With discounters positioned as anchors and the influx of food, entertainment and service providers as tenants, U.S. regional malls apparently reinvented themselves to sufficiently weather the recession.
Already feeling pressure from diminishing traffic, population shifts and anchor consolidation, regional malls were said to be in a precarious state entering the downturn. But an article in Stores Magazine indicates optimism on the fate of the channel is improving. Susan Reda, executive editor, wrote, "They are once again attracting shoppers, now with a mix of tenants that includes everything from a tattoo shop to an MBA program, overhauled anchor spaces recast as gourmet food emporiums, over-sized specialty shops and fresh takes on services and entertainment that range from health clubs to high-end movie theaters."
Stacy Janiak, vice chairman and U.S. retail leader for Deloitte, told Stores that developers have become more creative in building tenant mixes.
"Essentially, they've gone back to the genesis of the shopping mall and its origins as a social center that blends shopping and entertainment -- even housing -- in an enclosed community. Mixed-use properties, versus those solely focused on apparel shops, will give consumers a reason to come back again and again," she said.
One particularl problem seemingly solved was replacing dark anchors. Forever 21 and Kohl's replaced some Mervyn's locations on the West Coast. Target has replaced some defunct department stores. Costco also now operates in a handful of regional centers.
"Adding a multi-level restaurant or a Costco is all part of re-socializing the mall to be a destination," said Paula Rosenblum, managing partner of RSR Research and a member of the RetailWire BrainTrust. "Who are the retailers that pull shoppers in? That's who you need to have as an anchor in the mall."
George Whalin, founder of Retail Management Consultants and a RetailWire BrainTrust panelist, agreed. "Consumers don't put retailers in silos the way we tend to do inside this industry. They don't care if there's a Target on one end of the mall and Neiman Marcus on the other because they shop both retail stores -- and they're grateful to not have to drive across town to do it."
But noting the high-failure rate of some themed-restaurants, Bill Taubman, COO of Taubman Centers, was wary of some concepts coming in as anchors.
"I want a big name like Macy's as an anchor whenever it's possible because department stores still have the greatest relevance when it comes to driving traffic," Mr. Taubman said. "Adding schools, mom-and-pop shops and service providers are interesting ways to fill space, but in our experience they don't deliver anywhere near the amount of foot traffic."
Discussion Questions: What do you like and dislike about the changes occurring at regional malls? What do you think is the ideal anchor for a regional mall and which should be only secondary options?