Retailers must rely on local shoppers
By Sean Hao
Advertiser Staff Writer
There are several facts any retailer should know about Hawai'i shoppers: They're older and more affluent than the national average, they like to eat, and about half the money generated at stores comes from the pockets of local residents.
Those key characteristics and other trends in Hawai'i's retail industry were topics of discussion during a workshop yesterday at the Renaissance 'Ilikai Waikiki conducted by the International Council of Shopping Centers.
Retail habits are likely to take on more significance with the weak economy, war in Iraq and fears of the mystery illness SARS expected to cut into this year's sales. This week the National Retail Federation lowered its retail sales forecast for 2003 from 5.8 percent growth to 3.8 percent, which is comparable with last year.
Despite a state economy that largely revolves around tourists, retailers would do well to remember that local shoppers account for about half of all retail sales, said Nanette Macapanpan, a senior associate in KPMG's Real Estate and Hospitality Advisor Group.
Hawai'i residents spend $3.2 billion a year versus $3.8 billion spent by visitors, she said.
"What we've seen is that local shopping in total is comparable to visitors," Macapanpan said. "We really cannot forget the local market."
One bit of good news for local retailers: Hawai'i shoppers spend more on a per capita basis than the national average — $4,697 versus $4,538. Local stores also generate more sales per square foot than those in comparable states, such as Delaware, Rhode Island and Maine.
Among shoppers, those of the baby boom generation are the largest segment of the market and on average spend the most, at $48,000 a year. That's well above the $23,000 a year spent by shoppers age 23 and under — the next largest demographic group.
Hawai'i's population, which is older on average than the nation's as a whole, tends to dine out less and spend less on apparel than younger consumers, Macapanpan said. On the other hand, the under-23 crowd, which Macapanpan called "Generation Y," is more ethnically diverse.
What shoppers buy has changed between 1996 and 2001, she said. Sales of home and garden products and apparel dropped, while spending on food and general merchandise grew, she said.
Overall, Macapanpan said, shoppers spend the most money on food and beverage items — on average, $7,300 annually — followed by entertainment, where $2,000 is spent, and apparel, which accounts for $1,800. Such spending mirrored national trends.
"So food-related retail is kind of the meal ticket," she said.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
