BY WAYNE CHARGUALAF
Tumon Sands Plaza’s plans to acquire new tenants have been delayed because of the retail environment in the United States mainland, according to Monte D.M. Mesa, general manager for Tumon Sands Plaza. Many businesses have paused their plans for expansion or are downsizing due to the changing nature of the industry.
“Some of them have expanded into Hawaii, but their Hawaii sales performance at the moment is not up to par with what they had planned, so they’re waiting until they solidify their performance in Hawaii before they make their next jump into Guam,” Mesa told the Journal. “So that’s why it’s going to take a lot of time for us to go after our targeted national retailers that we want to come to Tumon Sands.”
According to Mesa, companies in the mainland are reconsolidating and reorganizing their physical retail operations and transitioning to online sales as the traditional bricks and mortar model continues to feel the squeeze from digital commerce. They’re focusing resources on physical stores in locations that have proven strong sales and closing stores in areas with weak performance. With Guam being a distant and — for them — unproven market, they still need some convincing to expand onto the island.
“They look at Guam and immediately they already see the distance as a barrier,” Mesa said. “To them it takes a lot of effort to open just one store on Guam when they could reorganize where they’re at, whether it’s somewhere in California, or maybe Chicago or Miami, where the market is growing and where they can focus their expansion plans. So that’s our challenge today.”
Plans to bring in an entertainment offering have also met hurdles, as construction costs remain high due to the continuing H2 worker shortage. As a result, price quotes for construction have been higher than originally anticipated.
“The entertainment portion has taken a little longer because the people we were working with in Korea are developing in Asia and they’re being offered spaces that are already built,” Mesa said. “In the time we’ve been in discussions with them, they’ve already opened three locations because the space was already available. We have identified space here at Tumon Sands Plaza, but it’s just going to take more time because we have to construct an entire additional building to accommodate them.”
In spite of these challenges, Mesa believes the uniqueness of Guam’s market is a strong selling point for expansion. Several national brands have had success on Guam in shopping centers such as Guam Premier Outlets — which Mesa also manages — and Tumon Sands Plaza. Whereas many shoppers on the mainland choose the convenience of online shopping to avoid the hassle of going to a physical location, in a tourist destination like Guam, visiting a physical store is for many an integral part of the vacation experience.
“We have 1.5 million people coming here every year — that’s new money coming into Guam — that’s the opportunity,” Mesa said. “That’s why certain national stores we have are performing well, because it’s part of their strategy and their merchandising presentation caters to the Japanese and Korean markets. We believe that the stores that we’re targeting to come to Guam will benefit from that as well.”
For this reason, Mesa remains optimistic about acquiring new tenants for Tumon Sands Plaza.
“Things look like they’re coming around,” Mesa said. “That’s why we’re projecting that by maybe 2021 things will get moving and the retailers we’re courting will adjust their strategy and develop out in Guam.” mbj