Topics: Back to school, heath and beauty

Transcript:

Ressa 0:00
This is Retail Retold, the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa, and I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC Management.

Ressa 0:18
Welcome to Retail Retold everyone. I’m your host, Chris Ressa. And I’m excited for today’s episode. Today we’re going to be talking about back to school and the impacts on the retail industry and retail real estate industry.

I think first, just on a high level, it looks like the internet’s predicting that back to school is going to be higher sales in 2023 than they were in 2022. In fact, it will be higher than the high watermark of 2021. I think that’s a healthy boom for the retail industry, the retail real estate industry.

And it bodes well just on the economy in the propensity to for the consumer to spend, you can go and read a lot about back to school, I hope to bring you to a thought process on back school that’s a little bit different. And I think back to school has changed dramatically. And its impacts on the real estate business are going to be dramatic if they haven’t already been felt.

So let’s talk a little deeper about what that is. And to start I want to bring you to my pantry. And so, my pantry. So last night I wake up in the middle of the night. It’s like 1am, and I’m hungry. So I mosey on downstairs, open my pantry and I’m looking for something and my wife does an amazing job with grocery shopping. It’s, the pantry is full. The fridge is full, every meal is accounted for, snacks, you name it, I’ve got a pretty, you know, we’ve got multiple types of drinks. It’s a pretty full fridge and pantry.

Ressa 1:47
I don’t recognize that. I don’t know what anything is in this pantry. And it’s all these brands I’ve never heard of. I open it, I opened it up, I’m like maybe it’s dark and I don’t know what’s going on. So turn the lights in the kitchen, they weren’t on. I saw just pick up z-bar, never heard of z-bar before. Turns out was like a cliff kids bar, and I’m fascinated. I’m walking upstairs, I had no idea what anything was in my pantry.

And I think there’s a lot of pantries out there where people who are living in yester-year, like myself, don’t know what’s inside. And that’s because of a, you know, huge revolution that’s happened. And I think back to school has capitalized on it.

And so the category I want to talk about today is the health and beauty sector, the personal care sector, which is on fire right now. Health and Beauty sector is on fire. It’s up, you know, first eight months of the year it’s up like 8%. Something like that. And then it is, I think it’s up like 7.8% from August to August of last year.

Ressa 3:04
Which is you know, a key Back to School Month as we all know. And I think that is, you know, it’s one of the most resilient categories we know, like in the Great Depression, health and beauty. Cosmetics were still one of the top 10 categories sold in the Great Depression for retail products. But I think health and beauty is growing health awareness is growing and retailers are really trying to capitalize it in ways that we haven’t seen before.

And I believe that this is going to continue one of those areas as you realize for my pantry is healthy snacks. Everyone’s trying to sell healthy snacks Barnes and Noble just put out a press release on they have healthy snacks by like the register for you to pick up any which way they can the retailer could use back to school and provide a product that is top of mind today is what they’re doing in the Health and Beauty sector. Everyone’s kind of trickling into this sector now.

I use Barnes and Noble as a as a proxy. And I think you know, shopping centers that have a diverse health and beauty lineup are going to be high traffic centers. That could be food, that could be you know, jewelry, that could be anything where someone might dub it as a health and beauty. Right that it could be you know, the hair salon, but health and beauty is definitely a traffic driver today.

Anything related to it and retailers know that and they wanted to capitalize that on the back to school where people are prepared to spend and they are doing that. You know, I’ve seen some Using things by the grocers, right whether it’s Publix has a, you know recipes for, for back to school for, you know they call them the smart recipes for school days.

And they’re all like healthy little tidbits Kroger, put out a Health Department put out a quick grab and go breakfasts for your kids and their healthy options. Kroger also has, you know, their clinics in the stores and they’re promoting, you know, the vaccinations for flu season and COVID season for people to come in and get vaccines. And if they come in to get back, so I’ll probably pick up some other items to increase sales, fresh market, Wegmans all have meal kits.

Ressa 5:53
And I think this is not going to stop this health and beauty is not going to stop. I predict that for the Christmas sales, holiday sales or holiday sales, you’re going to see health and beauty be a factor. It’s just it’s fascinating because I had never never connected me with health and beauty as the back to school. But then I see all this. I don’t know what’s in my pantry.

