Despite competition from e-commerce outlets such as Amazon, leaders of Long Beach business improvement districts expressed a positive outlook for Long Beach retailers during the rest of 2018.
This forecast echoes the national perspective. According to Jack Kleinhenz, chief economist for the National Retail Federation, the three-month moving average for March, April and May for retail sales increased 4.6% over the same period a year ago.
Kleinhenz said this number is slightly ahead of the projection for the year, which had been an increase of 3.8% to 4.4%. “There have been sizable job gains, a pickup of wages and consumer confidence is elevated,” he explained. “People’s willingness to spend is consistent with consumer confidence data. . . .The ability to spend is there. Income and take-home pay are up because of the tax plan. Unemployment is at a long-time low; consumers have fairly good access to credit. It looks good going forward for the remainder of 2018.”
Although online retailers provide convenience, Retail Design Collaborative Vice President of Client Engagement David Sheldon said he has noticed a “bigger drive” toward hyper-local and experiential retail. This may represent a reaction, in part, to the increase in e-commerce sales. Retail Design Collaborative is a Long Beach-based architecture firm specializing in retail design.
“There’s almost a contrast where, [when] e-commerce sales pick up, we see an increase toward experiential, hyper-local retail,” Sheldon said. “There’s such a drive towards buying commodities online, but I’m not going to buy things [online] that really mean something to me.”
While Sheldon reported that e-commerce sales have grown 5% over the past five years, they still make up less than 10% of total retail sales. Sheldon said he informs his clients that traditional retail is not dead or dying, but, rather, is shifting based on the trends.
But according to Amy Mittino, president of the California Association of Independent Businesses, local retailers statewide are working under the challenges of an increased minimum wage and fewer employees as a result of layoffs. “Some businesses are doing very well, but a lot of small businesses are telling us they’re really struggling with competing with the Internet and the big stores,” she said.
Mittino said that, over the past 15 to 20 years, the association has noticed a significant drop in small businesses in California. “It used to be that 75% of the private sector jobs were provided for by small businesses that averaged five or six employees,” Mittino said. “Now it’s 50%. In the retail industry specifically, they’re going out of business because of Wal-Mart, K-Mart and other big retail stores that can price them out of business.” Mittino commented that, although some have raised their prices, they can’t compete with some of the big retailers.
Blair Cohn
Executive Director, Bixby Knolls Business Improvement Association
When I am asked about the outlook for retail, I instantly respond with “maintaining.” We work very hard in Bixby Knolls to push for local support by the community for all of our mom and pop retailers. We are up against the challenges of online shopping or people habitually heading to a mall or another city to shop. We must continue to stress the importance of supporting local businesses. There are indeed many savvy retailers who have become destinations through their marketing efforts on social media and community outreach.These types of retailers usually have an online presence, too. They are very creative with incentives with their customer bases to build loyalty and help gain more customers. Those that put up a sign and just open their doors have a greater challenge. If a business these days does not work twice as hard on their marketing and promotion, they can easily be lost and hence their dream would be over sooner than ever imagined. Business districts continue to serve as conduits for resources, creative ideas, and cheerleaders for all members. Each district has its own challenges but ultimately we want to see all of our members (service, restaurant, or retail) thrive.
What I am most curious and interested about is the long-term future of retail. I am trying to gauge where the pendulum is. On the one hand, we see large big box retailers starting to fail and disappear. This may continue with the impact Amazon has had. On the other hand, we see new developments at 2nd & PCH and Long Beach Exchange (LBX) where larger chains are coming to set up shop. But will these chains be here in 5-10 years? I sure hope so and hope that we do not face large developments with vacancies. The pendulum is swinging towards the “experiential” for retail centers; I understand that. But I think that more than ever it is critical that the neighborhood business districts exist, thrive, are supported, and continue to offer the person-to-person experience that you can’t have from sitting behind a computer and ordering something online. I am excited about the boom in Long Beach and applaud all the new investment and development. But I keep a cautious eye on national trends that could replicate in our city. Meanwhile, it’s my charge to keep our little pocket of Long Beach energized and active as much as possible.
