Where malls are headed
Shopping centres are at the mercy of demographics, retail trends, and sometimes, mother nature, writes Catherine Harris.
It’s fair to say that retailing, and malls in particular, is in a state of flux. Some malls are winning, others are not. The decision to demolish Wainuiomata mall, in the wider Wellington region, is a case in point.
After years of struggling and increasingly empty shops, the quake-damaged mall lost its anchor tenant, prompting its new owner to decide to replace it with a smaller centre.
But elsewhere, there’s big money being splashed on city malls, prompting the ordinary shopper to ask: What gives?
Struggle street
Demographics are ever-changing, and they play a big part in driving our shopping behaviour.
Unsuccessful malls or traditional high streets often boil down to a lack of people working in the area, a lack of high discretionary income or just a lack of pizzazz.
It becomes a vicious cycle. Owners tend not to invest if the area’s not a growing one but the mall languishes without reinvestment.
And when they do get a facelift, malls are often accused of hollowing out their surrounding retail centres. Newer facilities attract larger, fresher retailers, while older shops in potentially seismically challenged buildings can get left in the dust.
In Wellington, for example, two malls that have struggled for years, Wainuiomata and Johnsonville, have suffered from their location in dormitory suburbs, where people work elsewhere and often shop there as well.
They’ve also had strong competition from glitzier retail centres – in this case, Lower Hutt’s Petone and Queensgate.
Contrast that with the Ka¯ piti Coast, which has a large community of retired people who don’t tend to shop elsewhere.
The fate of the two malls is starkly different. Upper Hutt now has a fully tenanted mall after a $12 million spruce-up which is making the surrounding streets seem a bit shabby.
Wainuiomata is to have its mall demolished and replaced with a supermarket and shops.
Demographics have also helped Hamilton’s innercity malls, due to a housing boom and a concerted effort by big employers to return to the city centre.
Julian Koppens, of Silverfin Capital, the owner of Centre Place South, says that previously, customers were drifting away to The Base, a popular mall on the city’s fringe. Now foot traffic is going up. ‘‘It’s only going to get better.’’
Retail New Zealand spokesman Greg Harford says population changes could be a saving grace for malls.
‘‘I think one of the opportunities for malls is, as we get increased density of housing of suburbs, that will support the redevelopment of some of these malls.’’
Retail consultant Chris Wilkinson says areas around malls should be gearing up more around hospitality to avoid being cannibalised.
‘‘Typically, food is the new anchor for town centres. People will always need their coffee and lunch.’’ The rise of online shopping has been blamed for the decline of many malls. But interestingly, this entirely hasn’t played out as people feared, Harford says.
Shoppers have instead continued to go to retail stores to try things out, although they often buy later online. People want both somewhere amazing to go to and the convenience of online, which is why the likes of Amazon are getting into retail outlets.
In the United States, efforts to fill empty malls are everywhere. Gyms are seen as one way of increasing foot traffic; in Miami, the country’s biggest mall is under construction, complete with indoor water park and skating rink.
Gyms are particularly well suited to malls because they offer plentiful parking and big retail areas where department stores once stood.
But it’s also an extension of the idea that struggling malls can be ‘‘assets for the future’’, where people can live, work, play and shop.
‘‘That’s the transition we’re going to see happen over the next decade or two,’’ says Bahram Akradi, chief executive of US fitness chain Life Time. ‘‘Some will make that transition better than others.’’
We still love shopping
Whatever way we choose to shop, it’s too early to call malls passe. Shopping has become a weekend activity in its own right, an alternative to church and somewhere to eat.
‘‘It’s become a family pastime. It’s a way we like to catch up with friends and family, and it’s why retail and hospitality go hand in hand,’’ Harford says.
And there’s the fact that the big players are still splashing the cash on malls. Last year’s $35.6 billion purchase of Westfield by European commercial property firm Unibail-Rodamco indicates the company still sees malls as having a bright future.