Despite competition from online retailers such as Amazon, Long Beach brick and mortar outlets remain positive about sales in 2018, echoing a national perspective.
“I think the outlook for the retail industry is positive going into 2018,” Jack Kleinhenz, the chief economist for the National Retail Federation, said. “We were very encouraged by the holiday season. Job creation has been solid and unemployment rates have been low. And we’ve seen modest increases in wages which has boosted consumer spending.”
Patrons stroll down 2nd Street in Belmont Shore on a Sunday afternoon. Dede Rossi, president of the Belmont Shore Business Association, reported strong sales during the summer and holiday season. (Photograph by the Business Journal’s Anne Artley)
Local retail centers and corridors reported growth in 2017 and predicted continued growth in 2018 due to new tenants and a strong economy. For example, Jim Ault, property manager for Parkview Village Shopping Center in Northeast Long Beach, said 2017 was one of the center’s best years. Similarly, Downtown Long Beach Alliance President and CEO Kraig Kojian recorded an influx of new downtown businesses in 2017. And Tony Shooshani, managing member of Shooshani Developers, predicted increased activity at The Streets shopping center due to a variety of businesses opening in January.
Many new retail tenants throughout the city, including at The Streets, are restaurants. Sharokina Shams, the vice president of public affairs at the California Restaurant Association, reported a “glut” of restaurants in the state’s largest cities.
“There are so many restaurants and new concepts being tried out by adventurous entrepreneurs that it’s really giving older establishments a run for their money,” she said. “There might be a contraction in the coming years since there’s not enough business to go around.”
Although they expressed trepidation about competition from online retailers, business association leaders Dede Rossi of Belmont Shore and Blair Cohn of Bixby Knolls said establishing a strong online and social media presence can help smaller shops stay in the game.
Retail experts and executives said the impact of the 2017 tax reform represented another uncertainty. “We don’t know yet how the tax program will affect spending,” Kleinhenz said. “There might be a mixed bag of give and take for taxpayers. When people understand what will be in their paycheck, that’s when we [will discover] if they will commit to more spending.”
Editor’s note: The following are guest perspectives by industry executives on the outlook for retail in 2018.
Jim Ault
Property Manager, Parkview Village Shopping Center
We are remaining positive. 2017 was a slow but good year. We did add a few more tenants to the center, and we were able to fill a few more vacancies. This has been a steady uptrend for us for the past three to five years. While it has been slow, it has been positive. For 2018, we expect for this trend, at least for our shopping center, to continue. For the city, we are also remaining positive. We’re hoping that the new tax laws will be a benefit to the business community and allow businesses to do some expansion that will result in positive growth for 2018 and possibly into 2019. I’ve been managing Parkview Village for 21 years now, and 2017 was one of our strongest years. We have both a retail sector and office sector and they are doing very well.
Blair Cohn
Executive Director, Bixby Knolls Business Improvement Association
We remain positive in Bixby Knolls for our mom and pop retailers, even though the national outlook for retail predicts challenges. Even big box retailers are affected by Amazon and online shopping, so it all filters down to the very local levels. It’s an important part of our mission to keep promoting, publicizing, and creating events around our retailers to muster the local support from the neighborhood and beyond. The retailers that have both an online presence as well as brick and mortar have an advantage. In addition, the retailers that create themselves as a “destination” and are creative with their marketing do the best. Fortunately, we have a number of retailers that do this and continue to build their own followings. We are here to supplement the efforts and make the district as shopping and dining destination as a whole.
Debra Fixen
General Manager, Shoreline Village
The waterfront location and whimsical charm of Shoreline Village make it a destination for tourists and locals alike. Shoreline Village has had its ups and downs along with the local economy, but has been in a steady, positive growth mode for the past five years. 2018 is predicted to be no different. Due to the popularity of the location, selection of quality dining, and unique shops, there is something for every budget and taste. Locals enjoy our free family entertainment and we hold many events and provide venues for our local non-profits.
In 2018, we will be welcoming new merchants, as well as seeing the expansion of some of our veteran merchants including Louisiana Charlie’s. Since opening in 2013, Louisiana Charlie’s has become an increasingly popular restaurant, for its authentic Cajun dishes and barbeque. The restaurant regularly has two hour waits on the weekends, and will be expanding its kitchen and dining area to accommodate their growing flock of fans. We have some new retail stores coming, some moving, and some expanding, along with a new family style restaurant, all of which cannot yet be named as leases are under negotiations.
As online retail sales grow, shopping centers have had to evolve with the changes. Customers buying styles have changed with increased purchasing online. To survive and thrive, shopping centers need to provide a more of an experience rather than just being a location for shopping. Shoreline Village more and more is looking for merchants that can provide an attraction or activity. In 2017, Shoreline Village welcomed Global Candle, where you can watch your candles being dipped in your custom design or one of their popular styles.
As the tourism industry continues to expand and solidify Long Beach as a premier destination, Shoreline Village continues to grow along with it. Ownership has plans to expand the parking lot, upgrade our entertainment area, and provide an overall enhanced appearance, while maintaining the unique charm that has made Shoreline Village one of Long Beach’s most iconic landmarks.
