Happy Birthday Dr. Seuss! Mar. 2 is Dr. Seuss’s birthday, and around the nation, people celebrate National Read Across America Day. Recent headlines have announced that Barnes & Noble will be increasing its physical footprint. Indeed, the first half of 2022 indicated that Barnes & Noble’s foot traffic was up over the preceding year, with a particularly high jump in February. Books -A-Million and Half Price Books also saw a large jump over last year during the month of February. The last quarter of 2022 was generally down compared to the same time period in 2021. However, traffic patterns in 2023 are mixed, with an increase for Barnes & Noble and Half Price Books in January, but flat for Barnes & Noble, down for Books-a-Million, and up for Half Price Books in February.
Those familiar with the movie “You’ve Got Mail” will recall the story of the independent bookshop owner fighting against the book superstore magnate, where they meet online during the infancy of the Internet, unaware of their true identities. Fast forward 25 years and the bookstore industry has clearly seen ups and downs with the demise of Borders and many independent bookshops, rise of Amazon, retrenchment of Barnes & Nobles, and then its subsequent re-emergence. In 2008, Barnes & Noble had 726 locations in the United States. It currently has around 600, with plans to open 30 new stores in 2023. This is welcome news for many shopping centers. The four most-heavily visited Barnes & Nobles all happen to be in California, and they have all seen strong YoY, Yo2Y, and Yo3Y performance.
Since its purchase by private equity firm Elliot Management, Barnes & Noble has adopted a more localized approach to its store inventory and merchandising: a bit more like Trader Joe's, one might say. For the branch that opened in May 2021 in Kirkland, WA at The Village at Totem Lake, this is proving to be a winning strategy. Clearly, going from a vacancy to steady foot traffic is always a win for CRE, as we can see from the chart below.
However, what is just as promising is the education level and HHI of the customers frequenting this relatively new location. Looking at 70% of visits, Educated Urbanites and Young Professionals make up two of the highest proportions of segments, followed by Ultra Wealthy Families and Wealthy Suburban Families.
Average HHI is also quite high, with nearly a quarter of patrons living in households with incomes greater than $200K.
Select independent bookstores are seeing a similar trend. YoY foot traffic increased most in the early half of 2022, flattened or dipped in the final quarter, and is increasing again in Jan/Feb 2023.
Powell’s City of Books, the largest used and new bookstore in the world, occupies an entire city block and houses around one million books. It encompasses 68,000 square feet, 10 rooms, three floors and 3,500 sections. The Elliot Bay Book Co is a Seattle favorite and hosts author readings and book clubs. Its multilevel open layout can lead to hours of delightful browsing. One of the nation’s largest independent book stores, The Book Loft of German Village, is located just a few blocks South of the state capitol building. The pre-Civil War era buildings that once were general stores, a saloon and a nickelodeon cinema, now are home to 32 rooms of books. McNally Jackson, with 5 locations in NY, has a cult following, and is a second generation bookstore started by Sarah McNally as an offshoot of the bookstore her parents started in Canada, McNally Robinson.