Adam Carrillo
Economic Development Manager, Downtown Long Beach Alliance
The Downtown Long Beach retail industry has seen a number of changes during the last few years. As e-commerce continues to drive more revenue for the retail business owner, Downtown Long Beach’s business owners can truly be considered leaders in e-commerce adoption and expansion. E-commerce provides an opportunity for small business owners to expand beyond the local audience to a national level. Downtown Long Beach Alliance’s (DLBA) annual business survey published in part with its 2018 Annual Report found that over 79% of downtown retail business owners agree or strongly agree that the existing technology infrastructure meets their business needs. As technology is an important component of success, it is viewed that downtown retail brands such as 6th & Detroit, ButterScotch, and Romeo Chocolates, to name a few, have been successful in elevating the in-store experience into a digital experience for scalable consumer consumption. Downtown’s retail market is very healthy and currently exceeds 97% occupancy of 2.8 million square feet. This does not include the additional 135,678 square feet of retail space planned to be introduced from the many mixed-used residential developments and the Civic Center project to be developed over the next five years.
In 2016, downtown saw record high gross retail sales reported by retail businesses with over $410 million in gross sales, up 73% since 2012. Over 66% of downtown business owners surveyed are confident the Long Beach economy will continue to expand in 2019. This is encouraging considering the many variables factored in retail sales, including record high tourism numbers, new residents with more disposable income moving into the area and the expanding number of Downtown employees whose earning power is 31% greater than workers in the remaining portion of Long Beach.
As a leader in providing empirical data, free education, training, and access to capital than ever before, the DLBA is proud to continue its commitment to support organic growth from local entrepreneurs and small business owners.
For more information on a variety of business-related programs offered by the DLBA including Entrepreneurship Education Series, Woman Owned Business Accelerator, Small Business Grants, Google AdWord Workshops, 1 Million Cups, and DLBA now serving as a Kiva Long Beach trustee, please review www.DTLBbusiness.com.
Debra Fixen
General Manager, Shoreline Village
Shoreline Village has experienced a very successful 1st quarter. First quarter sales in 2018 have seen an uptick of almost 10% from 2017 1st quarter. This early success gives me full confidence that 2018 will be a banner year for merchants of Shoreline Village. This success can be attributed to the strong economy, continuous growth of our tourism and convention business and the beautiful weather we experience in Southern California. Expanding our marketing efforts and community partnerships have possibly helped along the way. We have a regular feature on Long Beach local news, we continue to support local nonprofits such as the YMCA of Greater Long Beach, and you can often find the Jazz Angels performing on our stage. This summer we have added more music on the stage, performances throughout the village, and a Thursday talent event, but we have also continued with favorites like the Wednesday free lunch cruises.
We have an exciting new venture, “Carts of Rainbow Harbor,” for which the city awarded Shoreline Village the permit to operate up to 18 retail merchandising units at Rainbow Harbor. The first carts arrived at the end of June, with several long-term vendors as well as some new and local Long Beach businesses, operating them. A few of the carts carry the typical souvenir items, but also some unique products. The area around the visitor information booth will have food vendors and free games to enjoy perhaps on a weekday break-out-of-the office lunch.
Rainbow Harbor is such a beautiful area that includes Shoreline Park (lighthouse area), a sandy knoll with native grasses and a beautiful boardwalk along the harbor. We are hoping to attract more locals and tourists to enjoy this underutilized asset of our downtown waterfront. Rainbow Harbor also has a bandshell located behind Q Smokehouse and Gladstone’s: the Nautilus Shell. Shoreline Village will begin to schedule events at the Nautilus Shell, such as live music or perhaps a family movie night. Stay tuned for lots of exciting changes and visit our website for more information on events or becoming a cart operator at cartsofrainbowharbor.com.
Tasha W. Hunter
Executive Director, Uptown Business Improvement District
Uptown is home to many entrepreneurs, from the mom and pop businesses, to an adequate supply of self-care salons and churches, all of which are colorfully woven into the fabrics of our business corridor. Excitingly, many of our retail shops report they have been successful this year and sales are on the rise for the remainder of 2018, despite online competition.