Chris Giaco
President, Fourth Street Business Association
Much as we did for 2017, the Fourth Street Business Association finds itself approaching 2018 with cautious optimism mixed with increased concern for what continues to be a challenging retail environment for brick and mortar businesses. While we are generally optimistic and encouraged by the direction the City of Long Beach as a whole seems to be taking, we find ourselves consciously and constantly working to ensure that such large-scale changes to infrastructure, planning, and development effectively translate to positive impacts for our individual neighborhoods. While we have noticed increased tourist and local traffic to our district, it is also clear that consumer spending habits are in a state of flux, and many of our small businesses operate in a state of constant uncertainty. This is not a situation unique to 4th Street, or even Long Beach in general, but likely reflects a larger cultural shift in the nature of consumer shopping habits, and extends to social activity on a more general scale.
To keep our business district vibrant and relevant, we have redoubled our efforts to offer creative events programming in order to reengage existing patrons and introduce 4th Street to newcomers. Through our monthly Fourth Fridays on 4th events and our annual Pour on Fourth beer and wine tasting event, visitors are afforded the opportunity to experience 4th Street and our increasingly varied selection of businesses, services, and drinking and dining options. As one of the only Long Beach business districts comprised of businesses owned and operated exclusively by small, independent owners, 4th Street truly embodies the spirit of shopping, supporting, and staying local. We believe this concept to be a necessary cornerstone of economic sustainability, and one that we will continue to embrace and promote throughout the coming year.
Kraig Kojian
President & CEO, Downtown Long Beach Alliance
Downtown Long Beach Alliance (DLBA) welcomes 2018 with continued resolution to build upon its mission to cultivate, preserve and promote a healthy, safe and prosperous downtown. Our focus is targeted upon achieving the objectives outlined in our Vision 20/20 Strategic Plan to position Long Beach as a regional economic powerhouse with a strong local character.
Beginning this month, DLBA is conducting its Annual DTLB Business Survey to acquire information to best assist us with our mission of encouraging and supporting business development and investment in downtown.
2017 was a year of growth in downtown with 174 net new businesses, an 11% increase from the previous year (http://bit.ly/DLBA2017AnnualReport), and this year will bring further expansion with 26 additional new businesses currently known to have opened or to launch.
In last year’s research of downtown business owners, 64% of them expect to expand in 2018, and 72% believe the Long Beach economy will grow this year (http://bit.ly/2017employmentprofile). Presently, ground-floor occupancy is approximately 92%, with planned construction of mixed-use developments expected to add an additional 1,038 residential units and 16,500 sq. ft. of new retail space within the next two years.
Job growth for downtown is up 6.5% surpassing the citywide rate of 3.9% and L.A. County’s rate of 2.2%, as cited from the Downtown Long Beach Employment Profile report completed in partnership with Beacon Economics and the City of Long Beach late last year (http://bit.ly/2017employmentprofile).
Finally, we expect accelerated and increased investment in downtown across all commercial real estate assets and new multi-family housing investments, such as Ocean View and Shoreline Gateway, to break ground and add another 389 residential units between these two iconic projects. Overall, Downtown Long Beach continues to serve as a regional economic engine and as a desirable location for independent business growth and nationally recognized investors.
Dede Rossi
Executive Director, Belmont Shore Business Association
In 2017, the Belmont Shore retail businesses did not start the year off strong. We had a lot of rain and construction on 2nd street, but that may not be the reason sales were down. Luckily, sales picked up and most of our smaller retailers had a good summer. Also, holiday sales were up. With construction done and hopefully good weather coming, we don’t expect much will change in 2018. An exception is that February and March may pick up if we focus on upcoming holidays, starting with Valentine’s Day. We can’t compete with Amazon and other online shopping, but small business has picked up – and not just on Small Business Saturday in November. Retailers have experienced the younger generation patronizing their stores, perhaps because they are willing to give their money to small business rather than big box stores. Millennials also like to shop online, businesses that also sell online and have a big social media presence should be the most successful. Thankfully, the new businesses that are coming in incorporate these practices.
Tony Shooshani
Managing Member, Shooshani Developers
The Streets is rolling right into 2018 with the same great momentum and success as seen in 2017.
With the heart of downtown centered in between 3rd Street, 6th Street, Pine Avenue and Long Beach Boulevard, The Streets is now a popular destination.
The multi-year repurposing and repositioning project is spread throughout the 350,000-square-foot mixed-use district and has experienced a number of new businesses, restaurants and specialty shops opening last year with more on the way.
In 2017, The Streets welcomed Retail Design Collaborative and Studio One Eleven that opened in March. King Buffet restaurant opened in April, Romeo Chocolates opened in July, The Plant Junkie opened in September and Creative Crepes restaurant opened in October.
The Streets has a variety of businesses opening in varying stages in 2018, to include Burgerim restaurant, Table 301 restaurant, and The ThickShake Factory – all in January.
Two new projects are moving forward on 4th Street with an innovative, parklet dining area in front of Milana’s New York Pizzeria, Mitaki Japanese Restaurant and Fresh Kabobs, followed by a proposed new parklet on Pine Avenue in front of several retail locations, including The Pie Bar.
The Streets and California State University, Long Beach, recently announced their partnership to develop the “CSULB Village” with construction projected to start in Fall 2018.
In addition, lease agreements have been signed for openings throughout 2018 including Habibeh, Loose Leaf Boba Company, Party Monkey, Pinot’s Palette, Poke Cat and Portuguese Bend Distillery.
Walmart has not provided a timeline for a new tenant in the current Walmart space. Yet we have many inquiries and we will continute to identify potential new tenants that best represent our new downtown.
The Streets now offers more than 38 retail stores, specialty shops, entertainment venues, and dining outlets. The retail outlook for Long Beach and The Streets is moving in the right direction.