REAL ESTATE

Enter the Daily Needs Mall

BY Brian Landes

You’ve read the news: More and more spending is moving online and retailers that have not been able to adapt are falling by the wayside. E-commerce accounted for 8.9% of all retail spending in early 2017 and has nearly tripled its share of overall retail spending since 2008.

Yet retail market conditions remain positive. National mall occupancy has slowly declined since the recession but hovers at approximately 96 percent, with 2.3 million sq. ft. of net absorption in the first half of 2017. This demonstrates mall owners are finding ways to attract new types of tenants that will continue to bring consumers into their centers.

How? In part, landlords are pivoting to retailers that address customers’ daily needs and spending, drawing foot traffic on a more regular basis.

Grabbing groceries

Grocery stores and regional malls make a great match. Grocers appreciate available spaces in retail centers with plentiful parking. Mall owners value a tenant that households visit on average 1.6 times per week. Both sides benefit when customers can enjoy efficient, one-stop shopping trips.

Mall owners increasingly see grocers as viable options to replace struggling department stores. Furthermore, for centers that still have high occupancy, replacing a struggling department store with a grocer could be a boon to the center. The grocery store can increase foot traffic and may draw a higher-income customer than the department store attracted.

Combined with the growing number of visitors, grocery stores bring in higher sales per square foot. For example, the average sales-per-square-foot at Sears’ stores was $103 in 2016. At Kroger it was $553. Another department store, Macy’s, averaged $150 in sales per square foot, whereas the typical sales per square foot at Whole Foods was $915 in 2016! True, the store footprint for grocers may be smaller, but they bring in consumers more frequently and generate a substantially higher sales volume for the territory.

Fostering fitness

Southdale Center in Edina, Minnesota, was the first modern indoor shopping mall. It was designed as a communal gathering place where people could shop, eat, and socialize. Southdale’s success has ebbed and flowed, but it served as the template for shopping malls in their mid-century spread across the United States and the rest of the world. This seminal retail center continues to demonstrate its adaptability, having recently announced plans for a Life Time Fitness to take over a 120,000-sq.-ft. space vacated by J.C. Penney. The fitness resort will feature a bistro, medical facilities, and rooftop pool.

Life Time Fitness is following in the footsteps of an increasing number of fitness centers and shopping mall owners. Active gym users go to fitness centers an average of 3.6 times per week, compared to the once-per-month that consumers typically visit a shopping mall. For mall owners, adding fitness tenants can significantly increase consumer foot traffic. Also, the average gym user has a median household income of more than $75,000 – 14% higher than the average American household.

For fitness-focused tenants, shopping malls can offer flexibility. Vacant department stores offer large spaces that can accommodate a variety of uses, from gyms with luxury spa facilities to rock-climbing walls. Inline spaces can be adapted to smaller, specialty fitness users. In both cases, shopping malls typically have plentiful surface parking to facilitate quick and easy access for gym users.

There is also an opportunity for fitness centers to create synergies with other mall tenants. For example, apparel retailers and fitness centers could combine marketing efforts to increase the sale of athleisure apparel and drive gym membership.

Considering co-working

Sometimes, mall owners must look beyond retail users to fill vacant spaces in their centers. When that is the case, owners are increasingly marketing a portion of a mall – if not the entire property – as co-working space.

In San Francisco, Westfield opened Bespoke in 2015, converting 37,000 sq. ft. of San Francisco Center into co-working, event, and collaborative space within the larger 1.2 million-sq.-ft. mall. The property’s co-working members spend upward of $400 per month for their space, so the mall owner not only generates direct revenue from memberships but also drives revenue at the mall’s remaining stores and restaurants patronized by the co-working members. Staples stores also are exploring co-working and have a trial program underway that converts excess space in select stores into co-working space.

For shopping centers near office districts and transportation, co-working appears to be a viable method to fill space and adapt to new uses without significant construction costs. Co-working brings together office workers and clients in a retail environment. It is one more method to fill space, increase consumer foot traffic and, hopefully, drive sales at stores and restaurants within the center.


Brian Landes is Director of GIS/Location Intelligence at Transwestern, a full-service commercial real estate firm. Brian can be contacted at [email protected].

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
C-SUITE

Dunkin’ Donuts names marketing chief

BY Marianne Wilson

Dunkin' Donuts has tapped an agency marketing/advertising veteran to head up its U.S. marketing efforts.

The company appointed Tony Weisman, 57, to the position of U.S. chief marketing officer, effective in late September. He most recently served as the North American CEO of DigitasLBi, a global digital agency network, which has worked on the Dunkin' Donuts account for some six years.

Weisman brings nearly three decades of advertising and marketing experience to Dunkin' Donuts. Prior to DigitasLBi, Weisman served as chief marketing officer at Draft Worldwide. He also spent 19 years at Leo Burnett in various management and other related positions leading global consumer accounts, including General Motors, Procter & Gamble, Reebok International and McDonald's Corporation.

"Tony is a highly experienced, much-admired business leader with a proven track record of building global brands," said David Hoffman, president, Dunkin' Donuts U.S. "Very importantly, he also has a deep understanding of working with franchised organizations, including Dunkin' Donuts having led the work on our account at Digitas for the past six years."

As Dunkin' Donuts U.S. CMO, Weisman will lead marketing, product innovation, field marketing, consumer insights, and advertising as well as the brand's digital and consumer packaged goods (CPG) initiatives. He will also will serve on the Dunkin' Brands leadership team.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
C-SUITE

Genesco promotes company veteran as it plans for the future

BY Marianne Wilson

Genesco Inc. announced that Mario Gallione has been named president of the company's Journeys retail division. He most recently served as chief merchandising officer of The Journeys Group.

Gallione will report to James C. Estepa, who will continue to serve as CEO of The Journeys Group. Estepa also remains a senior VP of Genesco. Gallione's appointment is intended as the first step in a succession plan to prepare for Estepa's eventual retirement.

Gallione is a 38-year employee of Genesco and has been associated with Journeys since 1994. In his new role, he assumes responsibility for all aspects of the Journeys and Journeys Kidz retail operations, including stores in the U.S. and Canada as well as journeys.com and journeys.ca.

"Mario Gallione is a seasoned leader, well respected within The Journeys Group, throughout Genesco, and across the footwear retail industry, and I look for Journeys to continue to do great things under his leadership," said Robert J. Dennis, Genesco's chairman, president and CEO.

Genesco Inc. sells footwear, headwear, sports apparel and accessories in more than 2,740 retail stores and leased departments throughout the U.S., Canada, the United Kingdom, the Republic of Ireland and Germany, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Schuh Kids, Little Burgundy, Lids, Locker Room by Lids, Lids Clubhouse, Johnston & Murphy, and on internet websites.

The company's Lids Sports Group division operates the Lids headwear stores, the Locker Room by Lids and other team sports fan shops and single team clubhouse stores. In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the Trask brand, the licensed Dockers brand, G.H. Bass & Co., and other brands

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...