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EXPECT STRONG HOLIDAY SALES, SAYS ECONOMIST

BY DEBRA HAZEL

Holiday sales this year will probably be healthy, but not as robust as last year. So said economist Carl Steidtmann at ICSC’s New England Idea Exchange, held this summer in Boston.

Sales will rise 6 or 7 percent over last year, predicted Steidtmann, who is chief economist and director of consumer business at accounting services firm Deloitte Touche Tohmatsu, New York City. Though respectable, those results will seem paler against last year’s double-digit increases.

By some measures, “the economy is booming,” he said. “We are seeing the fastest rate of growth in 20 years.” Real home prices and wages have been falling, but job gains are offsetting that, he noted.

Yet there are hurdles to clear. Though the productivity gains of the 1980s were driven in large part by the retail sector, it’s going to be hard to build much more upon that, Steidtmann said. Furthermore, the baby boomer generation, which supported the regional mall boom of the ’80s and ’90s, is more focused these days on experiences rather than goods, he added. And if the industry wants to draw the younger generation, it must work on enhancing the appeal of the mall.

“If you look at regional malls built in the 1990s, they were generically successful,” Steidtmann said. That won’t do for today’s shopper, though. “There’s nothing in terms of local charm that will attract a new clientele.”

Besides, there are many more players competing for the consumer dollar these days, Steidtmann added.

“Even the airlines, not known for good customer service, have taken a retailer orientation,” he said. So have public agencies, which provide merchandise over the Internet.

Landlords may want to explore expanding their tenant base to include some of these new players, he advised.

“Almost everyone is a retailer,” Steidtmann said. “That positions your industry very well in terms of opportunities.”

The Internet revolution has driven much of this shift to retailing. But that same technology has also helped tenants improve their inventory controls, meaning their space needs are more modest.

“This is something mall retailers haven’t begun to think about,” he said. The malls of the future will be smaller as a result, he speculated.