Retailers are still growing their business, finding new locations, says Tanger CEO Yalof

Key Concepts

• Record Leasing Volume: Tanganger experienced a significant increase in the amount of retail space leased.
• Bifurcated Economy: The economy is characterized by distinct segments, with some consumers facing financial difficulties while others are thriving.
• Value Proposition: The importance of offering good prices and discounts to consumers, especially in the current economic climate.
• Experiential Retail: Retail spaces that offer more than just products, focusing on experiences and entertainment.
• Deflationary Pricing: Brands offering products at prices that are actually decreasing, often below the rate of inflation.
• Stock and Staff Metrics: Key indicators for retailers to gauge consumer spending potential, referring to the availability of inventory and personnel in stores.
• Younger Consumer: A demographic segment that is increasingly important for brands, particularly those offering value.

Tanganger's Strong Leasing Performance and Consumer Demand

Tanganger reported record leasing volume, indicating robust demand for retail space. This success is occurring despite broader economic challenges and a bifurcated consumer economy where some segments are facing financial pressures. Steven Yalof, CEO and President of Tanganger, highlighted that many brands they partner with are actively expanding and seeking new locations, demonstrating a continued commitment to growth.

Retailer Expansion Timelines

Retailers are planning their expansion and leasing strategies approximately a year in advance. Tanganger has already secured all leasing for 2025. Leasing for 2026 is about three-quarters complete, and deals are currently being finalized for late 2026 and 2027. This forward-looking approach suggests confidence in future consumer traffic and spending.

The Ascendancy of Value and Experiential Retail

Tanganger is succeeding not only on the experiential side of retail but also by emphasizing value, which has become more critical than tariffs for many consumers. Yalof noted that in the outlet channel, the value proposition is paramount. The message of "being on sale every day" resonates strongly with consumers, particularly in the current economic environment. This aligns with broader consumer trends where choices in dining and shopping are increasingly influenced by price.

Shifting Demographics and the Younger Consumer

The demographic profile of shoppers is evolving, with a notable increase in the younger consumer segment. Yalof referenced reports from Cava and Chipotle, where executives highlighted that their products, priced below inflation, are attracting younger customers. Similarly, in the outlet space, Tanganger's brands are perceived as almost deflationary, with pricing, including markdowns, falling below the cost of inflation.

Forecasting the Holiday Season: Optimism Based on Key Metrics

Tanganger's outlook for the retail holiday season is optimistic, based on key metrics: stock and staff levels in stores. Yalof explained that a lack of staff or inventory would signal a problem for retailers. However, Tanganger is observing that stores are well-stocked and adequately staffed. Counterintuitively, even with a government shutdown in October, Tanganger saw increased traffic in their centers. This suggests that consumers are actively seeking out their locations for value shopping and holiday gift-giving. The National Retail Federation's projection of increased spending this year compared to last year further supports this positive outlook, with no signs of a slowdown yet observed.

Conclusion

Tanganger's strong leasing performance is a testament to the enduring demand for retail space, particularly in the value-oriented and experiential sectors. Despite economic headwinds, retailers are demonstrating confidence through proactive expansion plans. The increasing importance of value and the growing engagement of younger consumers are key drivers of this trend. Tanganger's focus on offering "on sale every day" pricing and well-stocked, staffed stores positions them favorably for continued success, especially heading into the critical holiday shopping season. The observed increase in traffic, even during challenging periods, underscores the consumer's desire to shop for value.