginning to accelerate. The housing market recovery was truly beginning to gain traction. All of these trends were going to pick up steam in the coming year. The recovery was going to finally start to look like a real recovery. But instead, for now at least, we get to watch our policymakers play chicken with the economy and with our livelihoods.

The impact of most of the federal spending cuts and tax increases won’t be felt immediately. But there are a few things that will be felt right away. If you are one of the long-term unemployed getting by on extended unemployment benefits you will feel the pain immediately. Immediate changes in Medicare payments may result in some doctors refusing to treat Medicare patients. And be sure to go out today and stock up on milk, the disappearance of a major subsidy could cause milk prices to surge in as little as a few days from now. Those are just a few of the things directly caused by the failure of policymakers to deal with the fiscal cliff that you will see.

What will be worse in the days ahead will be the pain indirectly caused by the fiscal fiasco. This is already happening to a limited degree; lagging business and consumer confidence and a pullback in spending. The stock market will almost certainly plummet this week in the absence of a deal. This will likely cost billions. Job growth for January might actually be negative for the first time since September 2010. There will be a real human cost to this. All I can say is don’t dump your stocks in a panic—wait and watch and buy when the prices are low because, sure enough, a deal will eventually be reached. Of course, it will only come after much damage is done. It will come after, at best, our economic recovery is delayed and at worst, nearly derailed. But it will come. In the meantime, try to have a happy New Year if you can.

– Garrick H. Brown

Terranomics Top Five
More Hard Evidence Fiscal Cliff Hurting Consumer Confidence
Sober Look 12.30

Ten Big Retail Trends from the 2012 Holiday Shopping Season
Time 12.28

The Great Housing Rebound of 2012
Time 12.27

Consumer confidence tumbles in December
Chain Store Age 12.27

For Four Retailers, Do or Die
Yahoo 12.20

The Big Picture
Changes in store in 2012
LA Times 12.30

Senate Seeks Bipartisan Formula to Reach Tax Deal
New York Times 12.29

Will retailers rebound after weak holiday season?
San Antonio Homepage 12.28

Business activity: a November uptick in 45 states
Builder Pulse 12.28

Christmas Day retail visits up 27% year over year
Chain Store Age 12.28

Report: Online sales jump 22.4% on Christmas Day
Chain Store Age 12.28

Restaurant industry experts predict 2013 trends
Restaurant News 12.28

CSNews’ Top 10 Predictions for 2013
Convenience Store News 12.28

Quick-Service Restaurant Industry Eyes $188 Billion Growth in 2013
Convenience Store News 12.28

National chains move, expand as retail recovery takes hold
Sacramento Business Journal 12.28

Big-box retailers take advantage of economy to find better sites
Sacramento Business Journal 12.28

Retail innovation trends of the year
Sacramento Business Journal 12.27

2012 in Review: Signs of Recovery 12.27

Majority of workers concerned fiscal cliff will lead to layoffs
Chain Store Age 12.27

Online sales up 15.2% for the season
Chain Store Age 12.27

Year in Review: Deals, Deals and More Deals
Convenience Store News 12.27

Post-Holiday Retail Sales Are Now Key To Shopping Season Success
Forbes 12.26

Corporate Tax Rate Overhaul May Be Part of Fiscal Cliff Deal
Los Angeles Times 12.25

Top 10 most popular restaurant news stories of 2012
Nation’s Restaurant News 12.21

Year in Review: The Top 10 Convenience Store News Stories of 2012
Convenience Store News 12.21

Forecast: Value stores, luxury shops, restaurants to lead retail development in 2013
Chain Store Age 12.21

NRF weighs in on fiscal cliff
Retailing Today 12.20

The biggest restaurant industry news of 2012
Restaurant News Resource 12.13

Retailer Roundup

Microsoft Rents 230K at 11 Times Square
Globe Street 12.28

Best Buy’s new store format a ‘real upgrade’
Minneapolis / St. Paul Business Journal 12.26

Microsoft reveals six new retail store openings for 2013
Puget Sound Business Journal 12.26

Grocery Grab Bag
Murphy Oil announces deal with Wal-Mart for 200 fuel stations
Chain Store Age 12.27

Parker’s Opens 30th Location
Convenience Store News 12.26

The Restaurant Review
Fancy Fast Food
QSR 12.28

Bruegger’s Bagels Announces Expansion Plans Focused In FL, TN, AL
PRNewswire 12.27

Food Prices Predicted to Rise in the New Year

© 2006-2012 Clarity Digital Group LLC
Barbara Mader
December 31, 2012

December 30 – Ricky Volpe, of the US Department of Agriculture’s Economic Research Service predicts that inflation is going to pick up in 2013 over what has been seen in 2012. That will mean looking ahead at a year of above normal food price inflation. In a recent press release, Volpe said to expect food price inflation of 3-4% in 2013. He said the drought that affected two thirds of the country is partly to blame.

The major impact of the drought in the Midwest will lead to higher corn prices. Higher corn prices leads to higher feed prices which leads to higher animal prices, and higher prices for all animal products. Consumer can expect to see higher beef prices in particular.

“We are still faced with historically low inventory for cattle in the U.S. So we still have supply that’s low relative to demand. We have strong inflation; that’s not going anywhere, and the drought is only exacerbating that,” Volpe said.

Eggs and dairy product prices will also rise as the drought effects drive up feed costs.

“So we have these higher feed prices translating into higher milk prices, which especially in the coming months and the first quarter of 2013 we expect to see this translate into a hike in overall dairy prices. As the impacts of higher corn prices and higher feed prices translate throughout much of the year, we’re looking at egg prices to go up another three to four percent in 2013,” Volpe stated.

To see more about food prices and other USDA information, follow these links:

A new TV feature is available on the USDA FTP site. The new TV feature can also be seen on USDA’s YouTube channel and seen and downloaded as a video podcast.
Return to the City: Renewal of Inner City Retail Stores

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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 and a co-founder and 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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