Pasha Darvishian, managing partner for Darvishian Real Estate Investments Services says, “North Long Beach is seeing positive rent growth and lower vacancy numbers with new retail developments on the horizon. Retail rents are up and developers are looking into North Long Beach for new creative mixed use developments. The sub-market will attract more entrepreneurs, artists, hipsters and foodies looking to call North Long Beach home. Corridors such as Atlantic Avenue will have new opportunities with storefront properties being converted to creative retail space.” Much-anticipated ground breakings are forthcoming in the next year with the Uptown Commons development by Frontier Investments Group at Atlantic and Artesia, the new Harding Plaza by Westland Real Estate Group on Atlantic and Harding, as well as the LAB Holding developments along Atlantic south of South Street.
To help sustain a healthy businesses community, the Uptown Business Improvement District has recently become a Kiva trustee through the EveryOne In initiative with the goal of empowering current businesses owners with tools to promote sustainability while helping them gain access to information and valuable resources. The Uptown BID also hosts a free 6-week Business 101 series dedicated to teaching Uptown entrepreneurs how to be competitive retailers, and how to utilize social media platforms to digitally market their businesses at little to no cost. The courses, taught by Jeff Rowe, journalist/college professor and community leader, and Urina Harrell, a North Long Beach resident, marketing professional and Duke University alumni, will be a continuous series throughout the remainder of 2018.
Tony Shooshani
Managing Member, Shooshani Developers and Owner of The Streets
The retail industry will continue its growth nationally and in Long Beach throughout the year.
The most recent retail report shows May retail sales increased 5.6 percent over last year, according to the National Retail Federation. The three-month moving average was up 4.6 percent over the same period a year ago.
This coincides with the good news in Long Beach:
Mayor Robert Garcia recently announced that Long Beach is experiencing historically low unemployment rates at 4.1 percent. And since the 2007 recession, 9,000 jobs have been created. Mayor Garcia credits the $3 billion in construction and investment, which brings work to the community.
“We’ve got great companies moving in and the downtown is really booming. If you go downtown, there’s really construction everywhere,” Mayor Garcia said to KABC-TV.
Long Beach construction can also be seen at the nearly-finished Long Beach Exchange at Douglas Park, the repurposed shipping containers at SteelCraft in Bixby Knolls, the refresh of Second Street in Belmont Shore, the renaissance of The Pike Outlets at Shoreline and the ongoing refurbishment of our shopping center in the heart of downtown.
In 2018, The Streets opened BurgerIM restaurant, The ThickShake Factory, Pinot’s Palette, Loiter Pop Up Galleries and the Pine Avenue Parklet.
Opening later this year is Table 301 restaurant, Habibeh, Loose Leaf Boba Company, Party Monkey, Poki Cat, Portuguese Bend Distillery and the 4th Street Parklet.
The Streets is growing and now offers more than 40 retail stores, specialty shops, entertainment venues and dining outlets.
Go Long Beach!
Jim Ritson And Jennifer Hill
Co-Presidents, 4th Street Parking And Business Improvement District
It is safe to say that every retailer’s goal is to thrive and survive while competing with behemoth Internet retailers like Amazon. For decades, locally focused business districts have gone through ups and downs as consumer habits and loyalties have shifted. Although it is difficult to predict future trends in the retail industry, I think we can say some very positive things about the direction of the retail industry in Long Beach for the remainder of 2018.
While it is easy to feel pessimistic about the prospect of competing with Big Corporate, it is important to recognize the resurgence of life into main street USA. This is very evident in the 4th Street Business Improvement District in Long Beach where retailers are providing specialty and niche products that the big retailers cannot. Additionally, customer service and experience are among the things small businesses corner the market on, and 4th Street merchants pride themselves on. Fourth Street Retro Row provides access to the culture of Long Beach and that is something that the big retailers are unaware of and certainly unable to provide. In the past, the summer months were not busy on the 4th Street Retro Row corridor but, as of late, this has changed. There is an absolute increase in foot traffic on 4th Street and the future looks bright. Maybe it’s because of the success of our monthly 4th Fridays event. Maybe it’s because more and more businesses are moving to the area, bringing new vitality and life. Maybe consumers are choosing culture over Internet shopping. At this point, let’s not question it, let’s ride the wave!
For a city like Long Beach, which boasts a seemingly endless number of unique retail corridors throughout the city, I think the outlook for the retail industry for the remainder of 2018 is looking great!