The CBC weighs in on the recent news that the Sears department stores are having a financial challenge and may be looking at how to rebrand and/or restructure. Dianne Buckner notes that the typical mall design incorporated two large anchor stores in a mall, with the concept that shoppers would support the anchors’ stores and then browse and support the smaller shops.
Consumer habits are changing and the CEO of RioCan Real Estate Investment Trust which owns 300 mall type properties in Canada suggests that “secondary” malls are slowly expiring. The “primary” “malls such as Toronto’s Eaton Centre, Calgary’s Chinook Centre or Vancouver’s Pacific Centre will always thrive, thanks to their size and location. But smaller, suburban malls won’t make it unless they reinvent themselves.”
As reported in Price Tags earlier this year, major mall holders including Ivanhoe Cambridge have been investigating building mixed use development around their shopping activities to reinforce their asset and to respond to the strong housing market.The massive, free parking lots that malls provide could be more profitable as mixed-use developments that also include offices and residences, along with regular retail.
As stated in Ms. Buchner’s article “A lot of those projects are right at the application stage and we’re going to see a building boom in mixed-use development at these shopping malls over the next five to 10 years.” Similar to the marketing strategy employed by Starbucks, “experiential retail” built around a profoundly unique environment and experience will be the next level of directed consumer shopping.
Examples such as “The Well” in Toronto include condos, a movie theater, a book store, restaurant and public spaces. “Market places” will provide a more European shopping experience with different retailers and food products all in one area.
Whether this will be enough to recharge retail with the changes in the way people are now purchasing products online remains to be seen. The repurposing of suburban malls as potential housing sites will provide some density to support local market retailing and provide some breathing room for continued commercial retail.