Malls beef up options to boost shoppers
Fine dining, entertainment part of push by companies to increase their foot traffic
LOS ANGELES— Shoppers braving the mall this holiday season may notice more that’s new than the day’s discounts.
Many mall owners are spending billions to add more upscale restaurants and bars, premium movie theatres with dine-in options, bowling alleys and similar amenities. Some have turned swaths of space that previously housed department stores over to health clubs and grocery stores. Others are undergoing no less than a ground-up transformation to make room for office space, hotels and apartments.
The trend has been gaining traction as the companies that operate malls look for ways to keep people coming in at a time when Macy’s, Sears and other big department store chains have shuttered hundreds of stores and consumers increasingly opt to shop at Amazon.com and other ecommerce sites.
“The mix of uses at our malls is changing,” said Stephen Lebovitz, CEO of mall owner CBL Properties. “It’s becoming less apparel and more dining, more entertainment, more service, more fitness, wellness — the types of categories that are more popular.”
Carving out space for movie thea- tres, video-game arcades and food courts isn’t a new strategy. What’s noteworthy is the degree to which mall owners are now counting on tenants that sell experiences, rather than physical goods. The share of space occupied by nonretail tenants at regional shopping malls reached nearly13 per cent last year, according to commercial real estate tracker CoStar. It was 10.5 per cent in 2012. Since 2014, about 90 large U.S. malls have invested more than $8 billion in major renovations, according to a study by commercial real estate firm JLL.
Some 41 per cent of the malls in the study spruced up their food and beverage offerings with an emphasis on restaurants that serve more varied fare and, in some cases, alcohol.
“It was not that long ago that the food offerings in the traditional food court at shopping centres in the ’80s and ’90s were really more about just giving you something to eat while you shop,” said James Cook, director of retail research at JLL. “Now, the food and beverage is part of the attraction.”
Westfield’s Century City mall in Los Angeles has spent $1 billion to add more than 400,000 square feet of retail space. The renovation included a swanky outdoor dining plaza with gourmet restaurants and cafés. It also added the first Eataly on the West Coast. The Italian food market, which houses a variety of restaurants, drew an average of 3,600 people a day during its opening weekend.
The mall features a15-screen movie theatre, grocery store, fitness clubs and a health clinic. Westfield also installed an events and entertainment space. Pop bands Fitz & the Tantrums and DNCE took the stage at the mall’s reopening gala in October, and The Nutcracker ballet played more recently.