Costco expected to boost retail in Southwest Florida

Published: Friday, January 6, 2012 at 1:00 a.m.

Last Modified: Thursday, January 5, 2012 at 7:34 p.m.

None has been more widely anticipated than Costco Wholesale Corp., which plans to open a members' club discount store this summer at the Westfield Sarasota Square mall, supplanting a shuttered Dillard's department store.

"We anticipate dramatically increasing the traffic and trade for the entire center, and expanding our primary trade area particularly to the south," Sarasota Square marketing director Todd Beckwith said of Costco, which will hire 200 when it debuts.

Nearby, Lowe's Cos. Inc. is also readying a new store it has been working on since 2008. Its 94,000-square-foot, Palmer Ranch location, on 20 acres on Central Sarasota Parkway, is slated to open sometime early this year.

Meanwhile, many of the new stores ? or at least commitments from them ? could come from development, which has largely been absent since the decline of the region's housing market in 2006.

At the northern edge of Sarasota County, Benderson Development Co. says it will finally begin construction this year on its 1 million-square-foot University Town Center mall.

The company has yet to announce any major stores, though it has reportedly been courting Saks Fifth Avenue to relocate from Westfield Southgate, among others.

Not to be outdone, Westfield continues to contemplate long-delayed expansions at its Southgate mall. The latest incarnation involved a new 30-store wing slated to include the region's first Apple store.

Mall marketing director Sam Davidson said Southgate has "no new announcements to make at this time," regarding expansion.

Other retail hot spots have also seen increased activity from merchants.

Most notably, every ground floor space on tony St. Armands Circle is leased ? for the first time in three years, said Diana Corrigan, executive director of the merchants association there.

"Our businesses have done really well through this economy," she said. "All the indicators right now for our season are very strong."

And buoyed by an incrementally improving economy, a number of smaller retailers opened stores or moved onto South Tamiami Trail in Sarasota in the past year, noted Barry Seidel, president of American Property Group of Sarasota Inc.

"The South Trail is about as full as I've seen it in 25 years," he said. "Things are available, but not like normal. That's because people have been accepting somewhat lower rents and have leased spaces."

New signs on the trail include Famous Shoes, which after some 30 years left its Stickney Point location, and Bacon's Furniture, which moved into a store Robb & Stucky vacated after filing bankruptcy.

But it is Costco that has generated the most retail buzz at Westfield's other local property. There, the Washington-based retailer is planning a 145,000-square-foot store with a construction price tag of $9.5 million, according to plans filed with the county.

Mall executives believe Costco ? which will sell groceries, clothing, appliances and electronics and include a pharmacy and a gas station ? will deliver a one-stop shopping experience that will benefit the mall's other 100-plus stores.

"We will get more people, more people coming from further distances, and that should increase traffic for other merchants," Beckwith said.

Even so, Southwest Florida's retail market remains challenged by the lingering impact of the real estate plunge, says retail analyst Britt Beemer.

"The question is whether lower prices on homes have brought in a new wave of buyers," Beemer said. "If it has, then retail is going to be up significantly. If it hasn't, then it will probably be 'Groundhog Day 2,' pretty much a repeat of last year."

Snowbird traffic will be critical.

"They have so much impact, redoing their homes, driving furniture and home accessories and those kind of product categories," he said.

Retailers locally and nationwide had hoped a strong holiday season would provide momentum into the new year.

Several major retailers on Thursday reported solid sales gains for December, even though profit margins were trimmed by heavy discounting. Other chains had a more challenging holiday season.

Macy's posted a 6.2 percent increase in sales last month. Costco said revenue rose 7 percent, while Saks Inc. gained 5.8 percent. Limited Brands Inc., the parent of Victoria's Secret and Bath and Body Works, was up 7 percent.

But Target reported a 1.6 percent gain in December, J.C. Penney Co. was up 0.3 percent and Kohl's declined by 0.1 percent.

Chain-store sales climbed 3.5 percent in December over last year, with the two-month holiday period showing a 3.3 percent increase, according to the International Council of Shopping Centers.

"Unfavorable weather throughout the holiday season was cited by many apparel retailers as a reason for softer demand, which ultimately led to an increase in discounting and some profit warnings," said council chief economist Michael Niemira.

"Additionally, our surveys suggest that gift-card purchases were higher this season, which may have limited the December performance, but bodes well for future demand," he added.

Statewide, retail sales were expected to grow 7.4 percent in 2011, in part from higher gasoline prices, according to Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

Still, Snaith cautioned that retail sales this year and beyond will not likely reach the levels they did during the peak of the booms in housing and the general economy.

"Once the labor market has fully embarked on its long path to recovery, retail spending will begin to recover in other areas as well," Snaith said in his latest forecast. "The average growth rate of retail sales will be nearly 4.85 percent during the 2012-2014 time frame."

Source: http://www.heraldtribune.com/article/20120106/article/120109781

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