SOUTH: Dixie's Dueling Demographics
This Census Bureau region, encompassing both the eastern and western segments of the southern U.S., shows trending that's as diverse as its population
More respondents here than in other regions report first quarter 2011 sales up over the first quarter a year earlier. Looking ahead over the next three years, more ECPs in this region than others see regular eye exams as the number-one area of growth.
ECONOMIC OVERVIEW
The South was nearly on par with the U.S. average jobless rate for April 2011, which was nine percent, so it remains neither the best nor the worst region in terms of unemployment. Still, consumer confidence was on the decline here from 2010 to 2011.
JOB LOSS
The South is experiencing a slight reprieve on the unemployment front. In April 2011, this region reported a jobless rate of 8.8 percent, according to the U.S. Department of Labor's Bureau of Labor Statistics. This was down from the previous year, when unemployment rang in at 9.4 percent.
CONFIDENCE FACTOR
According to the BIGresearch Consumer Intentions & Actions Survey, a surprisingly low 27.7 percent of consumers in the South said they were “confident” or “very confident” about the chances for a strong economy during the next six months.
Charleston, S.C., city market
The number of consumers who felt the same in May 2010 was 32.6 percent, so it appears that consumer confidence in this region is subject to some serious ebbs and flows.
Austin, Texas, capital
SPENDING OUTLOOK
The drawn-out nature of the recession has residents of the South looking to simplify their spending even further.
When BIGresearch asked Southern consumers in May 2011 what specific changes they'd made in the last six months, 45.2 percent said they have become “more practical and realistic in their purchases.” This was up from 41.3 percent in May 2010.
In May 2011, a full 54 percent also said they had focused more on what they “need” versus what they “want” in the past six months.
Additionally, 44.3 percent of respondents said they have become more budget conscious, a notable increase over the 39 percent that felt the same in May 2010.
COST OF GOODS
The Consumer Price Index (CPI/the prices paid by urban consumers for a representative basket of goods and services) increased by 3.4 percent in the South during the 12-month period ending in April 2011. That's the largest regional increase in CPI for that period.
RETAIL REAL ESTATE
Oversupply and limited demand in the Southwest equated to a difficult commercial real estate market in this area. The South Atlantic fared slightly better, with rates that paralleled those of the country as a whole.
VACANCY RATES
High vacancy rates kept the retail real estate market down in the first quarter of 2011, when rates in the Southwest climbed to 13.2 percent (up from 12.5 percent in the first quarter of 2009) and rates in the South Atlantic were 10.9 percent (up from 9.2 percent in the first quarter of 2009), according to Reis, Inc.
These compared to the overall U.S. vacancy rate of 10.9 percent for the quarter.
High vacancy rates are holding back new construction of retail real estate. Instead, existing retail centers are looking to reinvent themselves.
“The real trend today is in redevel opment, as shopping center owners look to update their current properties over starting new projects,” says Jesse Tron, media relations specialist with the International Council of Shopping Centers.
RENTS
The Southwest's asking rent ($13.35 per square foot [PSF]) remained the lowest of any region in the first quarter of 2011, with no notable change over first quarter 2010 when the asking rent was $13.44 PSF.
The South Atlantic reported a noticeably higher asking rent of $15.57 PSF in the first quarter of 2011, which was also not much of a change.
METRO MARKETS
Despite its low rents and high vacancy rates, the South is home to a few bright spots worth watching. “The South was flat and the South Atlantic was up only one-tenth of a percent, but there were some cities where we've at least seen a point change or more in vacancy rates,” says Ryan Severino, a senior economist with Reis, Inc. “Chattanooga, Tennessee, for example, had a strong decline in vacancy rates in the past year.”
CITIES TO WATCH
In addition to Chattanooga, the growing urban hub of Asheville, N.C., saw a decline in vacancy over the past year to 6.5 percent in the first quarter of 2011, when it also saw an increase in rental rates to $14.29 PSF. Atlanta realized a lower vacancy rate of 10.2 percent for the same time.
FASHION TRENDS
The South's embrace of genteel fashion is a perfect fit for the all-American and good taste dressing trends of the Fall 2011 season. Southern consumers will pump up the volume on these key trends.
LADYLIKE
“They will take an even stronger tone here because the dressing is already ladylike,” says Roseanne Morrison, fashion director at The Doneger Group, a trend and color forecasting service. “We'll see even longer skirt lengths, more ruffles, and a cleaner and more refined look here.”
The season's colorful clothing, prints, and accessories are a proper fit for the South, which has always had a penchant for bright hues.
New Orleans
| OPTICAL FILE LENS MARKET |
|---|
| The South is ahead of other regions so far this year in percent of free-form/digitally produced lens sales. ■ MATERIALS This region is also the strongest supporter of poly, with 52 percent of practices surveyed reporting it's their “most-used” premium product. ■ AR While photochromic sales dipped, AR saw its greatest growth in this region, with 79 percent of practices surveyed reporting it the “most-sold extra.” ■ COMPUTERS Southern respondents were second only to ECPs in the Northeast in citing computer vision as the fastest-growing specialty area. |
| OPTICAL FRAME FOCUS |
|---|
| The South is on the move with aggressive business maneuvers and new, expanded pricing strategies that lead the rest of the nation. MATERIAL: Maybe the heat is a factor; maybe the edgier design aesthetic is a detractor. Whatever is driving the trend, plastic is at its least popular in the U.S. with Southern buyers (32 percent). Reports from Southern respondents of metal eyewear sales lead the nation at 50 percent. Rimless eyewear is also strong at 14 percent. PURCHASE PATTERNS: The South leads the nation in refilling new prescriptions into new frames, with 79 percent opting for new while just 21 percent select refills. This marks a three percent rise in new frame purchases. SECOND PAIRS: Sunwear sales rose slightly to 71 percent of second-pair sales in the South this year. While causal eyewear dipped to 18 percent, computer eyewear and readers sales is six percent. PRICING: Only 35 percent of Southern respondents reported staying at the same pricepoint, leading the national shifts. About 21 percent went to higher and 19 percent went to lower pricepoint inventories, while 25 percent expanded to both. |
| EDGING STATS | |||
|---|---|---|---|
Balancing in-house finishing with outsourced lens fabrication, the South was consistently in the midrange of in-office edging, finishing, and AR production. More ECPs in this region than others report plans to purchase edging equipment within the next three years. In terms of in-house edging, respondents reported:
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| SNAPSHOT | |
|---|---|
| Austin… | the country's best business city (Kiplinger) |
| New Orleans… | worst city in U.S. for finding a job (Forbes) |
| Charleston, S.C.… | America's most livable city (citydata.com) |
| Washington, D.C…. | the third highest-paid workers in the U.S. |
| Largo, Fla…. | oldest population in the country (Business Week) |
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