The changing face of the local mall gives a whole new meaning to the term, “anchors away.”
Shifting shopper habits, coupled with store closures, is bringing new and nontraditional anchor tenants — long the domain of department stores — to the nation’s enclosed malls.
Indeed, the emerging star tenants in the mall include high-end supermarkets like Whole Foods and Trader Joe’s, hot fast-fashion chains like H&M, and off-price players like T.J. Maxx.
Developers are rethinking these destination tenants, particularly as longtime mall anchors, such as J.C. Penney and Sears, shutter doors.
“The concept of the anchor has changed,” Jesse Tron, director of communications and media relations for the International Council of Shopping Centers, told Sourcing Journal. “Landlords and developers are thinking outside of the box. The mindset now is having as dynamic and eclectic a tenant mix as possible.”
While mall developers’ changing outlook is in part a bid to woo younger shoppers, it also reflects a changing retail landscape.
For one, consumers can now buy anything and everything online.
And while department store anchor tenants long served as high-profile names to lure consumers to the mall and drive traffic throughout the shopping center, nowadays, he said, “every mall has a website, so you know what stores and restaurants are there,” he said.
Indeed, the emergence of the purposeful consumer who “webrooms” first — researches products online and then makes a predetermined purchase in store — knows the lay of the land before stepping foot into the mall. The change has altered the shopping dynamic, resulting in shorter, more targeted, mall visits.
Meanwhile, consumer-shopping patterns are shifting as time-starved Americans are warming up to multipurpose mall trips, such as grocery and apparel shopping.
Typically food and fashion didn’t go together, but that’s no longer the case, Tron said.
Once ubiquitous anchor tenants Sears and J.C. Penney have recently closed stores or plan to do so. J.C. Penney will close 39 stores this year. Sears recently shuttered about 235 under-performing units.
Sears’ executives told Sourcing Journal that most of those are Kmart locations, and the company won’t breakout the number of Sears closings until it releases its form 10-K in a few weeks.
However, in his December blog, “Moving Forward,” Eddie Lampert, Sears Holdings’ chairman, CEO and majority shareholder, whose leadership has coincided with nearly a decade of sales and profit declines at the chain, conceded that “some of our stores are simply too large for our needs.”
In turn, “we have … adjusted the size of our stores by partnering with retailers like Whole Foods, Dick’s Sporting Goods, Forever 21, Primark [the European fast-fashion chain] and others.”
With retailers like Sears, J.C. Penney — and even Macy’s, which will close 14 doors — trimming their fleet, malls have a retail wish list of replacement tenants to help repurpose that anchor space.
These include retailers such as H&M, and high-end grocers like Whole Foods and Trader Joe’s, according to the U.S. Mall Outlook report released last month by Green Street Advisors, the real estate analysis firm.
The health-and-wellness trend has catapulted the appeal of grocers like Whole Foods and Trader Joe’s as anchor tenants. Not only do they generate high-frequency foot traffic, but they also attract young shoppers with ample disposable income.
Malls are also eyeing off-price fashion chains like T.J. Maxx and Ross Stores, which have outpaced much of the retail industry — even during the economic downturn — to fill anchor spaces, the Green Street report said.
Beyond anchor spaces, expect to see more brick-and-mortar incarnations of up-and-coming online merchants set up shop in malls. Hot eyewear company Warby Parker and menswear merchant Bonobos have already opened mall stores, and the even the biggest e-commerce retailer of all, Amazon, is rumored to be making its mall debut, the report said.
“Several online-only retailers have begun to open physical locations as they are realizing the importance of having a physical presence,” the report said. “These unlikely sources of tenant demand should help offset store count rationalization among mature retailers.”
Barbara Thau has been a business reporter covering the retail industry and consumer news and trends for over 15 years, currently as a contributing writer for Forbes.com via her weekly “Minding the Stores” column and as a contributing editor for trade publication Chain Store Age, Shopping Centers Today and Gourmet Business, an e?zine targeting gourmet retailers.