Redefining malls with more food

September 16, 2009

The rebirth of a forest devastated by fire is a wondrous sight.

The rebirth of a forest devastated by fire is a wondrous sight. Similarly, shopping malls decimated by this recession may soon be reinventing themselves to survive - and giving rise to ‘downtown-like’ groups of stores that would give consumers the functional diversity they desire rather than today’s environment cohesively themed around apparel.

Define this era by the re-emergence of the once and future downtown area where assorted stores band together for operational efficiency. Instead of Bloomingdale’s and Saks, anchors might be ShopRite and Costco - traffic-building food-based stores surrounded by smaller clothing and home-oriented shops.

Indeed, Gelson’s Market is said to have helped boost mall sales to $855 per square foot at the Westfield Century City mall in Los Angeles in 2008, more than twice the industry average of $370 per square foot, reported the San Diego Union-Tribune.  Bristol Farms helped raise mall sales to $675 per square foot at the Westfield San Francisco Centre last year, and Costco anchors malls in Georgia, Virginia and California, the paper noted. 

Mall operators would be stretching to think that a high proportion of food shoppers would migrate to other stores regularly. But any that do would be gravy.  And in the meantime, there’d be plenty more traffic to the mall. In bad weather, the mall could become a one-stop destination to fulfill many essential needs. Existing storeowners would be happy for the potential that comes without any more direct competition, the malls would collect rent instead of carrying a vacancy, and the food stores would likely be able to lease at favorable rates and relish the parking situation. 

“Malls will become more of community center, destination locations. They are adding restaurants, playhouses….Some are looking at warehouse clubs, fitness clubs….,” Marshall Cohen, chief retail analyst at NPD Group told the Union-Tribune.  

Corroborating the appeal, the typical mall customer is a mother with a couple of kids in tow, who doesn’t want to go from place to place since time is short and gas prices are high, Jonathan Bradhurst, senior vp for U.S. development, also said to the paper.

While food certainly has its place in malls—with food courts, restaurants, drug stores, specialty import, candy, chocolate and card shops abundant—it clearly has the chops to assume a far greater role   Food formats could provide new conveniences to shoppers, an economic lifeline to mall owners and other shopkeepers, and a terrific opportunity for food retailers to acquire desirable locations at reasonable rates today.

Fashion can be fun, but it’s not necessarily paying the bills today. For retailers and mall operators to grow together into the next decade, they need to strategize together about the tenant mix and concepts that will win over shoppers pressed so hard by time and money constraints.