With just two months to go until Christmas, local retailers are gearing up for the crucial holiday sales season and anticipating a release of pent-up consumer demand. Retail centers are pulling together their holiday decorations and planning seasonal marketing events
With just two months to go until Christmas, local retailers are gearing up for the crucial holiday sales season and anticipating a release of pent-up consumer demand.
Retail centers are pulling together their holiday decorations and planning seasonal marketing events that they hope will draw in the shoppers.
Economists predict a modest 2.5 to 3.5 percent increase in holiday sales over last year. During August in Kaua‘i, visitor spending totaled $99.6 million, and year-to-date spending had reached $746.8 million, representing an 8.4 percent increase since 2009, Hawai‘i Tourism Authority said.
Since 2007, retail vacancy rates across the state have continued to rise, with the greatest increase occurring during the last quarter, says CB Richard Ellis’ third-quarter retail report.
Kaua‘i accounts for four of Hawai‘i’s 77 retail centers and has a vacancy rate of 11.1 percent, the second highest in the state after the Big Island (12.4 percent) and more than double the state’s average of 5.2 percent.
After its opening one year ago, Kukui‘ula Village shopping center in Po‘ipu is at 56 percent occupancy and is 77.8 percent leased, marketing manager Veronica Lovesy said. Aspire Furniture, Hawaiian Salt, Uncle Shave Ice and Smoothies and Savage Shrimp are some of the center’s newest tenants.
“We will be very close to 60 percent by December,” she said. “Hanalei Surf and Sport just signed a lease, and Hanalei Dolphin sushi and fish market will be moving in right across from Merriman’s.”
Kukui Grove, Kaua‘i’s largest retail center with national chains like Macy’s and Sears, was remodeled five years ago and now has 87 percent occupancy. “We’re happy with that level,” said property manager Wade Lord. “Obviously, there’s some vacancy we’d like to address over the next 18 months.
“We had 10 tenant leases that expired over the last year, and we renewed nine of the 10. The national economy drives a lot of these large retailers, and it will be interesting to see how they react as things stabilize.”
On the east side, Coconut Marketplace is struggling to recover after last year’s bank repossession via deed in lieu. New property manager Stephanie Ano of CBRE, which is handling the property for its new owner, LNR Partners, said she could not comment on the shopping center’s occupancy level.
“There have been a few that have left over the last year,” she said. “Everyone is having a very hard time. The vacancy rates have gone up so much more. It’s a hard recovery for everyone. Nobody is spending, even if they have a timeshare and can travel, they’re still pitching pennies. Money is not running fluidly all over the place.”
Ano said her office has been busy trying to bring the center back up to par. “We’re thinking of some fun things and putting special things together, like the farmers market on Thursdays, which started this past July…And we’re digging out and dusting off the Christmas decorations, which we started doing back in June.”
On the flip side, one of the island’s oldest shopping centers, Ching Young Village in Hanalei, has maintained a high occupancy level since it reopened after Hurricane Iniki in 1992. Jeff Cloverhouse, who manages the center along with Michael Ching, said they’re at 100 percent occupancy.
“The center only lost one company during the recession,” he said. “We’ve never really had vacancies on shops out here.”
They recently moved one of their tenants, an engineering firm, to an upstairs unit, and that made room for three new tenants to move in below: HMAA, Hanalei Toy and Candy Company and Kaua‘i Nut Roasters.
“We are in a fortunate situation because of our location,” Cloverhouse said, referring to the center’s ease of access for tourists and the limited availability of office space in the area. “Plus, we have tried to make it a little bit arty here with artwork all over the walls. We’re animal friendly, and we try to make it an atmosphere that is relaxed and enjoyable for families.”
Property managers at Po‘ipu Village, Kaua‘i Village Shopping Center and Princeville Shopping Center could not be reached for comment by press time. Po’ipu Village appears to be approximately 80 percent occupied, while Kaua‘i Village appears to be about half empty.
Although Kaua‘i’s vacancy rate is second highest in the state, the county’s high asking price for retail rents is $4.32 per square foot, which is well above the Big Island’s $2.63 and the state average of $3.99.
Nationally, holiday hiring is expected to grow slightly compared to last year. A Hawai‘i Department of Economic Development third-quarter report said that compared to 2009, the retail sector has experienced the largest job gains in the state, adding 1,450 positions or 2.2 percent, followed by food services and drinking places, which added 1,300 jobs or 2.3 percent.