You go glossier glossier, who’s got, you know, I think 11 stores, something like that, not quite sure, direct to consumer, they make, you know, their own makeup lines and soap and all this stuff. glossier has a bus tour right now, going to school campuses. Right, and they’re not on campus, they’re like right off campus. And it’s like a carnival and a bus they’re calling it. And I think this is this is interesting, because, one, it’s just again, the Health and Beauty. And that too. I think this is promoting like how physical retail is so important to the retail mix.

Ressa 7:02
Because, you know, this is an online retailer with some stores that are on the coasts, but at the end of the day, they think they need more, they’re probably going to open more stores, but they’re going to meet the consumer in person. And then it doesn’t stop there, right? Like the Health and Beauty for back to school is everywhere, even local retailers. I read about Mandy’s Beauty Supply in Tulsa, Oklahoma, you know, offering free haircuts to kids for back to school.

And that draws people in the store and I’m sure they’ll buy beauty products while they’re in the store. And I think this personal care and health and wellness beauty category, which is just exploded and is expanding, it’s everywhere. Health and

Beauty and personal cares, every nook and cranny of retail right now, everyone’s trying to get a piece of this pie that continues to grow, whether it’s for back to school, whether it’s per holiday season, or the every day. And I think when you’re thinking about you know shopping centers, I think any which way that you can have around having a portion of the center be personal care, health and beauty. It right now traffic’s going to rise.

Ressa 8:19
That, you know, I think, and we’ve, I don’t think we should get pigeonholed to what we think is health and beauty and personal care, right, you’re seeing, you know, we have at our house like the thermoses, these new thermoses that are from all these different brands that like you can put healthy food in warm food, keep the food warm for when your kids go to school. Right, this is a retail product that could be Yeti could be anything that you find at Walmart or Target.

Right? Anything that has to do with this health and beauty and personal care sector is driving foot traffic to the properties and I think you’re going to see more just like in 2020 and 2021 every retailer tried to like get into the home category. They were putting, you know, whole products into the store.

You’re you’re starting to see this from the Health and Beauty personal care sector. And then any way that someone might be able to, you know, market themselves as in that space and the products that they sell in that space.

Ressa 9:37
They’re doing it and this is driving and will continue to drive traffic to centers. And I don’t think this has gone away, right. It’s one was the categories. The only thing different today is it’s expanded immensely. This cosmetics are one of the most resilient categories in the Great Depression. Right? This isn’t going away. This is here to stay and like I said it’s expanded. Its expanded to holidays like back to school.

It was like, if you look at people who put out like retail trends, one of the biggest back to school trends that people were talking about. Normally, it’s all about fashion, right? We’re talking about fall boots. And we’re talking about, you know, flannels that one of the biggest trends was healthy snacks for back to school, healthy snacks, and I take you to my pantry, which I’m going to have to go and learn about all these brands, and what’s actually in there what I like and what I don’t like.

The Clif z-bar is pretty good, though, it was pretty good. So, as you know, I think this is a category when people are thinking about shopping centers, and the physical nature of shopping centers, people always looked at beauty as, you know, a very closed sector, to cosmetics brands and their great old Sephora, glossier, these are great brands.

But I think this has expanded immensely to health, beauty, and personal care. And now when you’re thinking about merchandising, a shopping center, and you think about what actually hits on that industry, the list of retailers that are hitting on that industry is immense.

Ressa 11:25
And they’re traffic drivers. So that’s what I have for today, a short episode on back to school. But, you know, I think the real point of this was, you know, about the health, beauty and personal care segment of retail, but I think it is really important right now, because it’s on fire. It’s the hottest sector, and this isn’t going anywhere. It’s just continuing to expand to people to mark themselves around this space, and the traffic driver for retail properties. And I’m excited for the sector.

And I’m excited to go home and learn about my pantry. All right, everyone. That’s Retail Retold today. Have a great rest of the week. Thanks everyone.

Ressa 12:19
Thank you for listening to Retail Retold. If you want to share a story about a retail real estate deal that you were a part of on our show, please reach out to us at retailretold@dlcmgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney Also don’t forget to subscribe to Retail Retold so you don’t miss out on next Thursday’s episode.